2017 -- S 0126

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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 TAX ELIMINATION

     Introduced By: Senators Crowley, Quezada, and Metts

     Date Introduced: February 01, 2017

     Referred To: Senate 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 Exempt from value Local Exemption State fiscal year 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 § 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 2018, the exemption shall be two thousand dollars

($2,000) for residents of distressed communities as defined in §45-13-12. In fiscal year 2019, the

exemption for distressed communities shall increase to four thousand dollars ($4,000) and in

fiscal year 2020 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

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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 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 upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- MOTOR VEHICLE TAX ELIMINATION

***

     This act would provide an exemption to the motor vehicle excise tax for residents of

distressed communities of two thousand dollars ($2,000) in 2018, four thousand dollars ($4,000)

in 2019, and six thousand dollars ($6,000) beginning in fiscal year 2020 and each year thereafter.

     This act would take effect upon passage.

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