2015 -- H 5556

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LC001582

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION -- MOTOR VEHICLE TAX ELIMINATION

     

     Introduced By: Representatives Maldonado, Shekarchi, Johnston, Coughlin, and

     Date Introduced: February 25, 2015

     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 § 44-34-1 may be phased out. The phase-out shall apply to all motor vehicles and

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trailers, including leased vehicles.

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     (2) Lessors of vehicles that pay excise taxes directly to municipalities shall provide

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lessees, at the time of entering into the lease agreement, an estimate of annual excise taxes

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payable throughout the term of the lease. In the event the actual excise tax is less than the

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estimated excise tax, the lessor shall annually rebate to the lessee the difference between the

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actual excise tax and the estimated excise tax.

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     (b) Pursuant to the provisions of this section, all motor vehicles shall be assessed a value

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by the vehicle value commission. That value shall be assessed according to the provisions of §

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44-34-11(c)(1) and in accordance with the terms as defined in subsection (d) of this section;

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provided, however, that the maximum taxable value percentage applicable to model year values

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as of December 31, 1997, shall continue to be applicable in future year valuations aged by one

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year in each succeeding year.

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     (c)(1) The motor vehicle excise tax phase-out shall commence with the excise tax bills

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mailed to taxpayers for the fiscal year 2000. The phase-out, beyond fiscal year 2003, shall be

 

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subject to annual review and appropriation by the general assembly. The tax assessors of the

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various cities and towns and fire districts shall reduce the average retail value of each vehicle

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assessed by using the prorated exemptions from the following table:

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Local Fiscal Year Exempt from value Local Exemption State fiscal year 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 (1.22%) of net terminal income derived from video lottery games pursuant to the

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

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prior fiscal year.

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     for fiscal year 2011 and thereafter, the exemption shall be five hundred dollars ($500);

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provided, however, that for fiscal years 2017 and thereafter, the exemption shall be six thousand

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dollars ($6,000) for residents of distressed communities as defined in §45-13-12, reimbursement

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for which shall be from the state general fund. Cities and towns may otherwise provide an

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additional exemption; provided, however, any such additional exemption shall not be subject to

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reimbursement.

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     (2) The excise tax phase-out shall provide levels of assessed value reductions until the tax

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is eliminated or reduced as provided in this chapter.

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

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     (4) The excise tax rates and ratios of assessment shall be maintained at a level identical to

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

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

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

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limited to the lesser of the maximum taxable value or net assessed value for purposes of

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collecting the tax in any given year. Provided, however, for fiscal year 2011 and thereafter, the

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rates and ratios of assessment may be less than but not more than the rates described in this

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subsection (4).

 

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     (d) Definitions.

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     (1) "Maximum taxable value" means the value of vehicles as prescribed by § 44-34-11

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reduced by the percentage of assessed value applicable to model year values as determined by the

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

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

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vehicle value commission as of December 31, 1997, the maximum taxable value shall be the

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latest value determined by a local assessor from an appropriate pricing guide, multiplied by the

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ratio of assessment used by that city, town, or fire district for a particular model year as of

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December 31, 1997.

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     (2) "Net assessed value" means the motor vehicle values as determined in accordance

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with § 44-34-11 less all personal exemptions allowed by cities, towns, fire districts, and the state

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of Rhode Island exemption value as provided for in § 44-34.1-1(c)(1).

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     (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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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 dollar ($6,000) state funded exemption to the

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motor vehicle excise tax for residents of distressed communities beginning in fiscal year 2017.

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     This act would take effect upon passage.

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