Thursday, December 27, 2018

Recent developments

The Rhode Island Division of Taxation has posted the following:

  • An Advisory about tax changes that take effect January 1, 2019. Click here to view.
  • An Advisory about an inflation adjustment involving the gas tax, to take effect July 1, 2019. Click here to view.
  • The new booklet of income tax withholding tables (used by employers and others to calculate how much to withhold from an employee’s pay for Rhode Island personal income tax purposes). Click here to view.
  • The new version of Form RI W-4, “Employee’s Withholding Allowance Certificate” (which an employee may use to adjust the amount of Rhode Island personal income tax withheld from the employee's paycheck). Click here to view.

Tuesday, December 18, 2018

Division provides gifts for foster children in DCYF care

The Rhode Island Division of Taxation recently raised funds to help clients of the Rhode Island Department of Children, Youth & Families (DCYF). Specifically, employees of the Division of Taxation's Audit & Investigation section used their personal funds to purchase $635 in gift cards to different retailers.

Patrick Gengarella (below, left), chief of the Division's Audit & Investigation section, presented the gift cards in a festive holiday bag on December 18, 2018, to Jane Ahles of the DCYF's Family Services Unit, which plans to give the cards to foster children who are in DCYF's care.

Patrick Gengarella and Jane Ahles

Monday, December 17, 2018

Email scam targets tax professionals


The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit warned today of an uptick in email scams that target tax professionals. For more information, click here.

Wednesday, December 12, 2018

Monday deadline for corporate estimated tax

The Rhode Island Division of Taxation reminds tax professionals and taxpayers that the fourth payment of estimated tax for calendar-year C corporations is due on or before Monday, December 17, 2018. For more information, click here.

Thursday, December 6, 2018

W-2 and ID scams target small business

The Internal Revenue Service, the Rhode Island Division of Taxation, and other members of the Security Summit urge small businesses to be on guard against a growing wave of identity theft and W-2 scams. For details, see today's announcement, issued as part of National Tax Security Awareness Week.


Tuesday, December 4, 2018

Use strong passwords online, Security Summit says

The Internal Revenue Service, the Rhode Island Division of Taxation, and other partners in the Security Summit urged taxpayers and tax professionals today to create and use strong passwords when online. This is especially important for those who use online accounts involving financial data and/or tax data, the Security Summit said. To learn more, click here.
Also today, the Security Summit warned about a new wave of phishing attacks. The term "phishing" refers to how criminals, posing as trustworthy people or organizations, use emails or websites to solicit your personal, tax, or financial information. To learn more, click here.

Monday, December 3, 2018

Ruling issued on solar power project

The Rhode Island Division of Taxation today posted its latest Declaratory Ruling.

In Ruling Request No. 2018-01, the owner of a solar power project asks whether a number of items purchased/used for a solar photovoltaic system will be exempt from Rhode Island sales and use tax. To view the ruling, click here.

Beware of ID thieves this shopping season

The Internal Revenue Service, the Rhode Island Division of Taxation, and other partners in the Security Summit today urged taxpayers to take extra steps during this holiday shopping season to protect their tax and financial data from identity thieves. (Click here for the announcement.)

The appeal came as the Security Summit kicked off National Tax Security Awareness Week. In Rhode Island, Tax Administrator Neena Savage and Attorney General Peter Kilmartin helped launch the start of National Tax Security Awareness Week by taking part in a news conference in Cranston co-hosted by the IRS and the Rhode Island Society of Certified Public Accountants. (See below)

Rhode Island Tax Administrator Neena Savage


Rhode Island Attorney General Peter Kilmartin




Thursday, November 29, 2018

Method of depreciation

The Rhode Island Division of Taxation today posted its latest Administrative Decision. At issue is the proper method of determining accumulated depreciation under the personal property tax imposed on telecommunications companies. Click here to view a copy.

Wednesday, November 21, 2018

Inflation adjustments posted

The Rhode Island Division of Taxation today posted the following:

  • Inflation-adjusted numbers for the personal income tax for tax years beginning on or after January 1, 2019.
  • Inflation-adjusted numbers involving the income tax for estates and trusts for tax years beginning on or after January 1, 2019.
  • Inflation-adjusted numbers for personal income tax modifications for the 2018 tax year involving taxable income from Social Security, government pensions, private-sector pensions, 401(k) plans, annuities, and certain other sources.

To view the latest Advisory, click here.

Monday, November 19, 2018

Estate tax update


The Rhode Island Division of Taxation has announced the Rhode Island estate tax credit amount and threshold for the estates of decedents dying on or after January 1, 2019. To view the Advisory involving this estate tax update, click here.

Friday, November 16, 2018

E-file shutdown tomorrow

The Rhode Island Division of Taxation reminds taxpayers and tax preparers that the Division's annual electronic filing shutdown and switchover will occur tomorrow, Saturday.

Individuals and businesses seeking to e-file their Rhode Island returns for tax year 2017 must do
so on or before Saturday, November 17, 2018. After that date, returns for tax year 2017 must be
filed on paper.

