Rhode Island Senate Bill S2895

Rhode Island 2022 Regular Session

• Introduced: 4/26/22
• Refer: 4/26/22

Caption

State Tax Officials

Impact

The changes introduced by S2895 are expected to relieve some of the financial burdens faced by businesses affected by the economic downturn due to the COVID-19 pandemic. By waiving interest and penalties on portions of the PPP loans that have been taxed or forgiven, the bill aims to provide a bridge for businesses to recover financially. Furthermore, the provisions also detail how the tax administrator will compute interest rates based on the prevailing prime rates, thus adding a layer of transparency to the process.

Summary

S2895 is a legislative act introduced in the Rhode Island General Assembly, aimed at amending the taxation laws specifically regarding the handling of overpayments of state tax. The bill seeks to clarify how interest on overpayments is calculated and establishes provisions for waiving interest and penalties on certain tax aspects related to the Paycheck Protection Program (PPP) loans during specific tax years (2020 and 2021). This is particularly noteworthy for businesses that received PPP loans, as it offers them an option to mitigate their tax obligations during a challenging economic period.

Contention

Although specific contentious points regarding S2895 are not extensively documented, the waiver of interest and penalties could raise questions among fiscal conservatives or those concerned about the potential impact on state revenues. The act represents a shift in how state tax officials manage overpayments and underscores a growing need to support businesses in hardship, highlighting the balancing act between maintaining state revenue and providing economic relief.