Rhode Island House Bill H5620

Rhode Island 2023 Regular Session

• Introduced: 2/15/23
• Refer: 2/15/23

Caption

State Tax Officials

Impact

One of the notable aspects of H5620 is the reduction of the minimum interest rate applicable to delinquent payments from 18% to 12% after January 1, 2023. Furthermore, the bill provides that no interest will be assessed more than four years prior to when a notice is sent to the taxpayer regarding the delinquency. This change in policy is aimed at easing the financial burden on taxpayers who fall behind in their tax obligations and may make it easier for them to manage their debts without facing excessively high interest penalties.

Summary

House Bill 5620 addresses the issue of state taxation, specifically concerning the interest rates applied to delinquent tax payments. The bill amends Section 44-1-7 of the General Laws in Rhode Island relating to state tax officials, outlining how interest is calculated on unpaid taxes. It sets a limit on the interest to be assessed, modifying the current regulations to provide clarity for both the tax administrator and taxpayers on how and when interest applies to late payments.

Contention

During the discussions surrounding H5620, potential points of contention include the implications of reducing the interest rates for delinquent payments. Supporters of the bill argue that it will create a more equitable tax environment for taxpayers struggling with payments, while critics may express concerns about the impact on state revenue and whether the changes may encourage delayed payments. There is also the potential pushback regarding the overall approach to tax enforcement and the balance between tax collection efficiency and fairness to taxpayers.