Each year, the Division temporarily closes its system to e-filing in order to prepare the system for
the coming filing season. The Internal Revenue Service, and many other states, follow the
same practice. This year, the Rhode Island modernized e-file (MeF) shutdown and cutover will
occur on Saturday, November 17, 2018, the same date as the IRS’s.

Transmissions of e-filed personal and  business returns must be completed by 10:00 p.m. (Eastern time) tomorrow, Saturday. The shutdown begins at 11:59 p.m. (Eastern time) tomorrow, Saturday. For more information, click here.

  • From the Rhode Island Division of Taxation's standpoint, tomorrow's shutdown is for incoming e-filed 2017 returns. However, even after the point of shutdown, the Division will continue to issue electronic receipts -- also known as acknowledgements, or "acks" -- for all returns that have been properly prepared and e-filed by tomorrow's 10:00 p.m. (Eastern time) transmission deadline. Because the shutdown occurs on the weekend, some acknowledgements may not be issued until next week.

Tuesday, October 30, 2018

Interest rates for 2019


The Division of Taxation has posted the interest rates that will apply to overpayments and underpayments for 2019. For details, click here.

Tuesday, October 23, 2018

Recent developments

Annual e-file shutdown


Each year, the Rhode Island Division of Taxation temporarily closes its system to electronic filing in order to prepare the system for the coming filing season.

This year’s e-file shutdown and switchover will occur on November 17, 2018. Individuals and businesses seeking to e-file their Rhode Island returns for tax year 2017 must do so on or before Saturday, November 17, 2018. For more information, click here.

"Seminar for Tax Preparers"


The Division's "Seminar for Tax Preparers" -- in Newport in November and in Warwick in December -- have now sold out. Therefore, registration is now closed. Thank you for your interest in the seminar.


Monday, October 15, 2018

Decision involving nexus

The Division of Taxation’s most recent Administrative Decision involves whether a retailer had substantial nexus with Rhode Island for sales and use tax purposes. (Note: The Decision is based on and limited to the specific facts in the case prior to the enactment in August 2017 of Rhode Island's law on non-collecting retailers, and before the U.S. Supreme Court's decision in June 2018 on Wayfair.)

Friday, October 12, 2018

Monday's deadline

The Rhode Island Division of Taxation has posted a reminder that Monday is the deadline for filing personal income tax returns that are on extension for tax year 2017. 

October 15, 2018, is also the deadline for a number of business entities. 

The Advisory includes tips for last-minute filers, a summary of payment options, and information about Section 965 and penalty relief in certain circumstances for calendar-year C corporations. To view the Advisory, click here.

Thursday, September 27, 2018

New tax law takes effect on Monday

The Rhode Island Division of Taxation reminds businesses, software providers, and others that a new tax law will take effect on Monday, October 1, 2018.

That is when vendor-hosted prewritten computer software, sometimes referred to as “software as a service”, or SaaS, will become subject to Rhode Island’s 7 percent sales and use tax.

Vendors must register with the Rhode Island Division of Taxation, obtain a sales tax permit, and collect and remit the 7 percent tax. If sales/use tax is not collected on the transaction, the buyer -- 
whether a business or consumer -- must pay the 7 percent use tax. For more information, including details about registering and collecting the tax, and paying the tax, click here.

Tuesday, September 25, 2018

New Administrative Decision

The Rhode Island Division of Taxation has posted its latest Administrative Decision. This one looks at whether the Division should have denied a married couple's claim for personal income tax refunds. To learn more, click here.

Regulatory actions

Rather than publish two separate sets of the same regulations, the Rhode Island Division of Taxation and the Rhode Island Commerce Corporation have agreed to post just one set when it comes to certain tax credits and related incentives.

Thus, for the first three tax credit programs listed below, the Commerce Corporation is posting the substantive regulation; the Division of Taxation is, in effect, posting a one-page notice (in the form of a regulation) that simply refers to the Commerce Corporation regulation.

The regulations are being jointly promulgated by the Commerce Corporation and the Division of Taxation. The Division will hold a public hearing on the regulatory actions listed below at 1:30 p.m. on October 3, 2018, at the Division of Taxation, One Capitol Hill, Providence.

Wavemaker credit

The Division proposes to delete its regulation involving tax credits under the “Wavemaker Fellowship” program and use the Commerce Corporation’s regulation instead. Meanwhile, the Commerce Corporation is proposing to amend its regulation to include technical corrections that are intended to clarify the process to be followed by both the Commerce Corporation and the Division of Taxation as it relates to the issuance and use of the Wavemaker credits.

To view the Division’s notice of proposed rulemaking, click here.
To view the regulation that the Division of Taxation proposes to delete, along with the one-page referral notice (in the form of a regulation), click here.
To view the Commerce Corporation’s proposed regulation, click here.

Qualified Jobs Incentive Act

The Division proposes to delete its regulation involving tax credits under the “Qualified Jobs Incentive Act” program and use the Commerce Corporation’s regulation instead. Meanwhile, the Commerce Corporation’s regulation includes information on how the Division may provide for a process for the redemption of tax credits.

