Wednesday, May 10, 2017

Seminar is sold out

The Rhode Island Division of Taxation's seminar next month, on self-audits and sales/use tax, has sold out. Therefore, pre-registration is now closed. The Division thanks everyone who expressed interest in the event.

Tuesday, May 9, 2017

Sales tax due after audit

The Rhode Island Division of Taxation has posted its latest Administrative Decision. 

Decision 2017-07 looks at whether a retailer owes additional sales tax following an audit.

Thursday, May 4, 2017

No inflation-related increase for gas tax this year

Every other year, the Rhode Island Division of Taxation must determine if there has been enough inflation to warrant an increase in the Rhode Island gasoline tax.  

This year, the Division has determined that no inflation-related increase will apply. The Division has posted an Advisory and Notice with details.

Wednesday, May 3, 2017

Two new Administrative Decisions

The Rhode Island Division of Taxation has posted two new Administrative Decisions:

  • Decision 2017-05 involves whether a taxpayer qualifies for the property-tax relief credit.
  • Decision 2017-06 looks at the Rhode Island tax impact of a change at the federal level.

Tuesday, May 2, 2017

Report on sales, taxation of alcoholic beverages

The Rhode Island Division of Taxation yesterday posted its annual report on the sales and taxation of alcoholic beverages. To view a copy, click here.

Wednesday, April 26, 2017

Guidance on duplicate checks

A number of State of Rhode Island checks have recently been printed and distributed in duplicate. Approximately 500 of those were Rhode Island personal income tax refund checks. The Rhode Island Division of Taxation does not print and distribute personal income tax refund checks; those functions are handled by other State agencies. Nevertheless, the Division of Taxation would like to take this opportunity to provide guidance on the matter to tax professionals and other stakeholders who may have questions.

Guidance

A taxpayer may have recently received two State of Rhode Island envelopes in the mail, each containing a paper tax refund check with the same check number and same dollar amount.

It is not possible for a recipient to cash both checks. That is because of an automatic fraud detection system, sometimes referred to as “positive pay”. Due to that fraud detection system, once a check is cashed, it cannot be cashed again, and its duplicate cannot be cashed. Thus, the recent printing and distribution of a number of duplicate State of Rhode Island checks does not expose the State of Rhode Island to financial loss, other than the cost of printing and mailing.

If a taxpayer receives duplicate Rhode Island personal income tax refund checks, the taxpayer should choose one of the checks to cash and should mail the other check to the Division of Taxation, along with a brief note of explanation, to the following address:

Rhode Island Division of Taxation
Personal Income Tax Section
Attention: Duplicate Checks
One Capitol Hill
Providence, R.I. 02908

Anyone with questions may call (401) 574-8829, option # 3. (Note: The duplication involves paper refund checks, not refunds by direct deposit.)


In perspective

So far this year, the Division of Taxation has issued 387,973 personal income tax refunds. The duplicate checks involved 500 personal income tax refunds – in other words, a small fraction of the total. Nevertheless, each taxpayer is important, so it is imperative that the Division provide guidance for anyone who may have received a duplicate check.

Refunds to date

 So far this year, the Division of Taxation has issued $218 million in personal income tax refunds (for all years, including interest and offsets), up 20 percent compared with the corresponding period a year earlier, and nearly 390,000 personal income tax refunds, up 13 percent compared with the corresponding period a year earlier.

Rhode Island personal income tax refunds

2016
Year to date
2017
Year to date
Difference
Total dollar amount of refunds
$  182,181,067.90
$  218,232,701.54
+ 20%
Total number of refunds
343,258
387,973
+ 13%
Average amount per refund
$  530.74
$  562.49
+ 6%
Cumulative, year‐to‐date, personal income tax refunds for all years (including interest and offsets) as of April 25, 2016, and April 24, 2017. Numbers and percentages are rounded.

Monday, April 17, 2017

Two new declaratory rulings

The Rhode Island Division of Taxation has posted two new declaratory rulings. One involves a bundled transaction, the other involves cloud computing.
  • Ruling 2017-01: A taxpayer requested a declaratory ruling to determine whether its product is exempt from Rhode Island sales and use tax – either as a paid monthly or annual subscription, or as a free one-month trial. To view the ruling, click here.
  • Ruling 2017-02: A taxpayer requested a declaratory ruling to determine whether sales of certain cloud computing services and fees are subject to Rhode Island sales tax. To view the ruling, click here.

