2013 -- H 5093

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LC00298

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION -- MOTOR VEHICLE TAX ELIMINATION

     Introduced By: Representatives Silva, and Serpa

     Date Introduced: January 16, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-34.1-1 of the General Laws in Chapter 44-34.1 entitled "Motor

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Vehicle and Trailer Excise Tax Elimination Act of 1998" is hereby amended to read as follows:

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     44-34.1-1. Excise tax phase-out. -- (a) (1) Notwithstanding the provisions of chapter 34

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of this title or any other provisions to the contrary, the motor vehicle and trailer excise tax

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established by section 44-34-1 may be phased out. The phase-out shall apply to all motor vehicles

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and trailers, including leased vehicles. (2) Lessors of vehicles that pay excise taxes directly to

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municipalities shall provide lessees, at the time of entering into the lease agreement, an estimate

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of annual excise taxes payable throughout the term of the lease. In the event the actual excise tax

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is less than the estimated excise tax, the lessor shall annually rebate to the lessee the difference

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between the actual excise tax and the estimated excise tax. (b) Pursuant to the provisions of this

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section, all motor vehicles shall be assessed a value by the vehicle value commission. That value

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shall be assessed according to the provisions of section 44-34-11(c)(1) and in accordance with the

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terms as defined in subsection (d) of this section; provided, however, that the maximum taxable

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value percentage applicable to model year values as of December 31, 1997, shall continue to be

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applicable in future year valuations aged by one year in each succeeding year. (c) (1) The motor

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vehicle excise tax phase-out shall commence with the excise tax bills mailed to taxpayers for the

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fiscal year 2000. The phase-out, beyond fiscal year 2003, shall be subject to annual review and

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appropriation by the general assembly. The tax assessors of the various cities and towns and fire

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districts shall reduce the average retail value of each vehicle assessed by using the prorated

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exemptions from the following table:

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      Local Fiscal Year State fiscal year

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      Exempt from value Local Exemption Reimbursement

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      fiscal year 1999 0 $1,500

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      fiscal year 2000 $1,500 $2,500

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      fiscal year 2001 $2,500 $3,500

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      fiscal year 2002 $3,500 $4,500

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      fiscal years 2003, 2004 and 2005 $4,500 $4,500

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      for fiscal year 2006 and $5,000 $5,000

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      for fiscal year 2007 $6,000 $6,000

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      for fiscal years 2008, 2009 and 2010 the exemption and the state fiscal year

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reimbursement shall be increased, at a minimum, to the maximum amount to the nearest two

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hundred and fifty dollar ($250) increment within the allocation of one and twenty-two hundredths

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percent (l.22%) of net terminal income derived from video lottery games pursuant to the

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provisions of section 42-61-15, and in no event shall the exemption in any fiscal year be less than

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the prior fiscal year. For fiscal year 2011 and thereafter, the exemption shall be five hundred

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dollars ($500); provided, however, that the fiscal year 2014 and thereafter, the exemption shall be

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six thousand dollars ($6,000) for residents of distressed communities as defined in section 45-13-

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12. Cities and towns may provide an additional exemption; provided, however, any such

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additional exemption shall not be subject to reimbursement. (2) The excise tax phase-out shall

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provide levels of assessed value reductions until the tax is eliminated or reduced as provided in

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this chapter. (3) Current exemptions shall remain in effect as provided in this chapter. (4) The

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excise tax rates and ratios of assessment shall be maintained at a level identical to the level in

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effect for fiscal year 1998 for each city, town, and fire district; provided, in the town of Johnston

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the excise tax rate and ratios of assessment shall be maintained at a level identical to the level in

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effect for fiscal year 1999 levels and the levy of a city, town, or fire district shall be limited to the

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lesser of the maximum taxable value or net assessed value for purposes of collecting the tax in

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any given year. Provided, however, for fiscal year 2011 and thereafter, the rates and ratios of

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assessment may be less than but not more than the rates described in this subsection (4). (d)

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Definitions. (1) "Maximum taxable value" means the value of vehicles as prescribed by section

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44-34-11 reduced by the percentage of assessed value applicable to model year values as

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determined by the Rhode Island vehicle value commission as of December 31, 1997, for the

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vehicles valued by the commission as of December 31, 1997. For all vehicle value types not

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valued by the Rhode Island vehicle value commission as of December 31, 1997, the maximum

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taxable value shall be the latest value determined by a local assessor from an appropriate pricing

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guide, multiplied by the ratio of assessment used by that city, town, or fire district for a particular

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model year as of December 31, 1997. (2) "Net assessed value" means the motor vehicle values as

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determined in accordance with section 44-34-11 less all personal exemptions allowed by cities,

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towns, fire districts, and the state of Rhode Island exemption value as provided for in section 44-

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34.1-1(c)(1). (e) If any provision of this chapter shall be held invalid by any court of competent

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jurisdiction, the remainder of this chapter and the applications of the provisions hereof shall not

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be effected thereby.

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     SECTION 2. This act shall take effect upon passage.

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LC00298

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- MOTOR VEHICLE TAX ELIMINATION

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     This act would provide a six thousand dollars ($6,000) exemption to the motor vehicle

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excise tax for residents of distressed communities.

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     This act would take effect upon passage.

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LC00298

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