PROVIDENCE, R.I. (WPRI) — The Rhode Island Division of Taxation is giving taxpayers a chance to come clean.
If you purchased something online or out-of-state and did not pay a sales tax, now is your chance to pay up without being penalized.
The state is allowing individuals and businesses to self-audit to see if you owe Rhode Island’s 7 percent sales tax. Or, you can wait for the state to audit you and potentially face the consequences.
Many online retailers don’t charge sales tax, and it’s up to you to report it at tax time.
“The responsibility falls on the business or individual to report that item to the state and pay the use tax,” explained Rhode Island Tax Administrator David Sullivan.
Once you perform the self-audit, you can submit your results along with payment for the tax, and the Division of Taxation will waive all penalties. The biggest impact will be on businesses that made large purchases out of state and never paid sales tax.
“This gives them the chance to look back three years,” said Sullivan. “If they have any use taxes they should have paid, they should join this program, we’ll waive up to 75 percent of any interest and penalty.”
Right now, this program is only limited to the use tax.
If you don’t report the sales tax and get audited, the state will assess full interest at 18 percent per year, plus penalties.