Can the Motor Vehicle
Excise Tax be Fixed?
Values, Exemptions and Tax Rates
1
Introduction
• The motor vehicle excise tax or “car tax” has been controversial here and in
other states. My introductory session will focus on:
1. The valuation method and whether vehicles are being fairly valued.
2. Why different exemptions per vehicle apply in different communities.
3. Why different tax rates apply across the state.
• I will also talk about the nature of some solutions that may be available to
us.
2
Other Speakers
• Linda Cweick, the tax assessor in North Kingstown and chair of the RI
Vehicle Value Commission will talk about technical difficulties in adopting a
revised valuation method and the appeal process.
• Councilman Sam Zurier and analyst Nick Freeman of Providence will
complete the presentation by presenting their analysis which associates the
cost of maintaining municipal roadways with the tax levy on vehicles.
3
State Law on Values
• RI Vehicle Value Commission Values Cars Each Year Pursuant to 44-34-11 as
Follows:
•
“The average retail price of similar vehicles of the same make, model, type, and year of
manufacture as reported by motor vehicle dealers or by official used car guides, such
as that of the National Automobile Dealers Association for New England.”
4
Are Cars Being Fairly Valued?
• There is general agreement that reliance on “retail price” generates values
that are higher than what the owner of the car would receive in an arms
length transaction.
• Proposed legislation would change basis to “average trade in value”.
• Change would result in:
•
Loss of $40 to $50 million in tax revenue (unless tax rates were allowed to float).
OR
•
A transfer of the tax levy to real estate and tangible property of an equivalent amount.
• Solving the “car tax” problem creates another problem.
See Table 1
5
Why Do Different Exemptions Apply in
Different Communities?
• In the late 90s, the state initiated a phase out of the car tax by reimbursing
communities for a state specified exemption from taxation for each vehicle.
• By 2007, the Exemption had been increased to $6,000 and cities and towns
were receiving over $136 million for the value of the exemption.
• The economy collapsed and the guaranteed exemption was reduced to $500
and reimbursements statewide to $10,000,000.
• Communities were given the opportunity to offer a higher exemption. Some
did.
• Low exemptions now highlighted reliance on retail price in generating
values.
See Table 2
6
Why Are Motor Vehicle Tax Rates So High in
Some Communities?
• Before the 3 year cycle of revaluations, communities often went over 10
years between revaluations.
• Tax rates typically dropped significantly after a revaluation.
• In the absence of authorization to apply higher rates on cars, more of the tax
would have been transferred to real estate.
• Many cities went to the legislature to preserve the car tax (and tangible) tax
rate after a revaluation to preserve this revenue stream.
• The urban core cities initiated this strategy but others followed.
See Table 3, 4, and 5
7
What Are the Solutions?
Value
Exemption
Rate
• Eliminated at
fixed % of
value
• New problems
with trade in
• Value problem
reduced if
exemption is
increased
• # of tax bills
reduced
• Mass. is model
• Phased
reduction over
time
8
Value
• Value problem is reduced or eliminated if vehicles are valued at a fixed
percentage of NADA retail value (for example 90%). Connecticut currently
uses 70%.
• Using trade in value creates new problems (next speaker).
9
Exemption
• Value problem is reduced if exemption is increased. A number of
communities have increased their exemption for this reason.
• Number of tax bills is also reduced if exemption is increased.
10
Rate
• Massachusetts is the model. $25 rate applies throughout the state (used to
be $60 before Proposition 2 ½).
• Phased reduction over a number of years (10?) a possibility here with a
statutory maximum ($30, $40, $50 ?)
• Increase for low MV tax communities should also be considered. This would
not be an overall tax increase because real estate taxes would be reduced.
11
Why Do We Care?
• We want a solution that works. The next speaker will discuss the problems
with alternative vehicle valuation methods and administrative difficulties
with an expanded appeal process.
• There will always be disputes about the equity of a tax. In this case, there is
general agreement that values are overstated. There is also the question of
why cars are taxed more than real estate? As the last table shows, the tax
levy on cars statewide as a percentage of value is almost twice as great as
the levy on residential real estate.