To see all declaratory rulings, click hereTo learn more about declaratory rulings in general, click here.

Tomorrow's deadline

The Rhode Island Division of Taxation reminds tax professionals and taxpayers about tomorrow's tax-filing deadline. More information is contained in an Advisory posted this morning

Wednesday, April 5, 2017

Filing deadline is April 18

The Rhode Island Division of Taxation yesterday issued a reminder that returns for calendar-year C corporations, individuals, and some others are due on April 18, 2017. To view the Division's latest Advisory, click here.

Thursday, March 30, 2017

Reminder on surplus lines

The Rhode Island Division of Taxation reminds taxpayers about the annual tax return filing requirement for surplus lines brokers/licensees:

A Rhode Island tax return must be filed each year on behalf of surplus lines brokers/licensees. The return must be filed with the Rhode Island Division of Taxation and is normally due on or before April 1. But because April 1 falls on a Saturday this year, the filing and payment deadline will be the following business day: Monday, April 3, 2017.

The return must be filed even if no income is reported (a “zero return”). For the 2016 tax year, the return must be filed on paper, on Form T-71A. The mailing address is included on the form. (For the 2017 tax year, and later tax years, the Division plans an electronic filing option.)

For more information, see the Division of Taxation’s publication, “Surplus Lines Brokers/Licensees: Guide to Tax Filings and Payments,” which includes details and answers to frequently asked questions. To view the guide, click here. For surplus lines forms, click here.

Wednesday, March 15, 2017

For some, filing deadline is tonight

The Rhode Island Division of Taxation's latest Advisory for Tax Professionals, posted today, includes information on the following topics: 
  • Avoid use of staples when filing paper returns.
  • Filing deadline is tonight for some business entities.
  • Filing on extension.
  • Estimated tax payments.
  • Other matters.

Monday, March 13, 2017

Office closed on Tuesday

The Rhode Island Division of Taxation will be closed tomorrow -- Tuesday, March 14, 2017 -- due to the storm. All State offices will be closed. Click here for details.

Monday, March 6, 2017

Free File program highlighted at Warwick event

Rhode Island Tax Administrator Neena S. Savage was among a number of federal, state, and private-sector officials who gathered at the Pilgrim Senior Center in Warwick today to highlight benefits of the Free File program.

The Rhode Island Free File program generally allows qualifying taxpayers to use a participating tax preparation software program to prepare and file their federal and Rhode Island personal income tax returns online at no charge. A special page on the Rhode Island Division of Taxation’s website lists the participating software programs and includes a summary of each. Click here to view it.

Speakers at today's Free File event in Warwick included (above, from left) U.S. Representative Jim Langevin, Bernie McKay of the Intuit Financial Freedom Foundation, Rhode Island Tax Administrator Neena Savage, U.S. Senator Jack Reed, and U.S. Senator Sheldon Whitehouse.

Wednesday, March 1, 2017

Reminder on new filing deadlines

The Rhode Island Division of Taxation today issued a reminder to tax professionals, businesses, and others that filing deadlines have changed for a number of different entities. For example, calendar-year partnerships, which formerly filed in April, now have a deadline of March 15 -- which is two weeks from today.

The Division's latest Advisory for Tax Professionals also includes information on the following topics:

  • Businesses filing on extension.
  • Estimated tax payments for businesses.
  • Personal income tax refund statistics.
  • Economic impact analysis reports online.



Friday, February 24, 2017

Two new Administrative Decisions

The Rhode Island Division of Taxation today posted two new Administrative Decisions:

  • Decision 2017-03 considers the Rhode Island tax impact when one's federal income tax picture for a prior year is changed. 
  • Decision 2017-04 involves whether the taxpayer was a bona fide nonresident for purposes of use tax due on a motor vehicle purchase.

