2023 -- H 5448

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LC001332

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

     

     Introduced By: Representative Tina L. Spears

     Date Introduced: February 08, 2023

     Referred To: House Municipal Government & Housing

     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 or

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

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adopt tax rates for the property class for all ratable tangible personal property no greater than twice

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the rate applicable to any other class, provided that the municipality documents to, and receives

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written approval from, the office of municipal affairs that the rate difference is necessary to ensure

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that the estimated tax levy on the property class for all ratable tangible personal property is not

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reduced from the prior year as a result of the revaluation or statistical 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 and the town of East Greenwich.

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     (4) Notwithstanding subsections (a)(2) and (a)(3) of this section, 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 be

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

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class shall be determined, except in the town of Glocester and the city of Providence.

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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 tax

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rate restrictions.

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

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commercial or business uses; and residential real estate of more than five (5) dwelling units. In the

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city of Providence, properties containing partial commercial or business uses and residential real

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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 Glocester

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

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tax rate on various classes as they shall deem appropriate. Provided, that the tax rate for Class 2

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shall not be more than two (2) times the tax rate of Class 1 and the tax rate applicable to Class 3

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

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

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

 

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

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

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the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or

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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 the

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

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with the provisions of subsections (a) and (b) of this section and the provisions of § 44-5-79, to be

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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 the

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town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent (50%)

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of value to one hundred percent (100%) of value on residential and commercial/industrial/mixed-

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use property, while tangible property is assessed at one hundred percent (100%) of cost, less

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depreciation; provided, however, the tax rate for Class 3 (tangible) property shall not exceed the

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tax rate for Class 1 (residential) property by more than two hundred thirteen percent (213%). This

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provision shall apply whether or not the fiscal year is also a 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 also

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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 the

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

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

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or after the assessment date of December 31, 2018. Further, the East Greenwich town council may

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adopt, repeal, or modify that tax classification plan for any tax year thereafter, notwithstanding the

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provisions of subsection (a) of this section.

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

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

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the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or

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after the assessment date of December 31, 2022.

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

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town of New Shoreham may hereafter, by ordinance, adopt a tax classification plan in accordance

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

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or after the assessment date of December 31, 2023.

 

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     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 allow the town council of New Shoreham to adopt a tax classification plan

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in accordance with the provisions of this section, to be applicable to taxes on or after the assessment

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date of December 31, 2023.

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     This act would take effect upon passage.

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