To view the Division’s notice of proposed rulemaking, click here.
To view the regulation that the Division of Taxation proposes to delete, along with the one-page referral notice (in the form of a regulation), click here.
To view the Commerce Corporation’s proposed regulation, click here.

Rebuild Rhode Island credit

The Division proposes to delete its regulation involving tax credits under the “Rebuild Rhode Island” tax credit program and use the Commerce Corporation’s regulation instead. Meanwhile, the Commerce Corporation’s proposed regulation includes information on when tax credit certificates can be issued.

To view the Division’s notice of proposed rulemaking, click here.
To view the regulation that the Division of Taxation proposes to delete, along with the one-page referral notice (in the form of a regulation), click here.
To view the Commerce Corporation's proposed regulation, click here.

Anchor Institution credit

By statute, the “Anchor Institution” tax credit program will no longer be available to applicants as of January 1, 2019. Therefore, the Division proposes to repeal its “Anchor Institution” regulation effective January 1, 2019.

To view the Division’s notice of proposed rulemaking, click here.
To view the regulation that the Division of Taxation proposes to delete, click here.

 This post includes only a summary of regulatory actions. Please read each regulation for details.

Tuesday, September 18, 2018

Prompt reporting of data theft aids clients

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit remind tax professionals that they should report data theft immediately and follow an established process to help ensure that their clients are protected. To learn more, click here.

Thursday, September 13, 2018

Estimated payments due Monday


The Rhode Island Division of Taxation reminds tax professionals and taxpayers that Monday is the deadline for certain payments of estimated tax. 
  • The deadline normally would be September 15, but that falls on a Saturday this year, so the deadline shifts to the next business day. Thus, this year’s deadline is Monday, September 17, 2018. Click here to learn more


Tuesday, September 4, 2018

Recent developments

The Rhode Island Division of Taxation today posted two Advisories for tax professionals.

  • ADV 2018-37 urges tax practitioners to be on guard against theft of taxpayer data from their offices 
  • ADV 2018-38 reminds tax professionals about a change in tax law: Starting October 1, 2018, the sale, storage, use, or other consumption of vendor-hosted prewritten software, sometimes called “software as a service” or SaaS, will be subject to Rhode Island sales and use tax.

Wednesday, August 29, 2018

Security Summit; FAQs on short-term rentals

FTC's Safeguards Rule

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to be aware of their obligations -- including the Federal Trade Commission's Safeguards Rule -- to protect client data. To view, click here.


FAQs on short-term rentals

The Division of Taxation has updated its publication involving short-term residential rentals. "Sales and hotel taxes on short-term residential rentals: FAQs" was revised mainly to provide updated links to certain documents. To view, click here.

Monday, August 27, 2018

Tax credit and incentive report

The Division of Taxation has posted on its website its latest annual tax credit and incentive report, as required by Rhode Island statute.

The latest report identifies 14 businesses that received a combined total of approximately $14 million in certain state tax credits and incentives for the fiscal year ended June 30, 2018. 

  • Three of those recipients also received a combined total of approximately $4 million in other Rhode Island tax credits and incentives, the report shows. To view the report, click here.

Friday, August 24, 2018

Section 965 and combined reporting

If filing a combined return, and more than one entity in the combined group has deferred foreign income (“Section 965 income”) for Rhode Island tax purposes for the 2017 tax year, should a Rhode Island Schedule 965 (“965 Transition Tax Statement”) be included in the filing for each entity, or should the filing include a single Rhode Island Schedule 965 that includes the combined Section 965-related amounts for all the entities?

The answer is that the filing must include a single Rhode Island Schedule 965, showing the combined Section 965-related amounts for all the entities. Although the Rhode Island Schedule 965 will include only the combined amounts for all the entities, you must nevertheless create a spreadsheet or other such document listing the underlying detail for each of the entities. That spreadsheet or other such document must be kept on file and made readily available should the Division require the information at a later date.

Wednesday, August 22, 2018

Education for tax office employees

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to step up security education for all office employees to better protect taxpayer data and help prevent fraudulent return filings.

  • There's been a 30 percent increase this year in reports of data thefts from tax professionals. The Security Summit partners remind tax professionals that their clients’ data and their businesses are only as secure as their least-informed employee. To learn more, click here.

Tuesday, August 21, 2018

Recent developments

Administrative Decision

The Rhode Island Division of Taxation has posted its latest Administrative Decision. This one looks at whether a sales/use tax refund should be issued when a newly purchased car is returned. To learn more, click here.

EFINs, PTINs, and CAFs

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit remind tax professionals to maintain, monitor, and protect their Electronic Filing Identification Numbers (EFINs), and keep tabs on their Preparer Tax Identification Numbers (PTINs) and Centralized Authorization File (CAF) numbers.

Savvy cybercriminals are targeting these IRS-issued identification numbers as part of an effort to impersonate tax professionals. Thieves use stolen data from tax practitioners to create fraudulent returns that can be harder to detect and harder to distinguish from legitimate taxpayer returns. To learn more, click here.

