NBC 10 I-Team: Frustrated RI funeral homes meet with state
A group of funeral directors and funeral home owners met with officials from Rhode Island’s Division of Taxation this week, frustrated over recent audits targeting their businesses.
But they didn’t get the answers they were hoping for.
That meeting included Ted Wynne, owner of the Manning-Heffern Funeral Home in Pawtucket, whose business is being audited right now.
"Our question overall was, 'When did the interpretation of the law change?'" Wynne said of the meeting. "We did not get an appropriate answer to that."
As NBC 10 News first reported, at least six funeral homes have been audited in recent months, with at least one of the businesses, Carpenter Jenks in West Warwick, left with a tax bill exceeding $25,000.
“I came to find out that quite a few funeral homes were being audited,” Wynne said.
Part of the problem: back taxes for items the state believes are subject to sales tax, including cremation urns.
Due to a quirk in Rhode Island law, caskets are tax-exempt while urns are fully taxable. Now, the Division of Taxation is actively going after those tax dollars, looking back as far as seven years and charging interest and penalties in some cases.
"For years, everybody assumed -- that's the magic word, assumed -- that those things were under the umbrella,” Wynne said of cremation urns and other items including prayer cards. “Apparently, they weren't."
Funeral directors told NBC 10 cremation wasn’t common when the law was written in the 1950’s, so urns weren’t specifically listed. A bipartisan bill to add urns and prayer cards was introduced in the State House this year. It passed in the Senate, but never made it to the floor of the House for a vote.
Wynne said the Funeral Directors Association doesn’t have a lobbyist, but beyond that, he’s not sure why the legislation stalled.
"You could ask the Speaker. He'd probably have a better answer,’ he said.
NBC 10 reached out to House Speaker Nick Mattiello. His spokesman, Larry Berman, said the bill, H-8325, was introduced after the 2019 budget was passed, making it too late to account for the financial impact. But Berman said the House would take another look at the issue if legislation is introduced again in 2019.
Wynne said funeral homes aren’t arguing about paying their taxes, but they would have appreciated a heads-up from the Division of Taxation that sales tax was now being collected on items urns and prayer cards.
"I don't think anybody in the industry would have had as much to say if we'd received a letter somewhere along the line,” he said.