2017 -- H 5171

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LC000484

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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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 O'Brien, Corvese, McEntee, Lima, and Marshall

     Date Introduced: January 19, 2017

     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 § 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 § 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 (l.22%) of net terminal income derived from video lottery games pursuant to the

provisions of § 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, 2012, 2013, 2004, 2015, 2016 and thereafter 2017, the exemption

shall be five hundred dollars ($500).

     for fiscal year 2018 and thereafter, the exemption shall be six thousand dollars ($6,000).

     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 § 44-34-

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

LC000484 - Page 2 of 4

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" means the motor vehicle values as determined in

accordance with § 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 § 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 December 31, 2017.

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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

***

     This act would increase the exemption for the motor vehicle excise tax from five hundred

dollars ($500) to six thousand dollars ($6,000) commencing on fiscal year 2018.

     This act would take effect December 31, 2017.

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