12
Other Thoughts
• Our last presenters raise a whole new question. Should our tax on cars be
exclusively based on value? As they will point out, municipal costs
associated with cars on the road are unrelated to the value of the car.
• If the state (the Governor and General Assembly) is determined to address
all or part of the inequities in the existing motor vehicle tax structure, which
we all admit, then it is the League’s position that the state should also be a
financial participant in the solution.
See Table 6
13
Values and Appeals
Motor Vehicles
Values
• Retail Value information from NADA is comprehensive
• Trade in value information is not complete
• Research needed to determine whether trade in information can be used to
set motor vehicle values
Appeals (1)
RIGL 44-34-11
Rhode Island Vehicle Value Commission
• 7 Members
•
•
•
(1)
Director of Department of Revenue or Designee
(5) Tax Assessors
(1) Motor Vehicle Dealer
Appeals (2)
44-34-8
Appeal Procedures
•
•
•
•
•
Appeal must be filed within 45 days with local assessor
Appeal to Assessor – 10 days to answer
Appeal to Commission – 20 days to answer
Appeal of Decision – 30 days to District Court
Appeal of District Court – Supreme Court
Appeals (3)
History of Appeals
•
•
•
•
•
•
2009
110 appeals
2010
2,524 appeals
2011
1,128 appeals
2012
1,064 appeals
2013
618 appeals
2014
259 appeals
Table 1
Statewide Net Assessed Value by Class of Property
As assessed on December 31, 2012
Residential
Commercial/
Industrial
Tangible
Motor
Vehicles1
$2,602,253,661
2,428,986,756
984,132,592
317,406,535
2,205,606,445
2,667,327,877
4,697,766,731
2,765,966,871
1,768,453,953
2,209,914,822
668,543,855
454,035,905
777,359,390
750,177,691
2,056,470,870
1,408,198,874
1,265,818,594
1,808,773,468
1,851,444,520
4,083,974,215
1,489,191,080
3,937,750,442
2,811,414,695
1,685,384,620
1,011,407,716
2,320,912,316
2,818,124,592
6,085,956,609
679,040,812
487,135,440
1,697,977,729
3,546,934,884
1,652,187,976
891,257,571
5,660,919,031
488,851,432
1,452,078,501
4,952,377,160
1,052,001,517
$135,432,000
244,830,162
258,720,000
85,694,224
75,273,300
437,983,245
1,306,337,465
507,562,300
338,581,500
1,107,661,860
66,541,600
47,626,400
57,603,796
81,502,500
59,884,400
474,341,753
460,831,112
32,518,600
536,656,837
267,304,553
153,653,920
1,077,125,568
536,678,000
429,333,276
244,170,005
829,156,659
294,055,900
3,137,093,280
83,199,800
152,067,862
564,887,150
460,882,314
171,628,000
161,003,400
2,308,822,283
217,934,585
296,015,562
647,850,750
309,547,768
$41,082,756
42,306,000
71,771,887
15,268,077
20,347,141
61,396,945
282,744,969
120,843,355
62,828,890
237,416,870
21,404,540
8,348,910
17,881,680
20,358,200
11,231,871
120,788,450
145,244,242
9,785,154
90,354,796
41,353,346
3,924,681
119,405,658
131,664,660
58,951,663
113,306,820
111,151,640
58,437,083
749,808,130
19,115,290
21,671,938
96,920,330
103,647,736
40,453,396
31,062,206
525,385,537
37,573,982
116,566,370
113,754,910
71,367,818
$132,231,595
131,704,056
110,361,053
35,009,119
69,532,192
272,963,980
467,768,458
268,221,318
94,241,142
272,732,633
58,884,112
32,254,303
85,856,278
65,326,187
