2014 -- H 7287

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LC003794

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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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 30, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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

     44-34.1-1. Excise tax phase-out. -- (a) (1) 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 may be phased out. The phase-out shall apply to all motor vehicles

and trailers, including leased vehicles. (2) 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 annually rebate 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 shall be assessed a value by the vehicle value commission. That value

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

terms as defined in subsection (d) of this section; 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 shall commence with the excise tax bills mailed to taxpayers for the

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

appropriation by the general assembly. 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:

Local Fiscal Year State fiscal year

Exempt from value Local Exemption Reimbursement

fiscal year 1999 0 $1,500

fiscal year 2000 $1,500 $2,500

fiscal year 2001 $2,500 $3,500

fiscal year 2002 $3,500 $4,500

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

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

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

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

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

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

percent (1.22%) of net terminal income derived from video lottery games pursuant to the

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

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

dollars ($500); provided, however, that for fiscal year 2015 and thereafter, the exemption shall be

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

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

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

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

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

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

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

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

fiscal year 1999 levels 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. Provided, however, for fiscal year 2011 and thereafter, the rates and ratios of assessment

may be less than but not more than the rates described in this subsection (4). (d) Definitions. (1)

"Maximum taxable value" means the value of vehicles as prescribed by section 44-34-11 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

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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" means the motor vehicle values as determined in

accordance with section 44-34-11 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). (e) If any provision of this chapter shall be held invalid by any court of competent

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

be effected thereby.

     SECTION 2. This act shall take effect upon passage.

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LC003794

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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

excise tax for residents of distressed communities.

     This act would take effect upon passage.

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