A N A C T
RELATING TO AUTOMOBILE EXCISE TAX
It is enacted by the General Assembly as follows:
SECTION 1. Sections 44-34.1-1 and 44-34.1-2 of the General Laws in Chapter 44-34.1 entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998" are hereby amended to read as follows:
44-34.1-1. Excise tax phase out. -- (a) Notwithstanding the provisions of chapter 34 of this title or any other provisions to the contrary, the motor vehicle and trailer excise tax established by section 44-34-1 shall be phased out by the fiscal year 2005. The phase out applies to all motor vehicles and trailers, including leased vehicles.
Lessors of vehicles that pay excise taxes directly to municipalities shall provide lessees, at the time of entering into the lease agreement, an estimate of annual excise taxes payable throughout the term of the lease. In the event the actual excise tax is less than the estimated excise tax, the lessor shall rebate annually to the lessee the difference between the actual excise tax and the estimated excise tax.
(b) Pursuant to the provisions of this section, all motor vehicles are assessed a value by the vehicle value commission. That value is assessed according to the provisions of section 44-34-11(c)(1). and in accordance with the terms as defined herein, provided, however, that the maximum taxable value percentage applicable to model year values as of December 31, 1997 shall continue to be applicable in future year valuations aged by one year in each succeeding year.
(c) (1) The motor vehicle excise tax phase out commences with the excise tax bills mailed to taxpayers for the fiscal year 2000. The tax assessors of the various cities and towns and fire districts shall reduce the average retail value of each vehicle assessed by using the prorated exemptions from the following table:
|
Year |
Exempt from value |
|
fiscal year 2000 |
$1,500 |
|
fiscal year 2001 |
$2,500 |
|
fiscal year 2002 |
$3,500 |
|
fiscal year 2003 |
$8000 |
|
fiscal year 2004 |
$10,000 |
|
fiscal year 2005 |
$15,000 |
|
fiscal year 2006 |
All vehicles |
(2) The excise tax phase out provides increased levels of assessed value reductions until the tax is eliminated.
(3) Current exemptions remain in effect throughout the phase out period.
(4) The excise tax rates and ratios of assessment shall not be greater than fiscal year 1998 levels for each city, town, and fire district, provided, however, in the Town of Johnston the excise tax rate and ratios of assessment shall not be greater than fiscal year 1999 levels and in no event shall the final taxable value of a vehicle be higher than assessed in the prior fiscal year. and the levy of a city, town, or fire district shall be limited to the lesser of the maximum taxable value or net assessed value for purposes of collecting the tax in any given year.
(d) Definitions:
(1) Maximum taxable value: The value of vehicles as prescribed by section 44-34-11 of the R.I. general laws reduced by the percentage of assessed value applicable to model year values as determined by the Rhode Island Vehicle Value Commission as of December 31, 1997 for the vehicles valued by the commission as of December 31, 1997. For all vehicle value types not valued by the Rhode Island Vehicle Value Commission as of December 31, 1997, the maximum taxable value shall be the latest value determined by a local assessor from an appropriate pricing guide, multiplied by the ratio of assessment used by that city, town, or fire district for a particular model year as of December 31, 1997.
(2) Net assessed value: The motor vehicle values as determined in accordance with section 44-34-11 of the Rhode Island general laws less all personal exemptions allowed by cities, towns, fire districts, and the state of Rhode Island exemption value as provided for in section 44-34.1-1 (c)(1).
44-34.1-2. City and town and fire district reimbursement. -- (a) During the vehicle excise tax phase out in fiscal years 2000 through 2006, cities and towns and fire districts shall receive advance reimbursements from state general revenues equal to the amount of lost tax revenue due to the phase out of the excise tax. Upon elimination of the tax and beginning in fiscal year 2006, cities and towns and fire districts shall receive a permanent distribution of sales tax revenue pursuant to section 44-18-18 in an amount equal to any lost revenue resulting from the excise tax elimination. Lost revenues must be determined using a base tax rate fixed at fiscal year 1998 levels for each city, town, and fire district except that the Town of Johnston's base tax rate must be fixed at a fiscal year 1999 level.
(b) (1) The director of administration shall determine the amount of general revenues to be distributed to each city and town and fire district for the fiscal years 1999 through 2005 so that every city and town and fire district is held harmless from tax loss resulting from this chapter, assuming that tax rates are indexed to inflation.
(2) The director of administration shall index the tax rates for inflation by applying the annual change in the December consumer price index -- all urban consumers (CPI-U), published by the bureau of labor statistics of the United States department of labor, to the indexed tax rate used for the prior fiscal year calculation. The director shall apply the following principles in determining reimbursements:
(i) Exemptions granted by cities and towns and fire districts in the fiscal year 1998 must be applied to assessed values prior to applying the exemptions in section 44-34.1-1(c)(1). Cities and towns and fire districts will not be reimbursed for these exemptions.