37,753,697
215,049,875
160,236,058
22,914,353
105,128,109
91,507,476
14,784,899
81,903,401
209,500,117
223,691,596
120,349,919
271,525,472
87,352,315
568,868,485
57,469,916
57,393,030
167,849,604
185,876,659
73,643,247
71,607,703
658,966,393
60,871,017
174,504,756
173,263,369
169,259,090
$2,911,000,012
2,847,826,974
1,424,985,532
453,377,955
2,370,759,078
3,439,672,047
6,754,617,623
3,662,593,844
2,264,105,485
3,827,726,185
815,374,107
542,265,518
938,701,144
917,364,578
2,165,340,838
2,218,378,952
2,032,130,006
1,873,991,575
2,583,584,262
4,484,139,590
1,661,554,580
5,216,185,069
3,689,257,472
2,397,361,155
1,489,234,461
3,532,746,087
3,257,969,890
10,541,726,504
838,825,818
718,268,270
2,527,634,813
4,297,341,593
1,937,912,619
1,154,930,880
9,154,093,244
805,231,016
2,039,165,190
5,887,246,189
1,602,176,194
Statewide Total $82,493,517,748
Percent of Total
74.13%
$18,657,993,689
16.77%
$3,966,927,927
3.56%
$6,158,356,982
5.53%
$111,276,796,349
100.00%
Municipality
Barrington
Bristol
Burrillville
Central Falls
Charlestown
Coventry
Cranston
Cumberland
East Greenwich
East Providence
Exeter
Foster
Glocester
Hopkinton
Jamestown
Johnston
Lincoln
Little Compton
Middletown
Narragansett
New Shoreham
Newport
North Kingstown
North Providence
North Smithfield
Pawtucket
Portsmouth
Providence
Richmond
Scituate
Smithfield
South Kingstown
Tiverton
Warren
Warwick
West Greenwich
West Warwick
Westerly
Woonsocket
Municipal
Total
Note, the above values are after any personal exemptions, i.e. elderly/veteran, elderly freeze and homestead exemptions. It is common
for municipalities which offer an elderly tax freeze to freeze both the assessment and tax rate upon the recipient becoming eligible for the
freeze. Therefore an accurate comparison of municipalities that offer these freezes can be extremely difficult.
(1) Excise
Table 2
RI Division of Municipal Finance
FY 2014 and FY 2015 Motor Vehicle Exemptions
Total Motor Vehicle Exemption (per MV) including mandatory $500 exemption
FY 2014
Municipalities
Barrington
Bristol
Burrillville
Central Falls
Charlestown
Coventry
Cranston
Cumberland
East Greenwich
East Providence (1)
Exeter
Foster
Glocester
Hopkinton
Jamestown
Johnston
Lincoln
Little Compton
Middletown
Narragansett
New Shoreham
Newport
North Kingstown
North Providence
North Smithfield
Pawtucket
Portsmouth
Providence
Richmond
Scituate (2)
Smithfield
South Kingstown
Tiverton
Warren
Warwick
West Greenwich
West Warwick
Westerly
Woonsocket
$
1,000
3,000
1,500
1,000
500
500
500
500
6,000
500
500
3,100
500
500
6,000
500
3,000
6,000
3,000
6,000
1,000
6,000
3,000
500
675
500
3,000
1,000
500
6,000
1,000
3,000
6,000
500
2,000
500
1,000
1,500
500
FY 2015*
$
1,500
3,000
1,250
1,250
500
500
500
500
6,000
500
500
2,000
500
500
6,000
500
3,000
6,000
3,000
6,000
1,000
6,000
3,000
500
675
500
3,000
1,000
500
6,000
2,000
3,000
6,000
500
2,000
500
1,000
1,500
500
(1) East Providence's fiscal year is Nov 1 to Oct 31.
(2) Scituate's fiscal year is April 1 to March 31.
* FY 2015 motor vehicle exemptions collected during the municipal disclosure process and verified
with the disclosure follow up survey.
