2023 -- H 6333

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LC002832

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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 -- STATEWIDE TANGIBLE PROPERTY TAX EXEMPTION

     

     Introduced By: Representatives Voas, Solomon, O'Brien, Potter, Kazarian, Alzate,
Casimiro, Casey, Baginski, and Slater

     Date Introduced: April 26, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

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adding thereto the following chapter:

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CHAPTER 5.3

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STATEWIDE TANGIBLE PROPERTY TAX EXEMPTION

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     44-5.3-1. Municipal tangible property tax exemption.

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     (a) Notwithstanding the provisions of chapter 5 of this title or any other provisions of law

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to the contrary, in an effort to provide relief for businesses, including small businesses, and to

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promote economic development, all ratable, tangible personal property not otherwise exempt from

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taxation shall be exempt from taxation up to and including one hundred thousand dollars ($100,000)

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for the property tax year ending on December 31, 2024.

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     (b) Individual personal exemptions granted to tangible property taxpayers in any city, town,

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or fire district at the time of the effective date of this chapter shall be applied to assessed values

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prior to applying the statewide exemption provided in this section in order that any lost revenue to

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be reimbursed pursuant to this section for each respective city, town, or fire district shall not include

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revenue loss resulting from these individual personal exemptions.

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     (c) Exemptions existing and uniformly applied to all tangible property taxpayers in any

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city, town, or fire district at the time of the effective date of this chapter shall be disregarded in

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order that any lost revenue to be reimbursed pursuant to this section for each respective city, town,

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or fire district shall include revenue loss resulting from such pre-existing uniform exemptions.

 

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     44-5.3-2. Reimbursement of lost tax revenue.

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     (a) Beginning in fiscal year 2024-2025 and for each fiscal year thereafter, cities, towns,

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and fire districts shall receive reimbursements, as set forth in this section, from state general

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revenues for lost tax revenues due to the reduction of the tangible property tax resulting from the

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statewide exemption set forth in § 44-5.3-1.

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     (b) Beginning in calendar year 2023, on or before August 15 of each year, each city, town,

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and fire district shall report to the department of revenue, as part of the submission of the certified

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tax levy pursuant to § 44-5-22, tangible property levy information sufficient to calculate

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reimbursements as set forth in this section, for the most recent tax roll based on assessed values as

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of December 31 of the previous year.

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     (c) Reimbursements for cities, towns, and fire districts for each fiscal year shall be based

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on tangible property levy information for the prior fiscal year submitted pursuant to this section.

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Reimbursements shall be distributed in full to cities, towns, and fire districts no later than

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September 30 of the respective fiscal year to which the reimbursement applies.

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     44-5.3-3. Establishment of reimbursement fund.

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     There is hereby established a restricted receipt account within the general fund of the state,

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to be known as the statewide tangible property tax exemption reimbursement fund. Funds from this

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account shall be administered by the director of the department of revenue and shall be for the sole

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purpose of reimbursing cities, towns, and fire districts pursuant to this chapter.

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     44-5.3-4. Tangible property tax rate cap.

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     (a) Notwithstanding any other provision of law to the contrary, the tax rate for the class of

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property that includes tangible personal property for any city, town, or fire district shall be capped

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and shall not exceed thereafter the tax rate in effect for the property tax year ending on December

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31, 2022.

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     (b) The tax rate limitation set forth in this section shall not apply to any city, town, or fire

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district that utilizes a uniform tax rate for all classes of property, exclusive of class 4 property

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(motor vehicles and trailers).

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     44-5.3-5. Removal of certain limitations and requirements.

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     Beginning in fiscal year 2024-2025, tangible tax rates shall be disregarded for purposes of

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compliance with limitations on the extent to which the effective tax rate of one class of property

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may exceed that of another, or requirements that the same percentage rate change be applied across

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property classes from one year to the next, under § 44-5-11.8 or any other similar statutory

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provision applicable to a city, town, or fire district.

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     44-5.3-6. Application.

 

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     The statewide exemption set forth in this chapter shall not apply to:

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     (1) Public service corporation tangible property subject to taxation pursuant to § 44-13-1;

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and

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     (2) Renewable energy resources and associated equipment subject to taxation pursuant to

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§ 44-5-3(c).

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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 -- STATEWIDE TANGIBLE PROPERTY TAX EXEMPTION

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     This act would create a tax exemption of one hundred thousand dollars ($100,000) relating

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to assessment of municipal tangible property commencing with the December 31, 2024 tax

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assessment for taxes payable in calendar year 2025. The act would also provide for reimbursement

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of the tax revenue lost by the municipalities and establish a tangible property tax rate cap.

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     This act would take effect upon passage.

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