Bill aims to increase interest on delayed tax returns

PROVIDENCE, R.I. (WPRI) — As thousands of Rhode Islanders continue to wait on their tax returns, a state lawmaker is proposing legislation that would force the state to pay added interest on late refunds.

Rep. Doreen Costa said she’s had several constituents waiting months for their tax refunds because of minor mistakes on their forms.

“It’s negligence on the Division of Taxation,” she said. “They should be calling these people and say, ‘come on down, let’s get this fixed so we can get your money to you,’ and they’re not doing that.”

Costa, R-North Kingstown, submitted her bill on Tuesday, saying she has two co-sponsors, Reps. Robert Nardolillo and Sherry Roberts. The proposal would require the state to pay interest at 12 percent per day to anyone who’s still waiting on their refund after June 30.

“Why should they charge you 18 percent for every time you’re late and you owe taxes, and you can’t do anything when it’s the other way around?” Costa asked. “It’s not right.”

The state of Rhode Island is currently required to pay interest at 3.25 percent for any returns that aren’t issued within 90 calendar days of the filing deadline, as long as they were filed on time. Since this year’s deadline was April 18, interest payments would begin in mid-July.

A spokesperson for Gov. Gina Raimondo said her office plans to review the legislation.

“We’ve already identified more than 40,000 returns that have had mistakes or have multiple filings using the same SSN. Each one of these 40,000 returns needs to be individually reviewed. Unfortunately, getting it right and getting it done fast don’t always go together.”

Last week, the acting tax administrator said she expects all refunds to be issued by mid-July. Approximately 6,000 were issued in the past week alone, meaning the Division of Taxation has so far sent out about 90 percent of the refunds owed this tax season.

In a statement, a spokesperson for the agency said, “the Division is operating in the best interests of Rhode Islanders. It has allocated resources to expedite refunds while continuing to protect taxpayers from fraud and identity theft.”

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