Wednesday, August 8, 2018

Tax professionals offer tips on data safety


The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit are sharing lessons learned by victims in the tax community to help others avoid being targeted by identity thieves. To learn more, click here.

Friday, August 3, 2018

Section 965

The Rhode Island Division of Taxation has filed, as final, a regulation that provides guidance to C corporations and their advisors on how to report Section 965 income for Rhode Island tax purposes.

In addition, the Division has posted Rhode Island Schedule 965 (“965 Transition Tax Statement”) and a related Advisory.

  • To view the Advisory, click here
  • To view the Regulation, click here.
  • To view Rhode Island Schedule 965, click here.

Section 965 information for software vendors

The Division of Taxation has updated its schema to allow for the e-filing of Rhode Island Schedule 965.

Section 965 information for tax preparers

It is up to each software vendor to determine whether to reconfigure tax year 2017 software to allow for the e-filing of Rhode Island Schedule 965.

If Rhode Island Schedule 965 is not available as part of your tax preparation software, you may download the schedule from the Division’s website and attach a completed copy as a PDF when e-filing your client’s return (assuming that your software allows for PDF attachments).

If you have Section 965 income, make sure that the amount on Line 5 of the Rhode Island Schedule 965 carries over to line 1 of Form RI-1120C (“Business Corporation Tax Return”). Please also see the filing instructions on the schedule.

Recent developments

Administrative Decision

The Rhode Island Division of Taxation has posted its latest Administrative Decision. This one deals with whether a taxpayer's personal income tax refund for 2014 should have been denied. To view the document, click here.

Security Summit

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to beware of spear-phishing email. Use of such email is the most common method that data thieves use to enter a practitioner’s digital networks and steal client information. To learn more, click here.



Monday, July 30, 2018

Recent developments


Strengthen passwords

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge all tax professionals to use strong passwords to protect accounts from cyberthieves. Tax professionals also should consider encryption for all sensitive data. To learn more, click here.

Statistics of Income

The Rhode Island Division of Taxation has posted on its website two Statistics of Income (SOI) reports. Both cover the personal income tax for the 2015 tax year. One focuses on residents, the other on nonresidents. The reports draw on figures contained in tax returns filed with the Division of Taxation. The reports do not disclose confidential taxpayer information. Rather, they provide aggregate data for a given tax type. To learn more, click here.

Friday, July 20, 2018

Newsletter posted

The Rhode Island Division of Taxation has posted the latest issue of its newsletter. Among the topics:

  • Annual tax bills
  • Section 179
  • Bonus depreciation
  • ‘Legal Corner’
  • ‘Practitioners’ Corner’
  • Regulations

To view a copy, click here.

Tuesday, July 17, 2018

Security tips for tax professionals

The Internal Revenue Service, the Rhode Island Division of Taxation, and other partners in the Security Summit today outlined critical steps for tax professionals to take to protect their computers and email as well as safeguard sensitive taxpayer data. To learn more, click here.

Friday, July 13, 2018

Administrative Decision on NOLs

The Division of Taxation today posted its latest Administrative Decision. At issue is whether the taxpayers should be allowed to claim a net operating loss for the 2016 tax year. To view the document, click here.

"Summary of Legislative Changes"

The Rhode Island Division of Taxation’s “Summary of Legislative Changes” offers a brief look at key tax provisions in the recently enacted budget bill for the 2019 fiscal year. Among the topics:

  • Preservation of deductions for personal exemptions
  • Taxpayer identification numbers (TINs)
  • Tax treatment of sports wagering
  • Sales tax and armored-car services
  • Vendor-hosted prewritten computer software
  • Changes to film tax credit

To view the document, click here.



Tuesday, July 10, 2018

Recent developments

Security awareness

The Security Summit today launched a summertime security awareness campaign for tax professionals. To learn more, click here.

FAQs for remote sellers

The Division of Taxation recently posted FAQs for non-collecting retailers, including remote sellers. To learn more, click here.

Friday, June 29, 2018

Sales tax permits, coupon booklets


The Rhode Island Division of Taxation has begun mailing sales permits. For details, including information on some changes, click here.

Tax changes take effect on Sunday

The Rhode Island Division of Taxation today issued a reminder for tax professionals, tax software providers, businesses, and others about tax changes that will take effect on Sunday, July 1, 2018. For details, click here.

Thursday, June 28, 2018

Administrative Decision on refunds

The Rhode Island Division of Taxation has posted its latest Administrative Decision, which focuses on whether a military service member's claimed refunds were filed in time. To view Decision 2018-06, click here.

Wednesday, June 27, 2018

Remote sellers; Wayfair


The Rhode Island Division of Taxation has posted the following: 
  • An Advisory that provides registration information for remote sellers in light of last week’s U.S. Supreme Court decision in Wayfair. To view, click here.
  • A statement from the Tax Administrator in response to the Wayfair decision. To view, click here.

Monday, June 25, 2018

Recent developments

Administrative Decision


The Rhode Island Division of Taxation today posted its latest Administrative Decision. Decision 2018-05 looks at whether a claim for a personal income tax refund was filed on time. To view the Decision, click here.