Table 3
FY 2015 Rhode Island Tax Rates by Class of Property
Assessment Date December 31, 2013
Tax Roll Year 2014
MUNICIPALITY
NOTES
BARRINGTON
BRISTOL
2
BURRILLVILLE
RRE
COMM
PP
MV
$18.30
$18.30
$18.30
$42.00
13.06
13.06
13.06
17.35
18.88
18.88
18.88
40.00
27.26
39.48
73.11
48.65
CENTRAL FALLS
8
CHARLESTOWN
2
9.90
9.90
9.90
13.08
2, 7
20.40
24.58
20.40
18.75
22.84
34.26
34.26
42.44
2
17.08
17.08
29.53
19.87
23.26
23.26
23.26
22.88
1, 8
22.95
25.40
56.67
37.10
14.63
14.63
14.63
32.59
COVENTRY
CRANSTON
CUMBERLAND
EAST GREENWICH
EAST PROVIDENCE
EXETER
FOSTER
21.06
21.06
28.96
36.95
GLOCESTER
2
21.77
24.74
43.34
24.37
HOPKINTON
2
20.64
20.64
20.64
21.18
8.75
8.75
8.75
14.42
JAMESTOWN
JOHNSTON
8
28.75
28.75
59.22
41.46
LINCOLN
8
23.57
26.94
37.02
30.66
5.64
5.64
11.28
13.90
16.07
21.34
16.07
16.05
10.04
15.06
15.06
16.46
LITTLE COMPTON
MIDDLETOWN
NARRAGANSETT
NEW SHOREHAM
5
5.34
5.34
5.34
9.75
NEWPORT
12.06
16.72
16.72
23.45
NORTH KINGSTOWN
18.91
18.91
18.91
22.04
NORTH PROVIDENCE
2, 8
27.94
34.68
69.91
41.95
NORTH SMITHFIELD
16.02
17.77
42.80
37.62
PAWTUCKET
23.06
30.88
52.09
53.30
2, 6
15.80
15.80
15.80
22.50
PORTSMOUTH
PROVIDENCE
9
19.25
36.75
55.80
60.00
RICHMOND
2, 6
20.94
20.94
20.94
22.64
SCITUATE
6, 7
18.98
21.94
40.38
30.20
17.13
17.13
59.70
39.00
15.48
15.48
15.48
18.71
SMITHFIELD
SOUTH KINGSTOWN
7
TIVERTON
19.30
19.30
19.30
19.14
WARREN
20.07
20.07
20.07
26.00
WARWICK
20.06
30.09
40.12
34.60
2, 3, 8
22.55
22.55
33.85
19.02
4
25.39
See Note 4
40.13
28.47
WEST GREENWICH
WEST WARWICK
WESTERLY
WOONSOCKET
8
Source: Division of Municipal Finance
10.64
10.64
10.64
29.67
35.94
39.99
46.58
46.58
Represents tax rate per thousand dollars of assessed value.
Table 3
CLASSES:
RRE = Residential Real Estate
COMM = Commercial Real Estate
PP = Personal Property
MV - Motor Vehicles
NOTES:
1) Rates support fiscal year 2014 for East Providence.
2) Municipality had a revaluation or statistical update effective 12/31/13.
3) Vacant land taxed at $16.07 per thousand of assessed value.
4) Real Property taxed at four different rates: $36.28 (apartments 6+ units); $30.85 (combination,
commercial I, commercial II, industrial, commercial condo, comm./ind. vacant land, comm. buildings on
leased land, utilities and rails, other vacant land); $36.45 (two to five family); $25.39 (one family residence,
estates, farms, seasonal/beach property, residential vacant land, residential buildings on leased land,
residential condo, time shared condo, farm/forest/open space, mobile homes, two-family owner occupied
properties)
5) New Shoreham's Real Property is assessed at 80% of Fair Market Value at the time of
revaluation/update. Real Property in all other municipalities is assessed at 100%.
6) Motor vehicles in Portsmouth, Richmond & Scituate are assessed at 70%, 80%, & 95% of the values
prescribed by
the Rhode Island Vehicle Value Commission, respectively. Motor Vehicles assessed at 100% in all other
municipalities.
