2019 -- S 0823

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LC002451

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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 - LEVY AND ASSESSMENT OF LOCAL TAXES

     

     Introduced By: Senators Raptakis, and Valverde

     Date Introduced: April 30, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-5-11.8 of the General Laws in Chapter 44-5 entitled "Levy and

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Assessment of Local Taxes" is hereby amended to read as follows:

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     44-5-11.8. Tax classification.

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     (a) Upon the completion of any comprehensive revaluation or any update, in accordance

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with § 44-5-11.6, any city or town may adopt a tax classification plan, by ordinance, with the

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following limitations:

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     (1) The designated classes of property shall be limited to the classes as defined in

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subsection (b) of this section.

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     (2) The effective tax rate applicable to any class, excluding class 4, shall not exceed by

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fifty percent (50%) the rate applicable to any other class, except in the city of Providence and the

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town of Glocester and the town of East Greenwich; however, in the year following a revaluation

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or statistical revaluation or update, the city or town council of any municipality may, by

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ordinance, adopt tax rates for the property class for all ratable tangible personal property no

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greater than twice the rate applicable to any other class, provided that the municipality documents

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to, and receives written approval from, the office of municipal affairs that the rate difference is

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necessary to ensure that the estimated tax levy on the property class for all ratable tangible

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personal property is not reduced from the prior year as a result of the revaluation or statistical

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revaluation.

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     (3) Any tax rate changes from one year to the next shall be applied such that the same

 

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percentage rate change is applicable to all classes, excluding class 4, except in the city of

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Providence and the town of Glocester.

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     (4) Notwithstanding subdivisions (2) and (3) of this subsection, the tax rates applicable to

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wholesale and retail inventory within Class 3 as defined in subsection (b) of this section are

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governed by § 44-3-29.1.

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     (5) The tax rates applicable to motor vehicles within Class 4, as defined in subsection (b)

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of this section, are governed by § 44-34.1-1.

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     (6) The provisions of chapter 35 of this title relating to property tax and fiscal disclosure

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apply to the reporting of, and compliance with, these classification restrictions.

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     (b) Classes of Property.

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     (1) Class 1: Residential real estate consisting of no more than five (5) dwelling units; land

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classified as open space; and dwellings on leased land including mobile homes. In the city of

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Providence, this class may also include residential properties containing partial commercial or

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business uses and residential real estate of more than five (5) dwelling units.

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     (i) A homestead exemption provision is also authorized within this class; provided

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however, that the actual, effective rate applicable to property qualifying for this exemption shall

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be construed as the standard rate for this class against which the maximum rate applicable to

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another class shall be determined, except in the town of Glocester.

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     (ii) In lieu of a homestead exemption, any city or town may divide this class into non-

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owner and owner-occupied property and adopt separate tax rates in compliance with the within

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tax rate restrictions.

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     (2) Class 2: Commercial and industrial real estate; residential properties containing

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partial commercial or business uses; and residential real estate of more than five (5) dwelling

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units. In the city of Providence, properties containing partial commercial or business uses and

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residential real estate of more than five (5) dwelling units may be included in Class 1.

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     (3) Class 3: All ratable, tangible personal property.

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     (4) Class 4: Motor vehicles and trailers subject to the excise tax created by chapter 34 of

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this title.

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     (c) The city council of the city of Providence and the town council of the town of

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Glocester and the town council of the town of East Greenwich may, by ordinance, provide for,

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and adopt, a tax rate on various classes as they shall deem appropriate. Provided, that the tax rate

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for Class 2 shall not be more than two (2) times the tax rate of Class 1; the tax rate applicable to

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Class 3 shall not exceed the tax rate of Class 1 by more than two hundred percent (200%).

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Glocester shall be able to establish homestead exemptions up to fifty percent (50%) of value and

 

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the calculation provided in subsection (b)(1)(i) shall not be used in setting the differential tax

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rates.

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     (d) Notwithstanding the provisions of subsection (a) of this section, the town council of

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the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in

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accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes

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assessed on or after the assessment date of December 31, 2002.

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     (e) Notwithstanding the provisions of subsection (a) of this section, the town council of

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the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in

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accordance with the provisions of subsections (a) and (b) of this section and the provisions of §

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44-5-79, to be applicable to taxes assessed on or after the assessment date of December 31, 2004.

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     (f) Notwithstanding the provisions of subsection (a) of this section, the town council of

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the town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent

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(50%) of value to one hundred percent (100%) of value on residential and

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commercial/industrial/mixed-use property, while tangible property is assessed at one hundred

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percent (100%) of cost, less depreciation; provided, however, the tax rate for Class 3 (tangible)

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property shall not exceed the tax rate for Class 1 (residential) property by more than two hundred

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thirteen percent (213%). This provision shall apply whether or not the fiscal year is also a

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revaluation year.

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     (g) Notwithstanding the provisions of subsections (a) and (b) of this section, the town

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council of the town of Coventry may hereafter, by ordinance, adopt a tax classification plan

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providing that Class 1, as set forth in subsection (b) "Classes of Property" of this section, may

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also include residential properties containing commercial or business uses, such ordinance to be

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applicable to taxes assessed on or after the assessment date of December 31, 2014.

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     (h) Notwithstanding the provisions of subsection (a) of this section, the town council of

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the town of East Greenwich may hereafter, by ordinance, adopt a tax classification plan in

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accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes

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assessed on or after the assessment date of December 31, 2018. Further, the East Greenwich town

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council may adopt, repeal, or modify said tax classification plan for any tax year thereafter,

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notwithstanding the provisions of subsection (a) of this section.

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     SECTION 2. Section 44-3-65 of the General Laws in Chapter 44-3 entitled "Property

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Subject to Taxation" is hereby amended to read as follows:

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     44-3-65. Narragansett -- Tangible business property tax exemption. Narragansett

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and East Greenwich -- Tangible business property tax exemption.

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     The town of Narragansett and the town of East Greenwich may by ordinance create a

 

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tangible business property tax exemption for local small business owners in an amount not to

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exceed thirty-five thousand dollars ($35,000).

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     SECTION 3. 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 allow the town of East Greenwich to adopt a flexible tiered tax

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classification system regardless of whether it is a revaluation or update year and also to provide

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an exemption to small businesses for tangible personal property taxes.

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     This act would take effect upon passage.

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