Notice on sales/use tax


The Rhode Island Division of Taxation today posted a Notice intended for all providers of investigation, guard, and/or armored car services. The Notice provides details on the extension of the sales/use tax to those services effective July 1, 2018. To view the Notice, click here.

Monday, June 11, 2018

Section 965


The Rhode Island Division of Taxation today proposed a regulation that would provide guidance to C corporations and their advisors on how to report deferred foreign income (“Section 965 income”) for Rhode Island tax purposes for the 2017 tax year. To learn more, click here.

Friday, June 8, 2018

Taxpayers warned anew about scam


The Rhode Island Division of Taxation and the Internal Revenue Service have renewed their call for individuals and businesses to beware of telephone scams involving taxes. To view the Division’s latest Advisory on the topic, click here.

Monday, June 4, 2018

Recent developments


Administrative Decision

The Division of Taxation has posted its latest Administrative Decision. Decision 2018-04 focuses on whether a taxpayer owes use tax on the purchase of a car. To view a copy, click here.

Regulations finalized

The Division of Taxation recently posted, as final, two regulations. One focuses on mandatory unitary combined reporting, the other on forms reproduction. For each of the two regulations, the format has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code). 
In addition, certain changes have been made to the regulations:
  • The regulation on forms reproduction has been amended to include language regarding barcodes.
  • The regulation on mandatory unitary combined reporting has been amended to delete the original regulation’s preamble.


For more information about the codification process, and to view regulations, see the Rhode Island Department of State (Secretary of State) website. Click here.

W-2 information reporting

The Division of Taxation recently amended its “W-2 Informational Returns” regulation – Regulation 280-RICR-20-55-9. (Click here to view.) It focuses on filing of W-2 information by employers.

The regulation’s format has been modified in accordance with the new Rhode Island Code of Regulations.

Also, the Division reminds employers – and their representatives or agents, such as payroll companies – that what is meant by “electronic filing” for purposes of W-2 information filing is contained in the Division’s “W2 Electronic Filing Requirements” document, available by click here.

Monday, May 21, 2018

Regulation; e-file

Hearing on regulation


The Rhode Island Division of Taxation will hold a public hearing on May 31, 2018, about amending a regulation involving the estate tax. No major changes are proposed. The hearing will start at 9:30 a.m. at the Department of Administration building, One Capitol Hill, Providence.

The Division proposes to modify the regulation in accordance with the new Rhode Island Code of Regulations (a uniform state code). In addition, the Division proposes to eliminate exhibits in the existing regulation and replace them with references to the applicable tax returns.

For more information about the codification process, and about each proposed regulation (including further details about the hearing), see the Rhode Island Department of State (Secretary of State) website. Click here.


Electronic filing


The Internal Revenue Service has announced its annual modernized e-file (MeF) systems shutdown for Memorial Day weekend. The shutdown starts Saturday, May 26, 2018, at 6:00 p.m. and ends on Tuesday, May 29, 2018,  at 6:00 a.m. 

That means the IRS will not be accepting electronically filed federal tax returns during that period. It also means that the Rhode Island Division of Taxation will not be accepting e-filed Rhode Island returns during that period because the federal/state e-file program will be unavailable. 

The joint fed-state e-file program is a cooperative tax‑filing effort between the IRS and most states, including Rhode Island. In general, it allows for federal and state returns to be e-filed simultaneously to the IRS. Once the returns are filed, the IRS keeps the federal portion; the state portion is passed along electronically to the applicable state. 

(Note: The IRS has issued a corrected announcement to reflect a date change. Therefore, this blog post has been updated as of May 22, 2018, at 9:17 a.m., and the new date issued by the IRS is underlined above.)

Thursday, May 3, 2018

Recent developments

Reports


On Monday, April 30, 2018, the Division of Taxation posted a report on the recently completed tax amnesty. To view a copy, click here.

On Tuesday, May 1, 2018, the Division of Taxation posted its annual report about the sales tax on alcoholic beverages. To view a copy, click here.


May 10 hearing


On May 10, 2018, the Division of Taxation will hold a public hearing on proposed amendments to four business-related regulations:

  • Consolidated returns. The Division proposes to include a sunset provision in the regulation, given that mandatory unitary combined reporting took effect for tax years on or after January 1, 2015. (For purposes of Rhode Island combined reporting, an affiliated group can elect to use the same members that the affiliated group includes in filing its federal consolidated return.) 
  • Limited liability companies: The Division proposes to match Rhode Island filing deadlines to federal due dates, and to set forth the filing deadline for single-member LLCs. (The Division has been following the deadlines in practice. The regulation formalizes the practice.)
  • Net operating loss deductions: The Division proposes to add language to reflect the treatment of NOLs for combined reporting purposes.
  • Qualified subchapter S subsidiary corporations: The Division proposes that the subchapter S corporation parent and its qualified subchapter S subsidiaries (Qsubs) must each obtain a federal employer identification number. 


