2013 -- H 5369

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LC00434

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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 AND TRAILER EXCISE TAX

ELIMINATION ACT OF 1998

     Introduced By: Representatives Shekarchi, Serpa, Bennett, McNamara, and Giarrusso

     Date Introduced: February 12, 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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     (1) 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

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     and 2005 $4,500 $4,500

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     for fiscal year 2006 and $5,000

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     $5,000 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.

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     for fiscal year years 2011, 2012 and 2013, thereafter, the exemption shall be five hundred

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dollars ($500). Cities and towns may provide an additional exemption; provided, however, any

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such additional exemption shall not be subject to reimbursement.

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     (2) For fiscal year 2014 and thereafter: (i) A flat tax of no more than six hundred dollars

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($600) per year shall be imposed on any motor vehicle deemed by the Rhode Island motor vehicle

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commission to be less than three (3) years old; and (ii) A flat tax of no more than three hundred

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sixty dollars ($360) per year shall be imposed on any motor vehicle deemed by the Rhode Island

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motor vehicle commission to be more than three (3) years old.

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

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tax 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 section 44-34-

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

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

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

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

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

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

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state of Rhode Island exemption value as provided for in section 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 on January 1, 2014.

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LC00434

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - MOTOR VEHICLE AND TRAILER EXCISE TAX

ELIMINATION ACT OF 1998

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     This act would eliminate motor vehicle excise tax exemptions and, in their place, impose

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an excise tax in a flat amount of six hundred dollars ($600) for motor vehicles that are less than

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three (3) years old and three hundred sixty dollars ($360) for motor vehicles that are more than

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three (3) years old.

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     This act would take effect on January 1, 2014.

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LC00434

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