Wednesday, February 22, 2017

Advisory for Tax Professionals

The Rhode Island Division of Taxation has posted an Advisory for Tax Professionals which includes information on the following topics:

  • Improvements to the “Where’s My Refund?” online tool.
  • Fighting refund fraud.
  • How to contact the Division of Taxation.
  • What’s new for filing season.
  • A list of recent Division of Taxation publications.
  • A list of recent Division of Taxation outreach efforts.
  • Answers to some questions involving filing season.
For more information, click here.


Friday, February 17, 2017

Practitioner Alert: Scam impersonates tax preparation software provider

The Rhode Island Division of Taxation, the Internal Revenue Service, and other Security Summit partners today warned tax preparers of an email scam that impersonates their tax preparation software provider. For more information, click here.

Tuesday, February 14, 2017

Updated forms and instructions

The Rhode Island Division of Taxation has updated its forms and instructions to reflect the recent change in the extended due date for calendar-year C corporations.
 
The Division has updated Form RI-7004, which is for making an automatic extension request involving Form RI-1120C, RI-1120S, and RI-1065. To view it, click here.
 
The Division has also updated Form BUS-EXT, the automatic extension request for those filing Form RI-1120POL (political organizations tax), Form T-72 (public service corporation gross earnings tax), and Form T-74 (banking institution excise tax). To view it, click here.
 
The Internal Revenue Service recently announced that it would make a six-month automatic extension available to calendar-year C corporations. (To see the IRS announcement, click here.) In response, the Rhode Island Division of Taxation announced that it would follow suit. (To see the Division's announcement, click here.)
  • Thus, for example, a calendar-year C corporation preparing its Rhode Island return for tax year 2016, with an original due date of April 18, 2017, will have an extended due date of October 16, 2017.
The Division decided to establish the six-month extension so that entities will have the same deadline for filing their federal and Rhode Island returns, a convenience for businesses and for tax professionals. The updated forms and instructions are available for tax preparers, tax software providers, taxpayers, and other stakeholders.

Thursday, February 9, 2017

Closed due to storm

The Rhode Island Division of Taxation is closed today -- Thursday, February 9 -- due to the storm.

Extended due date for some C corps

The Rhode Island Division of Taxation has announced that calendar-year C corporations are eligible for an automatic six-month extension for tax years beginning on or after January 1, 2016. 

Thus, for example, a calendar-year C corporation preparing its Rhode Island return for tax year 2016, with an original due date of April 18, 2017, will have an extended due date of October 16, 2017. 

The Division decided to establish the six-month extension so that entities filing their federal and Rhode Island returns will have the same deadline – a convenience for businesses and for tax professionals. For details, click here.

Tuesday, February 7, 2017

Ruling posted involving nonprofit

The Rhode Island Division of Taxation has posted on its website a declaratory ruling involving a nonprofit organization.

The nonprofit filed a request for a ruling regarding the application of the sales tax to the nonprofit's purchases as the nonprofit awaits a decision from the Internal Revenue Service on the nonprofit's application for tax-exempt status.

To view Ruling Request No. 2016-02, click here.

Friday, February 3, 2017

Alert for employers: phishing scam

The Rhode Island Division of Taxation, the Internal Revenue Service, and other Security Summit partners are issuing the following alert to employers:

The Form W-2 email phishing scam has evolved beyond the corporate world and is spreading to other sectors, including school districts, tribal organizations, and nonprofits. To learn more, click here.

Wednesday, February 1, 2017

Recent postings of tax information

The Rhode Island Division of Taxation has posted a number of items in recent weeks, including the following:

  • An Administrative Decision involving the nursing facility provider assessment;
  • An Administrative Decision involving the personal income tax and refund offsets;
  • A special edition of its newsletter, focusing mainly on what's new for filing season;
  • An update with information about an email scam, the mailing of  forms for estimated tax, and surplus lines insurance; and
  • The regular edition of its newsletter, focusing mainly on what's new for the 2017 tax year.