The hearing will be held at the Department of Administration building (the Powers building) at One Capitol Hill in Providence. For each of the proposed regulations listed above, the format has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code). For more information about the codification process, and for more information about each proposed regulation (including further details about the hearing), see the Rhode Island Department of State (Secretary of State) website. Click here.

May 16 hearing


On May 16, 2018, the Division of Taxation will hold a public hearing on proposed amendments to two regulations involving historic tax credits. The proposed changes include removal of references to the franchise tax, which has been repealed.

The hearings will be held at the Department of Administration building (the Powers building) at One Capitol Hill in Providence. For each of the two regulations, the format has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code). For more information about the codification process, and for more information about each proposed regulation (including further details about the hearing), see the Rhode Island Department of State (Secretary of State) website. Click here.

Warning for small businesses


The Security Summit -- which includes the Internal Revenue Service, state tax agencies, and the nation’s tax industry -- warns small businesses to be on-guard against a growing wave of identity theft attempts against employers.

Small-business identity theft is big business for identity thieves. When businesses and their employees have their identities stolen, their sensitive information can be used to open credit card accounts or file fraudulent tax returns for bogus refunds. To read more about this issue, click here.

Tuesday, April 24, 2018

IRS warns of twist on an old scam

The Internal Revenue Service today warned of a new twist on an old phone scam as criminals use telephone numbers that mimic IRS Taxpayer Assistance Centers to trick taxpayers into paying non-existent tax bills. To learn more, click here.

Thursday, April 19, 2018

Public hearing May 9

The Rhode Island Division of Taxation will hold a public hearing on May 9, 2018, on proposed amendments to two regulations -- one involving forms reproduction, the other focusing on corporate tax (combined reporting).

The hearing will be held at the Department of Administration building (the Powers building) at One Capitol Hill in Providence beginning at 2:00 p.m.


In addition, the format of both regulations has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code). For more information about the codification process, and to view regulations, see the Rhode Island Department of State (Secretary of State) website.


Wednesday, April 18, 2018

Deadline is tonight

The Rhode Island Division of Taxation has extended this year’s tax deadline by one day. Therefore, the deadline for filing 2017 Rhode Island tax returns and for making Rhode Island tax payments is tonight – April 18, 2018.

Because of a computer-related outage at the Internal Revenue Service yesterday, the IRS last night extended the federal deadline to today. Rhode Island is following suit. “Having the same deadline for federal and Rhode Island filings and payments will be a convenience for tax professionals and taxpayers alike,” said Rhode Island Tax Administrator Neena S. Savage.

To learn more, click here.

Tuesday, April 17, 2018

Recent developments

IRS e-file outage


The Rhode Island Division of Taxation urges tax professionals and taxpayers to continue filing despite an outage today at the IRS. The Division also recommends e-filing. To learn more, click here.

  • IRS e-filing was out of commission for most of today. However, at around 5:00 p.m. (Eastern time) today, the IRS announced that the e-filing outage is over and that its system is up and running. For confirmation, click here.



Section 965 income


The Rhode Island Division of Taxation reminds tax preparers and taxpayers about certain Rhode Island tax obligations related to the federal tax legislation enacted in December 2017. 

“Due to recent inquiries from practitioners, we are confirming the treatment of Section 965 income  under Rhode Island law. This is a reminder that nothing has changed under Rhode Island law, and this guidance is intended to confirm the impact of federal tax reform,” said Rhode Island Tax Administrator Neena S. Savage. For details, click here.

Monday, April 16, 2018

Tax Administrator's reminder about deadline

Rhode Island Tax Administrator Neena Savage was interviewed this morning on Rhode Island Public Radio about tomorrow's tax-filing deadline. To learn more about the deadline for filings and payments, click here.
Rhode Island Tax Administrator Neena Savage on Rhode Island Public Radio.

Thursday, April 12, 2018

Wavemaker Fellowships

Rhode Island Governor Gina M. Raimondo and the Rhode Island Commerce Corporation have announced the re-opening of applications for the Wavemaker Fellowship.

The Wavemaker Fellowship is aimed at graduates working at jobs in science, technology, engineering, mathematics, and certain design fields. In general, the program provides a refundable tax credit that can cover student loan payments up to $6,000 per year for up to four years. 

To view the recent announcement, click here. For more about the program, including application instructions and eligibility requirements, click here.

Wednesday, April 11, 2018

Reminder about April 17 deadline

The Rhode Island Division of Taxation today issued a reminder about next week's personal income tax deadline. For details, click here.


Tuesday, April 10, 2018

Recent developments

Corporate estimated tax


The Rhode Island Division of Taxation reminds tax professionals and taxpayers that corporations have a new deadline and formula for making their estimated tax payments.

For a calendar-year C corporation in 2018, the first payment is due one week from today – on April 17, 2018. For more details, click here.

Regulations filed


The Rhode Island Division of Taxation yesterday filed, as final, 31 regulations with the Rhode Island Department of State (Secretary of State).

The regulations contain no major changes. Their format has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code), and some of the regulations include minor changes. The Division's action yesterday included the repeal of a number of regulations and merging or consolidating their content.

