The Rhode Island Department of Administration today confirmed that all state personal income tax refunds processed in the January to June 2010 period have been cleared for payment. Since January, the Rhode Island Division of Taxation has processed 565,029 personal income tax returns. The State distributed $213,684,580 in personal income tax refunds to 391,681 filers. The average personal income tax refund was $545.56.
“We greatly appreciate the patience and understanding of the taxpayers for the delay in distributing personal income tax refunds,” said Rosemary Booth Gallogly, Director of Administration and Acting Director of Revenue.
Due to the historical March floods, the federal Internal Revenue Service (IRS) extended the April 15th filing deadline to May 11th, allowing those impacted by the floods extra time to file returns. By law, the state Division of Taxation adopted the IRS’ extended filing deadline. As a result, the State slowed the distribution of tax refunds to ensure that sufficient cash was available to pay the State’s $350.0 million of Tax Anticipation Notes (TANs) that matured on June 30, 2010. The necessary amount of cash needed to pay the TANs was realized on June 21, 2010 and all personal income tax refunds that were being held for payment were released.
The State began holding refunds for payment on April 12, 2010 in order to manage its cash flow. As revenues became available, the State paid refunds on a first-in-first-out basis. This approach meant that taxpayers with processed refunds never had to wait more than five weeks before their refund was cleared for payment.