UPDATED: Every Which Way They Can Stick It to You Slyly

So, yeah, the General Assembly has managed to keep its hands pretty clean when it comes to raising taxes, but Rhode Islanders shouldn’t expect to have more money in their pockets — at least not unless they get involved in local government right now. As we’ve seen, in Tiverton, the state bureaucracy is willing to be complicit in complete flouting of the law and regulations when it comes to local officials’ desire to tax residents more.
Now, as Marc mentioned, yesterday, the General Assembly has removed almost all of the exemption that prevents towns from taxing the first $6,000 of your car’s value, enabling town governments to increase taxes almost passively. In Tiverton, that means another $105.27 per year on cars valued over that amount.
But here’s an interesting edit of the legislation, on the General Assembly’s part:

The excise tax rates and ratios of assessment shall be maintained at a level identical to the level in effect for fiscal year 1998 for each city, town, and fire district; provided, in the town of Johnston the excise tax rate and ratios of assessment shall be maintained at a level identical to the level in effect for fiscal year 1999 levels and in no event shall the final taxable value of a vehicle be higher than assessed in the prior fiscal year, and the levy of a city, town, or fire district shall be limited to the lesser of the maximum taxable value or net assessed value for purposes of collecting the tax in any given year.

Inasmuch as there’s no language restricting increased assessments to classics, it would appear that a town now has the ability to decide that your car is worth more than it was last year. Presumably if the mileage goes down or you remodel its kitchen.
ADDENDUM:
In the comments, John offers the explanation:

The language was changed because the taxable value of most cars will necessarily increase due to the lowering of the exemption. My $15,000 car would have a $9,000 taxable value with a $6,000 exemption. When the exemption drops to $500, the taxable value is increased to $14,500. Therefore, if the locals are to tax the vehicle at the higher “taxable value”, the law needed to be amended.

0 0 votes
Article Rating
Subscribe
Notify of
guest
5 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
David Robert - Tiverton Tax Assessor
David Robert - Tiverton Tax Assessor
11 years ago

Justin: Classics, or cars 25 years and older are assessed at a flat value of $500 and cannot be increased per RIGL. Also, per RIGL, vehicles are priced according to NADA. The Town has no hand in vehicle valuations. Finally, its extremely rare that a vehicle would appreciate in value.
Also, any additional revenue from MV taxation would be offset by a decrease in the real estate tax rate (I assume most towns would do this), and they are still held to 3050.

Justin Katz
11 years ago

David,
Thanks for the clarification. What do you suppose the purpose of the language change might have been?
Regarding offsetting real estate taxation with motor vehicle taxation, I assume you mean that that would happen in subsequent budget cycles. Real estate owners in Tiverton aren’t going to see their taxes go down, at this point, just because the Town Council decides to charge more for cars. Indeed, a resolution that would have accomplished that was voted down at the FTM.
As for 3050, I’ll just say that the recent budget process in our town has left me unimpressed with the strength and honest implementation of that statute.

David Robert
David Robert
11 years ago

Justin: Part of the reason for the language change (this is an assumption) is that vehicles, such as SUVs, have had a depressed market value due to the increase in fuel cost. Now that there has been some decrease in gasoline since the high of $4+, book value on SUVs have come back. There is a matter of equity of someone paying NADA value on say, a Volvo for the past few years where the increase in fuel didn’t effect the book value as compared to the larger SUVs. Now the values are more or less in line in realation to each other based on MRSP plus depreciation, plus market forces.
As far Tiverton is concerned, my stance is this. After the FTM, the projected tax rate was $15.40. Since we now can tax MVs at full book value minus $500, the projected RE/TPP tax rate should be lower to offset the increase in MV taxes levied. Therefore, the property owner will pay less in RE tax, but they will be paying more on their car tax. It will be about a wash. But in no case will the taxes levied be higher than the levy voted on at the FTM. So, no net gain to the Town because of this change.
Finally, as far as 3050 is concerned, we have exchanged emails on this and we’ll just have to respectfully disagree on the process. Believe me, if I felt for a second there was some shenanigans going on, I would speak out against them. My first duty is to the residents of Tiverton to ensure fair taxation, not to partake in any action that would harm them.

John
John
11 years ago

Justin:
The language was changed because the taxable value of most cars will necessarily increase due to the lowering of the exemption. My $15,000 car would have a $9,000 taxable value with a $6,000 exemption. When the exemption drops to $500, the taxable value is increased to $14,500. Therefore, if the locals are to tax the vehicle at the higher “taxable value”, the law needed to be amended.

David Robert
David Robert
11 years ago

Johns comments are dead on, but it is interesting that the reason offered during the House Vote were reflected in my comment above. However, John is corrrect in his reasoning.
It will be interesting to see if the GA amends this section yet again. When the phase-out was first introduced years ago, many Assessors felt that this program would never be funded to total elimination of the vehicle tax. Over the years, this program has hurt the municipalities because the state never fully reimbursed them for dollars lost.

Show your support for Anchor Rising with a 25-cent-per-day subscription.