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. The Division intends to post from time to time, on this blog, brief descriptions of some -- but not all -- of the regulatory filings. However, all of the regulatory filings are available to view and to monitor at the Rhode Island Department of State website. Click here.

Security Summit issues alert


The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge taxpayers and tax professionals to be alert to identity theft scams, especially a new email version currently pretending to be from “IRS Refunds.” To learn more, click here.

Tuesday, April 3, 2018

Regulations posted as final

The Rhode Island Division of Taxation today posted, as final, five regulations. The regulations contain no major changes. Their format has been modified in accordance with the new Rhode Island Code of Regulations (a uniform state code), and some of the regulations include minor changes. For example:

  • One regulation has been updated so that it lists the new forms for filing amended returns for certain business taxes.
  • One regulation involves the conduct of public hearings. It is a standard regulation used by other State agencies.
  • A regulation involving estimated tax payments for businesses has been updated to reflect recent changes in law (including the dates on which installments are due).
  • A regulation involving limited liability partnerships and limited partnerships sets forth, among other things, the application of filing deadlines and of the annual filing charge (or filing fee).
  • A regulation involving the public service corporation tax reflects a recent change in the law involving due dates. 

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. The Division intends to post from time to time, on this blog, brief descriptions of some -- but not all -- of the regulatory filings. However, all of the regulatory filings are available to view and to monitor at the Rhode Island Department of State (Secretary of State) website.

Attorney General warns of tax scam

With the federal and state tax filing deadline two weeks away, consumer calls into the Rhode Island Attorney General's Office report a significant uptick in the frequency and aggressiveness of IRS scam phone calls. Consumers report receiving multiple phone calls per day, with most calls threatening immediate arrest for failure to make a payment for allegedly owed taxes.

"I think most, if not all, Rhode Islanders know this is a scam, but with these increasingly aggressive scare tactics, especially as we get closer to the filing deadline, I am concerned that vulnerable groups – including new taxpayers and older residents - will feel pressured into paying these scammers," said Attorney General Peter F. Kilmartin. "I implore everyone with older parents, children, relatives, and neighbors to have a conversation on how to spot this scam and what to do when these phone calls are received." To learn more, click here.

Recent developments

Estate tax update


The Rhode Island Division of Taxation recently provided an update about the Division’s Estate and Excise Tax section during a meeting of the Commission to Study the Feasibility of Modernizing Probate Law and Procedure.

“We were pleased to have been invited to attend the Commission’s meeting at Warwick City Hall and to provide Chair Peter Lewiss and Commission members with information they requested. The Commission does important work, and we want its members and all of our stakeholders to be kept current on the status of our agency and its work,” said Rhode Island Tax Administrator Neena S. Savage, Esq., who oversees the Division of Taxation.

As part of the ordinary course of business, three members of the Division’s Estate and Excise Tax section recently transferred to jobs in the private sector or elected to retire.  “We have been busy cross-training staff to help handle estate tax tasks while we seek to fill the open positions – something we do routinely,” Savage said. “As a result, there has been no gap in service. All estate tax returns and payments have been, and will continue to be, processed promptly and accurately,” she said.

The Estate Tax section is being managed on a day-to-day basis by Theriza Iafrate, chief of the Division’s Estate and Excise Tax section, which is open to the public from 8:30 a.m. to 3:30 p.m. business days. Contact information is as follows:


Rhode Island Division of Taxation’s Estate Tax Section
Phone number
(401) 574-8829, option # 8
Email address
Tax.Estate@tax.ri.gov
Fax number
(401) 574-8956



Hearing on regulations


The Rhode Island Division of Taxation will hold a public hearing on April 18 on a number of proposed regulations involving the personal income tax.

The Division proposes to adopt some regulations, amend some, and repeal some. Their format has been modified in accordance with the new Rhode Island Code of Regulations. Some of the proposed regulations include minor changes. These changes can be reviewed on the Rhode Island Department of State (Secretary of State) website and on the Division of Taxation’s website.

Many of the changes reflect updates in the law since the regulations were last revised or promulgated. One new update is in the W-2 Informational Returns regulation (280-RICR-20-55-9) that requires any employer receiving or applying for tax credits to electronically file its W-2 returns.

The proposed regulations are listed as follows:

Adoptions:


280-RICR-20-55-1 – Estimated Payments
280-RICR-20-55-3 – Credit for Income Taxes of Other States
280-RICR-20-55-5 – Filing Status of Spouses – Nonresident Military Personnel and Partial-Year Residents
280-RICR-20-55-7 – Trust Distributions

Amendments:


280-RICR-20-55-2 - Extension of Time to File
280-RICR-20-55-4 – Tax Preparer Penalties
280-RICR-20-55-6 – Fiscal Year Taxpayers’ Method of Computing Rhode Island Tax
280-RICR-20-55-8 – Lottery and Pari-Mutuel Winnings and Prizes
280-RICR-20-55-9 – W-2 Informational Returns
280-RICR-20-55-10 – Employers’ Withholding
280-RICR-20-55-11 – Taxation of Nonresident Professional Athletes
280-RICR-20-55-12 – Net Operating Loss Limitation

