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Rhode Island sales tax notices

Got a letter from the Rhode Island Department of Revenue, Division of Taxation? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Rhode Island Department of Revenue, Division of Taxation (opens in a new tab)

Disagree with a notice?

To dispute a sales or use tax assessment or deficiency, send the Tax Administrator a written request for a hearing. The Division schedules a hearing and then sets the correct tax, interest and penalties. The hearing request must be in writing and signed by the taxpayer or their attorney or accountant. If a jeopardy assessment was made, it must be paid before a hearing is held. Final decisions can be appealed to the Sixth Division District Court.

Deadline: 30 days from the date the notice of assessment was mailed

Source: Rhode Island Department of Revenue, Division of Taxation (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Assessment

A bill for additional tax, interest and penalties. The Division mails it after it closes an audit or finds a deficiency.

Why you got it

  • An audit found tax that was not reported or paid
  • The Division found a deficiency on your account

What to do

  1. Compare the notice with the audit workpapers and your own records.
  2. If you disagree, including with the penalties, send a written hearing request to the Tax Administrator within 30 days of the mailing date.
  3. If you agree with the tax, pay the tax and interest, or contact Compliance and Collections about an installment agreement.
  4. Once all tax and interest is paid, you can mail a letter asking for a penalty waiver. The Division grants these only in rare hardship cases.

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Protest must be requested within 30 days

Source: What to Expect During an Audit | RI Division of Taxation (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Audit Contact Letter

The first letter in a Division of Taxation audit. It names the Revenue Agent assigned to your case and asks you to send back a contact page.

Why you got it

  • Your business has been selected for an audit by the Audit and Investigation Section

What to do

  1. Fill out the return contact page with your business contact details and send it to the Revenue Agent named in the letter.
  2. Get ready for the preliminary conference, where the audit period, business activities and field review dates are set.
  3. Gather the records for the audit period so the review can finish on time.
  4. If a tax professional will represent you, file the Power of Attorney form RI-2848.

Source: What to Expect During an Audit | RI Division of Taxation (opens in a new tab)

Registration

Changes to your permit or account: required registration, filing-frequency changes, revocation, or closure.

Registration

Sales Block

The Division will not renew your permit to make retail sales because you have unpaid or unfiled Rhode Island taxes. Without a sales permit you may not do business in Rhode Island.

Why you got it

  • You were told your account is delinquent and did not become compliant
  • Blocks are issued each year with the sales permit renewal (permits run July 1 to June 30)

What to do

  1. Contact Compliance and Collections for a current list of your delinquent Rhode Island tax obligations.
  2. File all missing returns and pay the taxes owed through the Tax Portal or by mail, or sign an installment agreement. Mailed payments must be a bank check or money order.
  3. A block does not apply while you are pursuing an administrative or judicial review, are in bankruptcy or receivership, or have a signed installment agreement.

Source: Sales Block | RI Division of Taxation (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Statement of Account

A notice showing that an unpaid bill has moved to a collection case. It lists every known debt and how much must be paid on each account to bring it into compliance.

Why you got it

  • A billed amount was not resolved within 30 days of the bill assessment

What to do

  1. Check each debt and period listed against your records.
  2. Pay the tax and interest, or call Compliance and Collections at 401-574-8941 for help making a payment.
  3. If you cannot pay in full, apply for an installment agreement. Financially distressed businesses can apply for an offer in compromise. Both forms are on the Compliance & Collections Forms page.
  4. Once all tax and interest is paid, you can mail a letter asking for a penalty waiver on hardship grounds.

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Compliance & Collections | RI Division of Taxation (opens in a new tab)

Collections

Formal notice of intent to publish (Business Tax Delinquents list)

A formal notice, sent by regular and certified mail, that the Division plans to publish your business name, address and amount owed on its public list of business tax delinquents.

Why you got it

  • You owe at least $50,000 in Rhode Island business taxes, such as sales tax
  • The tax has been unpaid for more than 90 days after its due date and is not on appeal

What to do

  1. Check the amount against your records. If you think it is wrong or is under appeal, contact Compliance and Collections at 401-574-8941 right away.
  2. Pay the delinquency or enter into an installment agreement before the notice period ends.
  3. Once all tax and interest is paid, you can mail a letter asking for a penalty waiver. The Division grants these only in rare hardship cases.

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 30 days (the notice is sent 30 days before publication)

Source: Business Tax Delinquents | RI Division of Taxation (opens in a new tab)

Ask for penalty relief

Penalties on a Rhode Island notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty Waiver

  1. Pay all tax and interest in full. The Division considers a waiver only after that
  2. Mail a letter to the Division of Taxation stating the type of penalty, the amount of penalty, and the reason for your request
  3. The Division will contact you once it has reviewed the request

What qualifies: Hardship, granted only in certain rare scenarios. The Division's Taxpayer Rights page also lists the right to ask for penalties to be abated where there was no negligence or intentional disregard of the law

Interest: All tax and interest must be paid in full before a penalty waiver is considered. The Taxpayer Rights page allows abatement of interest only where it is attributable to erroneous written advice from the Division

Source: Compliance & Collections | RI Division of Taxation (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Rhode Island sales tax guide.

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