Monday, January 23, 2017

Filing season update for tax pros

The Rhode Island Division of Taxation this morning posted an Advisory for Tax Professionals about the start of filing season. Among the highlights: 
  • The Division has officially begun accepting and processing personal income tax returns.
  • The Division officially begins accepting and processing e-filed business returns at 5:00 p.m. Eastern Time today.
  • Fighting tax refund fraud.
  • How to contact the Division of Taxation.
  • How to obtain forms and instructions.
  • How to find a tax preparer.
  • Free local tax assistance.
  • “Free File” programs online.
  • List of approved software programs for preparers, updated this morning.
  • Information on Forms 1099-G, 1099-INT.
To view a copy, click here.


Friday, January 20, 2017

Practitioner Alert: List of approved vendors

The Rhode Island Division of Taxation today posted a list of the tax-preparation software programs that the agency has cleared for use in preparing and e-filing tax year 2016 Rhode Island returns.

The list includes all of the programs approved to date and is posted as a convenience for tax preparers, software providers, and others. To view, click here.

Thursday, January 12, 2017

New scam targets tax preparers

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners of the Security Summit urge tax professionals to be alert to an email scam from cybercriminals posing as clients soliciting their services.

A new variation of this phishing scheme is targeting accounting and tax preparation firms nationwide. The scheme's objective is to collect sensitive information that will allow fraudsters to prepare fraudulent tax returns.

These latest phishing emails come in typically two stages. The first email is the solicitation, which asks tax professionals questions such as, "I need a preparer to file my taxes." If the tax professional responds, the cybercriminal sends a second email. This second email typically has either an embedded web address or a PDF attachment that has an embedded web address.

In some cases, the phishing emails may appear to come from a legitimate sender or organization (perhaps even a friend or colleague) because they also have been victimized. Fraudsters have taken over their accounts to send phishing emails. 

The tax professional may think they are downloading a potential client's tax information or accessing a site with the potential client's tax information. In reality, the cybercriminals are collecting the preparer's email address and password and possibly other information.

The Security Summit urges tax professionals and tax preparation firms to consider creating internal policies or obtain security experts' recommendations on how to address unsolicited emails seeking their services. 
  • Tip: Never respond to, or click on, a link in an unsolicited email or PDF attachment from an unknown sender. As the IRS, the states, and the tax industry make progress in the fight against identity theft, cybercriminals are becoming more sophisticated in their efforts to steal additional client information. Criminals need more data in their effort to impersonate clients and file fraudulent returns to claim refunds -- and schemes like this can help in this effort. To learn more, click here.

RIAPA tax seminar

More than 50 tax preparers attended today's Rhode Island Association of Public Accountants meeting in Warwick.

At the seminar, the Division of Taxation reviewed what's new for filing season and what's new for the 2017 tax year. The kickoff speaker was Leo Lebeuf, chief revenue agent in the Division's Personal Income Tax section. Among other presenters was Phil D'Ambra, chief of the Division of Taxation's Employer Tax section.
Phil D'Ambra, chief of the Division of Taxation's Employer Tax section

Tuesday, January 10, 2017

Filing season starts January 23

The Rhode Island Division of Taxation has announced that the filing season will start on Monday, January 23, 2017. On that day, the Division will officially begin processing electronically filed personal income tax returns as well as paper returns covering the 2016 tax year. For more details, click here.

New Tax Administrator appointed

Robert S. Hull, Director of the Rhode Island Department of Revenue, has announced the appointment of Neena S. Savage to serve as Rhode Island Tax Administrator, overseeing the Rhode Island Division of Taxation.

An attorney with over 25 years of legal experience in the non-profit, public, and private sectors, she joined the Division of Taxation in February 2015 as Associate Director of Revenue Services and Assistant Tax Administrator. She became Acting Tax Administrator in December 2015, succeeding David M. Sullivan, who stepped down to take a job in the private sector.

She holds a Bachelor of Science degree from Texas A&M University and a Juris Doctorate from the Washington College of Law of the American University. For more details, click here.

Tax Administrator Neena S. Savage



Monday, January 9, 2017

Reduction in UI tax rates

Rhode Island Governor Gina M. Raimondo has announced that employers will see a significant reduction in their state unemployment insurance (UI) tax rate for the first time in 25 years. Collectively, Rhode Island employers will save about $30 million in 2017. For more details, click here.