2019 -- H 5221

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LC000173

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TAXATION

     

     Introduced By: Representatives Casey, Morin, Vella-Wilkinson, Azzinaro, and
Solomon

     Date Introduced: January 30, 2019

     Referred To: House Finance

     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.

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     As used in this chapter:

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     (1) "Claimant" means a homeowner or renter, sixty-five (65) years of age or older, and/or

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disabled, who has filed a claim under this chapter and was domiciled in this state for the entire

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calendar year for which he or she files a claim for relief under this chapter. In the case of claim

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for rent constituting property taxes accrued, the claimant shall have rented property during the

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preceding year for which he or she files for relief under this chapter. Claimant shall not mean or

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include any person claimed as a dependent by any taxpayer under the Internal Revenue Code of

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the United States, 26 U.S.C. § 1 et seq. When two (2) individuals of a household are able to meet

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the qualifications for a claimant, they may determine between themselves as to who the claimant

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is. If they are unable to agree, the matter is referred to the tax administrator and his or her

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decision is final. If a homestead is occupied by two (2) or more individuals, and more than one

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individual is able to qualify as a claimant, and some or all of the qualified individuals are not

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related, the individuals may determine among themselves as to who the claimant is. If they are

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unable to agree, the matter is referred to the tax 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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or veterans' affairs disability benefits paid by the federal government.

 

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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. § 1 et seq., and all non-taxable income including,

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

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

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granted under this chapter), the gross amount of any pension or annuity (including Railroad

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Retirement Act (see 45 U.S.C. § 231 et seq.) benefits, all payments received under the federal

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Social Security Act, 42 U.S.C. § 301 et seq., state unemployment insurance laws, and veterans'

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disability pensions (see 38 U.S.C. § 301 et seq.), non-taxable interest received from the federal

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government or any of its instrumentalities, workers' compensation, and the gross amount of "loss

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of time" insurance. It shall not include gifts from nongovernmental sources, or surplus foods or

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other relief in kind supplied by a public or private agency. For the purpose of this chapter, the

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calculation of "income" shall not include any deductions for rental losses, business losses, capital

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losses, exclusion for foreign income, and any 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 be retroactive to January 1,

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2018.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION

***

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     This act would define as "disabled," persons receiving veterans' affairs disability benefits

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paid by the federal government for purposes of property tax relief.

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     This act would take effect upon passage and would be retroactive to January 1, 2018.

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