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Rhode Island tax amnesty starts December 1, 2017


 Tax amnesty programs can be a great option for businesses with outstanding tax liabilities.

On Aug. 3, the Rhode Island Legislature enacted a bill authorizing the state to offer a tax amnesty. It will apply to all Rhode Island state taxes for any tax period ending on or before Dec. 31, 2016, and be open to any Rhode Island taxpayers with delinquent taxes. The Division of Taxation will start accepting applications for amnesty on Dec. 1, 2017; the program concludes Feb. 15, 2018.

Benefits of tax amnesty

This tax amnesty program does not forgive past tax liability. Eligible participants are required to pay “the tax and interest due upon filing the amnesty tax return.” (A short-term payment plan may be available for taxpayers with financial hardship.) In exchange, the state will waive applicable penalties and reduce the interest owed by 25 percent.

For the taxable period for which amnesty has been granted, the tax administrator will not seek civil or criminal prosecution of taxpayers accepted into the amnesty program.

Rhode Island last offered tax amnesty in the fall of 2012. Applicable to corporate and personal income tax, employer taxes, and sales and use tax, it generated approximately $17 million for the state.

FBA sales tax amnesty

 

Rhode Island businesses that make sales in other states through Fulfillment by Amazon (FBA) and other online marketplace providers may also be interested in an upcoming marketplace seller sales tax amnesty program. It’s only open to online marketplace sellers whose sole physical connection with participating states is through inventory stored in a marketplace provider’s warehouse or fulfillment center.

To date, Alabama, Arkansas, Colorado, Connecticut, Florida, Idaho, Iowa, Kansas, Kentucky, Louisiana, Missouri, Nebraska, New Jersey, Oklahoma, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, D.C., and Wisconsin have signed on to participate. The program is being coordinated by the Multistate Tax Commission, a tax agency dedicated to promoting fair tax policies, as well as state and local tax compliance.

The marketplace seller sales tax amnesty program will run Aug. 17–Oct. 17. Unlike the Rhode Island and other state-specific tax amnesty programs, this one forgives back taxes and waives all interest and penalties for taxpayers accepted into the program. Additional information.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.