7) Rates rounded to two decimals
8) Denotes homestead exemption available
9) Providence's homestead exemption eliminated effective FY 2014. Tax classification utilized in its place
with owner occupied residential property taxed at $19.25 and non-owner occupied residential property
d $33
Table 4
FY 2014 Rhode Island Tax Rates by Class of Property
Assessment Date December 31, 2012
Tax Roll Year 2013
MUNICIPALITY
NOTES
RRE
COMM
PP
MV
$18.20
$18.20
$18.20
$42.00
12.80
12.80
12.80
17.35
2
18.58
18.58
18.58
40.00
2, 7, 8
25.72
37.06
73.11
48.65
9.46
9.46
9.46
13.08
7
18.66
22.49
18.66
18.75
22.84
34.26
34.26
42.44
BARRINGTON
BRISTOL
BURRILLVILLE
CENTRAL FALLS
CHARLESTOWN
COVENTRY
CRANSTON
CUMBERLAND
1
15.78
15.78
28.86
19.87
EAST GREENWICH
10
22.90
22.90
22.90
22.88
EAST PROVIDENCE
1, 2, 8
22.78
25.21
56.25
37.10
EXETER
14.72
14.72
14.72
32.59
FOSTER
20.40
20.40
28.03
36.95
GLOCESTER
21.24
24.14
42.29
24.37
HOPKINTON
19.77
19.77
19.77
21.18
JAMESTOWN
8.75
8.75
8.75
14.42
JOHNSTON
2, 8
28.75
28.75
59.22
41.46
LINCOLN
2, 8
23.49
26.85
36.89
30.66
5.38
5.38
10.76
13.90
15.71
20.87
15.71
16.05
9.80
14.68
14.68
16.46
LITTLE COMPTON
MIDDLETOWN
7
NARRAGANSETT
NEW SHOREHAM
2, 5
5.21
5.21
5.21
9.75
NEWPORT
11.71
16.23
16.23
23.45
NORTH KINGSTOWN
18.80
18.80
18.80
22.04
NORTH PROVIDENCE
8
24.29
31.03
69.41
41.95
NORTH SMITHFIELD
15.86
17.57
42.75
37.62
PAWTUCKET
23.06
30.88
52.09
53.30
PORTSMOUTH
6, 7
14.53
14.53
14.53
22.50
PROVIDENCE
2, 8, 9
19.25
36.75
55.80
60.00
RICHMOND
6
19.76
19.76
19.76
22.64
SCITUATE
2, 5, 6, 7
37.37
43.20
39.75
30.20
17.52
17.52
61.06
39.00
SMITHFIELD
SOUTH KINGSTOWN
2, 7
15.47
15.47
15.47
18.71
TIVERTON
19.37
19.37
19.37
19.14
WARREN
18.67
18.67
18.67
26.00
WARWICK
19.79
29.68
39.58
34.60
22.55
22.55
33.85
19.02
24.67
See Note 4
39.00
28.47
WEST GREENWICH
WEST WARWICK
3, 8
2, 4, 7
WESTERLY
WOONSOCKET
8
Source: Division of Municipal Finance
10.53
10.53
10.53
29.67
34.56
39.81
46.58
46.58
Represents tax rate per thousand dollars of assessed value.
Table 4
CLASSES:
RRE = Residential Real Estate
COMM = Commercial Real Estate
PP = Personal Property
MV = Motor Vehicle
NOTES:
1) Rates support fiscal year 2013 for East Providence.
2) Municipality had a revaluation or statistical update effective 12/31/12.
3) Vacant land taxed at $16.07 per thousand of assessed value.
4) Real Property taxed at four different rates: $35.26 (apartments 6+ units); $29.98 (combination, commercial I,
commercial II, industrial, commercial condo, comm./ind. vacant land, comm. buildings on leased land, utilities
and rails, other vacant land); $35.42 (two to five family); $24.67 (one family residence, estates, farms,
seasonal/beach property, residential vacant land, residential buildings on leased land, residential condo, time
shared condo, farm/forest/open space, mobile homes, two-family owner occupied properties)
5) New Shoreham & Scituate's Real Property is assessed at 80% & 50% of Fair Market Value, respectively, at
the time of revaluation/update. Real Property in all other municipalities is assessed at 100%.
