2018 -- H 7489

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LC004188

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Representatives Giarrusso, Roberts, Filippi, Quattrocchi, and Nardolillo

     Date Introduced: February 07, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 44-5 of the General Laws entitled "Levy and Assessment of Local

Taxes" is hereby amended by adding thereto the following section:

     44-5-12.2. Tangible personal property tax phase out.

     (a) Beginning July 1, 2019, the city council or town council of any municipality shall, by

ordinance, phase out, over a ten (10) year period, the personal property tax. The rate schedule to

be implemented by the cities and towns is established in this section.

     (b) "Personal property", for the purposes of taxation, means all goods, chattels, and

effects, wherever they may be, all ships or vessels, at home or abroad, except those that are

exempt from taxation by the laws of the United States or of this state and shall have the same

meaning as defined in § 44-3-2.

     (c) The rate schedule for the ten (10) year phase out of the personal property tax is as

follows:

     Year Maximum Tax Rate

     FY 2019 set by local officials

     FY 2020 ninety percent (90%) of FY 2019 rate

     FY 2021 eighty percent (80%) of FY 2019 rate

     FY 2022 seventy percent (70%) of FY 2019 rate

     FY 2023 sixty percent (60%) of FY 2019 rate

     FY 2024 fifty percent (50%) of FY 2019 rate

     FY 2025 forty percent (40%) of FY 2019 rate

     FY 2026 thirty percent (30%) of FY 2019 rate

     FY 2027 twenty percent (20%) of FY 2019 rate

     FY 2028 ten percent (10%) of FY 2019 rate

     FY 2029 no tax authorized.

     44-5-12.3. City and town and fire district reimbursement.

     (a) In fiscal years 2019 and thereafter, cities and towns and fire districts shall receive

reimbursements, as set forth in this section, from state general revenues equal to the amount of

lost tax revenue due to the phase out or reduction of the tangible personal property tax. Cities and

towns and fire districts shall receive advance reimbursements through state fiscal year 2021. In

the event the tax is phased out, cities and towns and fire districts shall receive a permanent

distribution of sales tax revenue pursuant to § 44-18-18 in an amount equal to any lost revenue

resulting from the tangible personal property tax elimination. Lost revenues must be determined

using a base tax rate fixed at fiscal year 2018 levels for each city, town, and fire district.

     (b)(1) The director of administration shall determine the amount of general revenues to

be distributed to each city and town and fire district for the fiscal years 2019 and thereafter so that

every city and town and fire district is held harmless from tax loss resulting from this chapter,

assuming that tax rates are indexed to inflation through fiscal year 2028.

     (2) The director of administration shall index the tax rates for inflation by applying the

annual change in the December Consumer Price Index – All Urban Consumers (CPI-U),

published by the Bureau of Labor Statistics of the United States Department of Labor, to the

indexed tax rate used for the prior fiscal year calculation.

     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 - LEVY AND ASSESSMENT OF LOCAL TAXES

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     This act would provide a ten (10) year phase out to the personal property tax.

     This act would take effect upon passage.

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LC004188

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