Combined reporting and Schedule CRS

The Rhode Island Division of Taxation continues to receive and process returns for tax years 2011 and 2012 that were filed by corporations subject to Rhode Island's pro forma combined reporting requirement under Rhode Island General Laws § 44-11-45. Such returns include a completed Schedule CRS, "Required Data for Combined Reporting Study."

In March 2014, the Division largely finished its study and filed its report on pro forma combined reporting, based in part on the data that corporations filed on Schedule CRS. However, the Division continues to refine its data -- and must also be prepared to provide updated information to the General Assembly upon the General Assembly's request. Such updated information would include data from returns of taxpayers that were not filed in time to be included in the March 2014 study.

Therefore, corporations subject to Rhode Island's pro forma combined reporting requirement that have yet to file their returns for tax years 2011 and/or 2012 should still complete Schedule CRS and file it with their returns. Likewise, fiscal-year corporations subject to Rhode Island's pro forma combined reporting requirement that have yet to file their returns for tax year 2012 should still complete Schedule CRS and file it with their returns.

(The Division has a regulation that contains more information about pro forma combined reporting.)

New Administrative Decisions posted

The Division of Taxation recently posted two Administrative Decisions:

• One is about a claim for a refund of personal income tax.
• The other is about a sales tax assessment on a corporation.

Public hearings next month on regulations

The Division of Taxation will hold a public hearing next month on a revised regulation involving the taxation of tobacco products other than cigarettes (sometimes referred to as “other tobacco products” or “OTP”). A regulation proposed earlier this year has since been revised mainly to clarify record-keeping requirements. The public hearing will be held on Tuesday, June 10, 2014, at 9:30 a.m., at the Powers Building, One Capitol Hill, Providence, diagonally across from the State House.

The Division of Taxation will hold a separate public hearing next month on a proposal to repeal two regulations. The Division proposes to repeal regulation EFT 00-01, “Electronic Funds Transfer,” because a more recent regulation covering the same subject is available: EFT 09-01, “Payment of Taxes by Electronic Funds Transfer.” The Division also proposes to repeal regulation CR 02-12, “ISO Certification Credit,” because the underlying statute, Rhode Island General Laws § 44-11-42, was repealed some while ago. The public hearing is to take place on Wednesday, June 18, 2014, at 9:30 a.m., at the Powers Building, One Capitol Hill, Providence, diagonally across from the State House.

Total refunds up this year; average is $544

The Rhode Island Division of Taxation has issued a combined total of more than $224 million in personal income tax refunds so far this year, up 0.3 percent from the same point a year ago.

For the calendar year to date, the average Rhode Island personal income tax refund is $544, up 2.3 percent compared with the corresponding period a year ago, when the average refund was $532.

	Calendar year 2013	Calendar year 2014	Difference
Number of refunds	421,129	413,187	-1.9%
Total amount refunded	$  223,878,294	$  224,579,147	+0.3%
Average refund	$  532	$  544	+2.3%
Cumulative figures for tax year 2012 returns filed through May 17, 2013, and for tax year 2013 returns filed through May 16, 2014. Figures are before interest and offset, and do not include refunds for tax years other than those stated.

Tobacco products (other than cigarettes)

The Rhode Island Division of Taxation today scheduled a public hearing in June on a proposed regulation involving tobacco products other than cigarettes. The hearing will start at 9:30 a.m. on Tuesday, June 10, 2014, at the Powers Building, One Capitol Hill, Providence R.I. 02908.

The Division of Taxation in February 2014 held a public hearing on a proposed regulation on record-keeping and other requirements involving tobacco products other than cigarettes (sometimes called “other tobacco products,” or “OTP”). Based on comments at that hearing from convenience store owners and others, the agency has withdrawn and rewritten the proposed regulation. The proposed regulation as revised was posted today. The public hearing in June will focus on the proposed regulation as revised.

