2014 -- H 7289

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LC003882

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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 - PROPERTY TAX RELIEF

     

     Introduced By: Representative K. JosephShekarchi

     Date Introduced: January 30, 2014

     Referred To: House Finance

     (by request)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-33-3 of the General Laws in Chapter 44-33 entitled "Property

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Tax Relief" is hereby amended to read as follows:

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     44-33-3. Definitions. -- As used in this chapter:

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      (1) "Claimant" means a homeowner or renter, who has filed a claim under this chapter

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and was domiciled in this state for the entire calendar year for which he or she files a claim for

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relief under this chapter. In the case of claim for rent constituting property taxes accrued, the

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claimant shall have rented property during the preceding year for which he or she files for relief

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under this chapter. Claimant shall not mean or include any person claimed as a dependent by any

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taxpayer under the Internal Revenue Code of the United States, 26 U.S.C. section 1 et seq. When

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two (2) individuals of a household are able to meet the qualifications for a claimant, they may

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determine between themselves as to who the claimant is. If they are unable to agree, the matter is

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referred to the tax administrator and his or her decision is final. If a homestead is occupied by two

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(2) or more individuals, and more than one individual is able to qualify as a claimant, and some or

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all of the qualified individuals are not related, the individuals may determine among themselves

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as to who the claimant is. If they are unable to agree, the matter is referred to the tax

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administrator, and his or her decision is final.

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      (2) "Disabled" means those persons who are receiving a social security disability benefit.

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      (3) "Gross rent" means rental paid in cash or its equivalent solely for the right of

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occupancy of a homestead, exclusive of charges for any utilities, services, furniture, furnishings,

 

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or personal property appliances furnished by the landlord as a part of the rental agreement. If the

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landlord and tenant have not dealt with each other at arm's length, and the tax administrator is

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satisfied that the gross rent charged was excessive, he or she may adjust the gross rent to a

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reasonable amount for purposes of this chapter. "Gross rent" includes the rental of space paid to a

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landlord for parking of a mobile home, or docking or mooring a houseboat, exclusive of any

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charges for utilities, services, furniture, furnishings, or personal appliances furnished by the

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landlord as a part of the rental. Twenty percent (20%) of the annual gross rental plus the space

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rental fees paid during the year are the annual "property taxes accrued."

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      (4) "Homestead" means the dwelling, whether owned or rented, and so much of the land

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surrounding it, not exceeding one acre, as is reasonably necessary for use of the dwelling as a

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home, and may consist of a part of the multi-dwelling or multi-purpose building and a part of the

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land upon which it is built ("owned" includes a vendee in possession under a land contract and

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one or more joint tenants or tenants in common). It does not include personal property such as

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furniture, furnishings, or appliances, but a mobile home or a houseboat may be a homestead.

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      (5) "Household" means one or more persons occupying a dwelling unit and living as a

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single nonprofit housekeeping unit. "Household" shall not include bona fide lessees, tenants, or

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roomers, and boarders on contract.

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      (6) "Household income" means all income received by all persons of a household in a

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calendar year while members of the household.

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      (7) "Income" means the sum of federal adjusted gross income as defined in the Internal

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Revenue Code of the United States, 26 U.S.C. section 1 et seq., and all non-taxable income

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including, but not limited to, the amount of capital gains excluded from adjusted gross income,

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alimony, support money, non-taxable strike benefits, cash public assistance and relief (not

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including relief granted under this chapter), the gross net amount of any pension or annuity

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(including Railroad Retirement Act (see 45 U.S.C. section 231 et seq.) benefits, all payments

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received under the federal Social Security Act, 42 U.S.C. section 301 et seq., state unemployment

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insurance laws, and veterans' disability pensions (see 38 U.S.C. section 301 et seq.), non-taxable

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interest received from the federal government or any of its instrumentalities, workers'

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compensation, and the gross amount of "loss of time" insurance. It shall not include gifts from

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nongovernmental sources, or surplus foods or other relief in kind supplied by a public or private

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agency. For the purpose of this chapter, the calculation of "income" shall not include any

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deductions for rental losses, business losses, capital losses, exclusion for foreign income, and any

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losses received from pass-through entities.

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      (8) "Property taxes accrued" means property taxes (exclusive of special assessments,

 

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delinquent interest, and charges for service) levied on a claimant's homestead in this state in 1977

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or any calendar year thereafter. If a homestead is owned by two (2) or more persons or entities as

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joint tenants or tenants in common, and one or more persons or entities are not a member of

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claimant's household, "property taxes accrued" is that part of property taxes levied on the

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homestead which reflects the ownership percentage of the claimant and his or her household. For

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purposes of this subdivision, property taxes are "levied" when the tax roll is certified by the city

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or town assessor. When a homestead is sold during the calendar year of the levy, the "property

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taxes accrued" for the seller and buyer is the amount of the tax levy prorated to each in the

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closing agreement pertaining to the sale of the homestead or, if not provided for in the closing

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agreement, the tax levy is prorated between seller and buyer based upon the delivery date of the

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deed of conveyance. When a household owns and occupies two (2) or more homesteads in the

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same calendar year, "property taxes accrued" is the sum of the prorated taxes attributable to the

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household for each of the homesteads. If the household owns and occupies the homestead for the

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part of the calendar year and rents a household for part of the calendar year, it may include both

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the proration of taxes on the homestead owned and "rent constituting property taxes accrued"

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with respect to the months the homestead is rented, in computing the amount of the claim. All

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prorations are made on the basis of the gross tax levy after all exemptions. If a homestead is an

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integral part of a larger unit such as a farm, or a multi-purpose or multi-dwelling building,

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property taxes accrued is that percentage of the total property taxes accrued as the value of the

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homestead is of the total value. For the purposes of this subdivision, "unit" refers to the parcel of

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property covered by a single tax statement of which the homestead is a part.

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      (9) "Rent constituting property taxes accrued" means twenty percent (20%) of the gross

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rent actually paid in cash or its equivalent in any calendar year by a claimant and his or her

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household solely for the right of occupancy of their Rhode Island homestead in the calendar year,

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and which rent constitutes the basis, in the succeeding calendar year, of a claim for relief under

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this chapter by the claimant, but shall not include any part of the rent paid for occupancy of

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premises which are legally exempt from the payment of property taxes.

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     SECTION 2. This act shall take effect upon passage and shall apply retroactively.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PROPERTY TAX RELIEF

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     This act would exempt the amount of any original contributions to a pension or annuity

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(including Railroad Retirement Act (see 45 U.S.C. 231 et seq.) benefits from income for the

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purpose of determining eligibility for property tax relief.

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     This act would take effect upon passage and would apply retroactively.

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