6) Motor vehicles in Portsmouth, Richmond & Scituate are assessed at 70%, 80%, & 95% of the values prescribe
the Rhode Island Vehicle Value Commission, respectively. Motor Vehicles assessed at 100% in all other municipa
7) Rates rounded to two decimals
8)) Denotes homestead exemptionpavailable
p
owner occupied residential property taxed at $19.25 and non-owner occupied residential property taxed at
$33.75.
10) Tax rates reflective of merger of fire district and municipality effective FY 2014.
Table 5
Tax Levy - As of December 31, 2012 Assessment Date
2
Municipal Total Levy Per Capita
Municipality
Residential
Industrial
Tangible
Vehicles
Barrington
Bristol
Burrillville
Central Falls
Charlestown
Coventry
Cranston
Cumberland
East Greenwich
East Providence 1
Exeter
Foster
Glocester
Hopkinton
Jamestown
Johnston
Lincoln
Little Compton
Middletown
Narragansett
New Shoreham
Newport
North Kingstown
North Providence
North Smithfield
Pawtucket
Portsmouth
Providence
Richmond
Scituate
Smithfield
South Kingstown
Tiverton
Warren
Warwick
West Greenwich
West Warwick
Westerly
Woonsocket
$47,361,017
31,091,030
18,285,411
8,226,339
20,865,099
48,435,056
107,296,992
43,647,014
40,497,596
50,341,859
9,835,371
8,872,144
16,511,206
14,830,990
17,994,120
40,485,735
29,848,657
9,731,193
29,091,742
40,022,937
7,758,689
46,111,065
52,854,596
40,938,035
16,044,236
53,520,238
40,936,097
150,040,884
13,417,848
17,251,212
29,353,213
54,871,083
32,002,911
16,639,786
111,644,697
10,437,681
34,402,319
52,148,629
36,357,172
$2,464,862
3,133,826
4,807,034
3,175,836
712,085
9,850,244
44,755,122
8,009,333
7,753,516
27,924,157
979,492
971,579
1,390,556
1,611,304
523,989
13,637,328
12,373,332
174,950
11,202,175
3,924,032
800,537
17,481,749
10,089,546
13,322,212
4,290,067
25,604,358
4,271,456
115,176,644
1,644,028
6,569,332
9,896,823
7,129,849
3,324,435
3,005,934
68,526,261
4,907,948
12,447,761
6,821,868
12,323,097
$747,706
541,614
1,333,606
1,116,334
192,598
1,145,667
9,686,843
3,487,540
1,438,782
13,354,701
315,092
234,020
756,262
402,448
98,279
7,153,113
5,358,061
105,281
1,419,727
607,068
20,583
1,938,036
2,475,296
4,091,835
4,843,874
5,789,889
849,038
41,461,211
377,718
861,453
5,917,956
1,603,430
783,582
579,892
20,794,760
1,271,890
4,546,259
1,198,430
3,324,319
$5,553,727
2,288,896
4,414,216
1,702,991
909,239
5,118,101
19,852,104
5,328,924
2,155,895
10,117,720
1,919,034
1,191,637
2,092,224
1,383,457
544,408
8,915,696
4,912,238
318,315
1,686,684
1,506,176
144,125
1,920,605
4,616,419
9,383,895
4,527,132
14,472,308
1,965,298
34,135,783
1,300,947
1,733,042
6,545,927
3,477,752
1,408,996
1,861,635
22,797,727
1,157,747
4,967,287
5,140,677
7,883,639
$56,127,312
37,055,367
28,840,267
14,221,500
22,679,022
64,549,068
181,591,061
60,472,810
51,845,789
101,738,436
13,048,989
11,269,380
20,750,248
18,228,200
19,160,796
70,191,873
52,492,288
10,329,739
43,400,329
46,060,213
8,723,934
67,451,455
70,035,857
67,735,976
29,705,309
99,386,793
48,021,888
340,814,523
16,740,541
26,415,039
51,713,919
67,082,115
37,519,924
22,087,247
223,763,444
17,775,266
56,363,626
65,309,604
59,888,228
$3,432
1,626
1,803
734
2,899
1,843
2,257
1,803
3,945
2,158
1,962
2,449
2,121
2,235
3,535
2,435
2,483
2,959
2,687
2,904
10,109
2,767
2,651
2,108
2,490
1,395
2,772
1,913
2,183
2,554
2,408
2,202
2,384
2,074
2,706
2,923
1,935
2,866
1,452
$1,450,001,899
63.03%
$487,008,655
21.17%
$152,224,193
6.62%
$211,352,627
9.19%
$2,300,587,374
100.00%
$2,186
Statewide Total
Percent of Total
1 Dec. 31, 2012 Assessment Date represents FY 2014 for all municipalities except East Providence, which represents FY 2013.
