Regulation on film tax credit

The Rhode Island Division of Taxation today posted, as final, its regulation on the motion picture production tax credit (also known as the film tax credit).

As posted, the regulation:

• adds a requirement that costs be arms-length transactions in order to qualify as costs for purposes of the credit;
• deletes video games from the definition of a motion picture;
• changes the language involving the sunset provision so that it reflects a recent update in the underlying law; and
• changes the regulation’s format so that it complies with the Rhode Island Code of Regulations, a uniform state code.

A public hearing on the proposed regulation was held earlier this year, but because of an inter-agency scheduling matter, the hearing had to be held again. With the hearings now complete, the Division was about to file the regulation as final with the Rhode Island Department of State (Secretary of State).

More postings

The Division of Taxation has filed numerous proposed and final regulations of late, and will continue to do so as part of its months-long effort to streamline and re-codify its regulations.

Most of the regulations as posted contain no substantive changes, but their format has been modified in accordance with the new Rhode Island Code of Regulations.

To view "Rules and Regulations for the Certification of Motion Picture Production Tax Credits," 280-RICR-20-20-5, click here.

Amnesty deadline; new Administrative Decision

Tomorrow is the deadline for filings and payments involving Rhode Island's state tax amnesty program. For details, click here.

The Division of Taxation today posted the latest Administrative Decision. At issue: whether the taxpayer owes tax on her unreported income. Click here to view.

IRS warns taxpayers and tax pros about evolving scam

The Internal Revenue Service today warned taxpayers of a quickly growing scam involving erroneous tax refunds being deposited into their bank accounts. The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.

Following up on a Security Summit alert issued February 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation division continues its investigation into the scope and breadth of this scheme. To learn more, click here.

(The Security Summit includes the Rhode Island Division of Taxation, tax agencies from other states, the IRS, and the tax industry.) 

Guide to local property tax exemptions

The Rhode Island Division of Municipal Finance has posted the latest version of its annual guide to the local property tax exemptions that are available in cities and towns.

“We’ve revised our annual guide to make it easier for Rhode Islanders to learn whether they qualify for any tax-saving benefits from their community,” said Susanne Greschner, chief of the Division of Municipal Finance. “We expect they’ll find this new format easier to read and useful.”

The new guide offers a comprehensive listing of:
• All senior tax exemptions and credits offered by all 39 cities and towns in Rhode Island;
• All tax exemptions and credits offered to qualifying veterans, unmarried widows and widowers, veterans with service-connected disabilities, Gold Star parents, and former POWs.

The guide also lists: 
• Tax exemptions and credits for specially adapted housing;
• All municipal tax-freeze programs;
• All municipal tax-deferral programs;
• All municipal exemptions for the visually impaired;
• A listing of all qualifying service dates and conflicts, and
• Information on the property tax relief program authorized by state law and administered by the Rhode Island Division of Taxation.

To view a copy of the guide, click here.

(Note: The guide was compiled and posted by the Division of Municipal Finance, which is a sister agency of the Division of Taxation. Both are part of the Rhode Island Department of Revenue.)

Reminder for employers

The Rhode Island Division of Taxation reminds employers that it has adopted the federal filing deadline for purposes of employer reporting of personal income tax withheld.

As a result, employers must file the annual Form RI-W3, “Reconciliation of Personal Income Tax Withheld by Employers”, by January 31 for the preceding calendar year. In addition, employers must file the related Form W-2 information with the Division of Taxation by January 31.

As a convenience for employers and others, the Rhode Island deadline is the same as the federal deadline and the deadline in many other states. 

Employers may learn more about this topic by using the following links:

• Form 1099 filing requirements, click here.
• Form W-2 filing requirements, click here.
• Form RI-W3, “Reconciliation of Personal Income Tax Withheld”, click here.

Background

Under former federal law, employers generally sent the required information to federal government agencies on or before February 28 of each year. However, under federal legislation signed into law December 18, 2015, the filing due date was accelerated to January 31. The change in federal statute applies to returns and statements relating to calendar years beginning after the date of enactment. Thus, the federal change applies for 2016 and later years, and its impact was first seen in January 2017. Even before the federal change, a number of states required the filing of withholding information returns by January 31. Since the federal change, a number of other states, including Rhode Island, have moved -- administratively or by statute -- to conform to federal law.

Amnesty deadline a week away

The deadline for Rhode Island’s state tax amnesty program is one week away. Filings and payments are due on or before February 15, 2018.

“That means taxpayers have only one week remaining to take advantage of the amnesty
program’s benefits,” said Rhode Island Tax Administrator Neena S. Savage, who oversees the
Division of Taxation.

“If you pay what you owe in back taxes, we will eliminate all penalties and erase 25 percent of the interest you owe,” she said. “So now is the time to step forward, clean your slate, and get a fresh start,” she added. To learn more, click here.

What's new for 2018 tax year

The latest regular issue of the Division of Taxation’s newsletter is now available. It focuses, in part, on what’s new for the 2018 tax year. Among the topics:

• Corporate estimated taxes: new due dates, formula
• Estate tax threshold
• Amnesty promotional campaign
• Interest rates
• Unemployment insurance (UI)
• Temporary disability insurance (TDI)
• Letters of good standing
• ‘Legal Corner’
• ‘Practitioners’ Corner’

To view a copy, click here.

Newsletter for filing season

The Rhode Island Division of Taxation has posted a special edition of its newsletter, focusing on filing season. Among the topics:

• The new tax break for income from 401(k) plans, private pensions, government pensions, military retirement pay, annuities, and certain other sources.
• The April 17 filing deadline.
• A reduction in the corporate minimum tax.
• A reduction in the annual filing charge for pass-through entities.
• The Form W-2 verification code.
• Wavemaker tax credits.
• An increase in the earned income credit.
• An increase in the property-tax relief credit (Form RI-1040H).
• An increase in thresholds for the Social Security tax break.

To view a copy, click here.

Recent developments

Tax notices from websites

The Rhode Island Division of Taxation today posted FAQs for taxpayers who receive tax notices this season from certain websites or other non-collecting retailers.

The notices are the result of a new law involving use tax. The Division posted the FAQs to help recipients of the notice understand what the notices are about. The notices involves taxpayers’ use tax obligations. To view the FAQs, click here. The Division publicly announced the posting of the FAQs this morning.

IRS spots new scam

The Internal Revenue Service said today that it has identified a new filing season scam -- and urged tax professionals to step up security and beware of phishing emails.

The IRS, which is a partner in the Security Summit with the Rhode Island Division of Taxation, said that the latest scam began with cybercriminals stealing data from several tax practitioners’ computers and filing fraudulent tax returns. In a new twist, the fraudulent returns in a few cases used the taxpayers' real bank accounts for the deposit of refunds. To learn more, click here.

Tax Administrator promotes Free File

Rhode Island Tax Administrator Neena Savage visited Open Doors on Plainfield Street in Providence's Silver Lake section today to talk about the benefits of the Free File program.

By using one of the links at the following Division of Taxation webpage, eligible taxpayers can file their federal and Rhode Island returns at no charge: http://www.tax.ri.gov/misc/efile.php.

Rhode Island Tax Administrator Neena Savage

Amnesty deadline two weeks away

The final deadline for all amnesty filings and payments is Thursday, February 15, 2018. That's two weeks from today. For information on amnesty -- including forms, instructions, FAQs, and where to turn for more help -- see the amnesty website.

www.taxamnesty.ri.gov