(ii) No city or town or fire district shall be reimbursed for more than would have been levied had the exemptions contained in section 44-34.1-1(c)(1) not been applied, and the average retail prices determined by the Rhode Island vehicle value commission been set as the average retail price in Rhode Island using retail sales prices determined for Rhode Island state sales tax purposes as they had been for fiscal year 1999, prior to the passage of this chapter. City, town, and fire districts shall be reimbursed by the state for revenue losses attributable to the exemptions provided for in 44-34.1-1 and the inflation indexing of tax rates provided, however, that reimbursement for revenue losses shall be calculated based upon the difference between the maximum taxable value less personal exemptions and the net assessed value.
(iii) Inflation reimbursements shall be the difference between:
(A) The levy calculated at the tax rate used by each city and town and fire district for fiscal year 1998 after adjustments for personal exemptions but prior to adjustments for exemptions contained in section 44-34.1-1(c)(1); provided, however, that for the Town of Johnston the tax rate used for fiscal year 1999 must be used for the calculation; and
(B) The levy calculated by applying the appropriate cumulative inflation adjustment to the tax rate used by each city and town and fire district for fiscal year 1998; provided, however, that for the Town of Johnston the tax rate used for fiscal year 1999 shall be used for the calculation after adjustments for personal exemptions but prior to adjustments for exemptions contained in section 44-34.1-1.
(c) (1) Funds shall be distributed to the cities and towns and fire districts as follows:
(i) On October 20, 1998, and each October 20 thereafter through October 20, 2004, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.
(ii) On February 20, 1999, and each February 20 thereafter through February 20, 2005, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.
(iii) On June 20, 1999, and each June 20 thereafter through June 20, 2005, fifty percent (50%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.
Each city, town, or fire district shall submit final certified and reconciled motor vehicle levy information by August 30 of each year. Any adjustment to the estimated amounts paid in the previous fiscal year shall be included or deducted from the payment due October 20.
(iv) On any of the payment dates specified in subsections (i) through (iii), the Director shall be authorized to deduct previously made over payments or add supplemental payments as may be required to bring such reimbursements into full compliance with the requirements of the statute.
(v) For the City of East Providence, the payment schedule shall be twenty-five percent (25%) on February 20, twenty-five percent (25%) on June 20, which shall include final reconciliation of the previous year's payment, and fifty percent (50%) on October 20.
(2) Funds distributed to the cities and towns and fire districts for fiscal year 2006 shall be calculated as the funds distributed in fiscal year 2005 adjusted by the change in the consumer price index -- all urban consumers (CPI-U) published by the Bureau of Labor Statistics of the United States Department of Labor from June 2004 to June 2005. Twenty-five percent (25%) of the amounts calculated shall be distributed to the cities and towns and fire districts on October 20, 2005, twenty-five percent (25%) on February 20, 2006, and fifty percent (50%) on June 20, 2006. The funds shall be distributed to each city and town and fire district in the same proportion as distributed in fiscal year 2005.
(3) Prior to October 20, 2006, the director of administration shall calculate to the nearest tenth of one cent the number of cents of sales tax received for the fiscal year ending June 30, 2005, equal to the amount of funds distributed to the cities and towns and fire districts under this chapter during fiscal year 2006, and the percent of the total funds distributed in fiscal year 2006, received by each city and town and fire district, calculated to the nearest one-hundredth of one percent. The director of administration shall transmit those calculations to the governor, the speaker of the house, the president of the senate, the chairperson of the house finance committee, the chairperson of the senate finance committee, the house fiscal advisor, and the senate fiscal advisor. The number of cents, applied to the sales taxes received for the prior fiscal year, shall be the basis for determining the amount of sales tax to be distributed to the cities and towns and fire districts under this chapter for fiscal year 2007, and each year thereafter. The cities and towns and fire districts shall receive that amount of sales tax in the proportions calculated by the director of administration as that received in fiscal year 2006.
(4) Twenty-five percent (25%) of the funds shall be distributed to the cities and towns and fire districts on October 20, 2006, and every October 20 thereafter; twenty-five percent (25%) shall be distributed on February 20, 2007, and every February 20 thereafter; and fifty percent (50%) shall be distributed on June 20, 2007, and every June 20 thereafter.
For the City of East Providence, twenty-five percent (25%) shall be distributed on February 20, 2007 and every February 20 thereafter; twenty-five percent (25%) shall be distributed on June 20, 2007 and every June 20 thereafter, and fifty percent (50%) of the funds shall be distributed on October 20, 2007 and every October 20 thereafter.
SECTION 2. This act shall take effect upon passage.