Fraudulent e-mail scheme

Rhode Island Tax Administrator David M. Sullivan today issued an alert to taxpayers and tax practitioners, urging them to beware of a fraudulent e-mail scheme claiming to involve Rhode Island corporate tax penalties.

Tobacco products (other than cigarettes)

The Division of Taxation in February 2014 held a public hearing on a proposed regulation on recordkeeping and other requirements involving tobacco products other than cigarettes (sometimes called “other tobacco products,” or “OTP”). 


Based on comments at the hearing from convenience store owners and others, the agency has withdrawn and rewritten the proposed regulation, hopes to post it soon, and intends to hold a public hearing on it in June. Details will be announced.

New regulation on commercial farming

The Division of Taxation on May 2, 2014, filed as final a regulation dealing with commercial farm-
related items. Regulation SU 14-151, “Commercial Farming and Related Items,” consolidates material from three other regulations which the Division of Taxation has now repealed: 

• SU 07-36, “Farm Equipment and Farm Structure Construction Materials”; 
• SU 01-44, “Feeds, Fertilizer, Plants and Seeds, Cattle Bedding, Chicken Litter”; and 
• SU 87-57, “Livestock and Poultry”. 

The Division of Taxation has also now repealed Regulation SU 87-11, “Boarding of Animals”, which is outdated.

Personal income tax e-filing sets record

More Rhode Island personal income tax returns were filed electronically this season than at any point since e-filing began. 


When e-file started in 1995, for tax year 1994, a total of 1,810 Rhode Island personal income tax returns were e-filed – a tiny fraction of all returns filed. So far in 2014, for tax year 2013, a total of 474,570 Rhode Island personal income tax returns have been e-filed, representing approximately 87 percent of all returns filed.

“Tax preparers and taxpayers have embraced the many benefits of e-filing,” said Rhode Island Tax Administrator David M. Sullivan. E- filing saves time and money, and results in fewer errors and faster processing, said Peter McVay, associate director of revenue services. 

E-filing has increased in recent years, too.

Type of filing:	TY 2007	TY 2013
E-filed returns	59.87%	87.21%
Paper returns without barcode	26.59%	8.61%
Paper returns with barcode	13.53%	4.18%
Total:	100.00%	100.00%
Tax year 2007 returns filed through April 29, 2008, and tax year 2013 returns filed through April 30, 2014. Some figures rounded.

Letters of good standing

Requests for letters of good standing are now being handled by the Division of Taxation’s Compliance & Collections section. 

Requests filed before April 21, 2014, will continue to be processed by the Division of Taxation’s Office Audit and Discovery section. 

Those filed on or after April 21, 2014, are being processed by Compliance & Collections, which can be reached at (401) 574-8941 from 8:30 a.m. to 4:00 p.m. business days.

E-filing increases for business tax returns

Approximately 22,500 Rhode Island business tax returns have been e-filed so far this year, up from approximately 19,300 at the same point last year, an increase of 17 percent. 


Overall, approximately 86 percent of all business tax returns for tax year 2013 were e-filed, compared with approximately 77 percent of such returns for tax year 2012. (The figures are for business tax returns filed on Form RI-1120C, Form RI-1120S, and Form RI-1065, in the aggregate.)

There are two chief factors for the continuing increase in corporate e-filing. The Division of Taxation mandated the electronic filing of corporate tax returns beginning with the filing season that started January 1, 2013. In addition, more software providers are making corporate e-file available to tax preparers.

	TY 2012	TY 2013	Difference
Total returns filed	25,024	26,049	+4.1%
Total e-filed	19,280	22,477	+16.6%
% e-filed	77%	86%	+12.0%
Aggregation of returns filed on Form RI-1120C, Form RI-1120S, and Form RI-1065, for tax year 2012 filed through April 27, 2013, and for tax year 2013 filed through April 26, 2014. Some figures rounded.

Taxation of alcoholic beverages in R.I.

The Division of Taxation today posted a report on the taxation of alcoholic beverages sold by liquor stores in Rhode Island.