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.

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.

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.

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.

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 here. To 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. 

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.