Repeals:


Personal Income Tax – Estimated Payments (ERLID 630)
Personal Income Tax – Underpayment of Estimated Tax Charges – Exceptions and Waiver (ERLID 628)
Personal Income Tax – Credit for Income Taxes of Other States (ERLID 739)
Out of State Credit – Double Resident (ERLID 2347)
Personal Income Tax – Rhode Island Filing States – Nonresident Military Personnel and His/Her Spouse (ERLID 638)
Personal Income Tax – Filing Status of Husband and Wife Where One Is a Partial-Year Resident (ERLID 650)
Personal Income Tax – Trust Distributions (ERLID 657)
Personal Income Tax – Beneficiaries’ Treatment of Accumulation Distribution by Trust (ERLID 714)
Personal Income Tax – Family Education Accounts – Taxpayers (ERLID 635)
Personal Income Tax – Family Education Accounts – Qualified Depositories (ERLID 636)
Personal Income Tax – Use of Substitute Rhode Island Blank Income Tax Forms (ERLID 730)
Personal Income Tax – Tax Liability Computed by Internal Revenue Service (ERLID 646)

The hearing is to take place at 9:30 a.m. on Wednesday, April 18, 2018, at the Department of Administration Building at One Capitol Hill, Providence, Rhode Island, diagonally across Smith Street from the State House.

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. The Division intends to post from time to time, on this blog, brief descriptions of some -- but not all -- of the regulatory filings. However, all of the regulatory filings are available to view and to monitor at the Department of State (Secretary of State) website.

Thursday, March 29, 2018

Check your withholding

The Internal Revenue Service today launched a national campaign to urge workers to perform a "paycheck checkup" to make sure that the amount of income tax withheld from their paychecks is just right. To learn more, click here.


Tuesday, March 27, 2018

Guide for surplus lines


The Rhode Island Division of Taxation today posted a guide to tax filings and payments for surplus lines (insurance) brokers/licensees. To view a copy, click here.


Monday, March 26, 2018

Employee Misclassification Task Force

The Underground Economy and Employee Misclassification Task Force -- a collaboration of six Rhode Island state agencies led by the Department of Labor and Training -- has submitted its latest annual report.

According to the report, the Division of Taxation found that 560 Rhode Island employees had been improperly classified in 2017, resulting in almost $6.2 million in unreported wages and an assessment of $307,177 in additional state taxes. 

The Division of Taxation highlight is just one part of the report. To learn more, click here.


Friday, March 23, 2018

Recent developments

Security Summit


The Division of Taxation, the Internal Revenue Service, and other members of the Security Summit have issued a warning for tax professionals to be alert to taxpayer data theft in the final weeks of the tax filing season.

The Security Summit partners also urged tax professionals to enhance their data safeguards immediately. For details, click here.

Amnesty update


The Rhode Island Division today announced that the recently completed tax amnesty program has generated more than $21.5 million, which is well above the original budgeted estimate of $12.5 million.

The 75-day amnesty began in early December 2017 and ended on February 15, 2018. The Division continues to fine-tune amnesty totals and will include the finalized totals in its formal report on amnesty, which is due on or before April 30, 2018. 

Report on corporate tax changes


The Division of Taxation recently posted its report on the corporate tax changes that were enacted in 2014, including a corporate tax rate reduction and the switch to combined reporting, single-sales-factor apportionment, and market-based sourcing.

The Division delivered the report to legislative leaders by the statutory deadline of March 15 and put the report on its website. Click here to view.

Tax credits


The Division of Taxation recently posted details about a rehabilitation project in downtown Providence involving $1.25 million in Rhode Island historic preservation tax credits.

The project involves the Woolworth Building, a five-story commercial block at 185 Westminster St., Providence. The plan is to keep business and retail use on the first three floors, and establish apartments on the top two floors.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program.


Wednesday, March 14, 2018

Deadline relief due to winter storms

Taxpayers who cannot file Form RI-7004 by the March 15 deadline because of the impact of the recent snowstorms may write to the Rhode Island Division of Taxation to request relief. In such cases, the Division will set the deadline as March 20, 2018. To learn more about this deadline relief, click here.

Thursday, March 1, 2018

Division plans public hearing


The Rhode Island Division of Taxation will hold a public hearing on March 12 on six proposed regulations. 

Broadly speaking, the proposed regulations contain no substantive changes. Their format has been modified in accordance with the new Rhode Island Code of Regulations, and some of the proposed regulations include minor changes. 

The hearing will take place at 9:30 a.m. on Monday, March 12, 2018, at the Department of Administration Building at One Capitol Hill, Providence, Rhode Island, diagonally across Smith Street from the State House.

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. 

The Division intends to post from time to time, on this blog, brief descriptions of some -- but not all -- of the regulatory filings. However, all of the regulatory filings are available to view and to monitor at the following Department of State (Secretary of State) website: http://www.sos.ri.gov/divisions/open-government/state/rules-and-regulations.