2 Based on 2008-2012 U.S. Census Bureau, Population Division. (Release date: 12/2013)
Table 6
Summary - Assessed Values and Tax Levy
12/31/2012
Residential
Commercial/
Industrial
Tangible
Property
Motor Vehicles
Total
(In billions of $) (In billions of $) (In billions of $) (In billions of $) (In billions of $)
Assessed Value
$82.49
$18.66
$3.97
$6.16
% of Total Value
74.1%
16.8%
3.6%
5.5%
$111.28
(in millions of $) (in millions of $) (in millions of $) (in millions of $) (in millions of $)
Tax Levy (FY 2014
$1,450.0
$487.0
$152.2
$211.4
% of Total Levy
63.0%
21.2%
6.6%
9.2%
Tax Levy
As a % of Value
1.76%
2.61%
3.83%
3.43%
$2,300.6
2.07%
PERSPECTIVES
AND OPTIONS
 Prior history of low-value exemption
 Low-value exemptions in other New
in PVD
England states
 The impact of taxes on the cost of car
ownership
 The value of City services for car owners
 The fiscal impact of adjusting the car tax
exemption and rates


Before 1999, the exemption in PVD and all RI cities and towns was
$0.
In 1999, the General Assembly enacted legislation* providing 100%
State-level reimbursement if cities and towns offered exemptions up
to a given threshold, phased in over time:
• FY 1999: $0-$1,500
• FY 2000: $1,500-$2,500
• FY 2001: $2,500-$3,500
• FY 2002: $3,500-$4,500
• FY 2003-05: $4,500
• FY 2006: $5,000
• FY 2007: $6,000
• *R.I.G.L. §44-34.1-1





General Assembly defunded the program in 2010, limiting
reimbursement to $500 exemption.
Providence retained the $6,000 exemption in 2010-11, contributing
to a $70 million mid-year deficit and a “Category 5 Fiscal Hurricane”
In the 2011-12 budget,
Providence reduced the
exemption to $1,000.
 Massachusetts:
$0, but phase out valuation
based on age.
 New Hampshire/Maine: $0, but rates decrease
as vehicle gets older.
 Connecticut: $0, with rates set by each
community (Hartford is $74.29)
 Vermont: No tax





Gasoline: $1,079 - $2,157
Liability Insurance: $1,000
Maintenance: $497
State Fees: $68
City Car Tax: $120
 TOTAL:
 Car
$2,764 - $3,842
Tax as % of total: 3.1%-
4.3%
SERVICE
COST ($MILLION)
COST (PER PVD CAR)
HIGHWAY PROGRAM
$4.04
$35.35
SNOW REMOVAL
$1.60
$14.01
TRAFFIC ENGINEERING
$1.17
$10.28
ROAD REPAIR BOND
$2.91
$25.45
STREET LIGHTS
$4.30
$37.64
POLICE TRAFFIC SAFETY
$3.0
$26.26
TOTAL
$17.02
$149.00
Value
Count
Percentage
$0-$1,000
6,191
5.42%
$1,001-$5,000
51,275
44.89%
$5,001-$10,000
28,166
24.66%
$10,001-$20,000
20,760
18.17%
$20,001-$30,000
5,436
4.76%
$30,001-$40,000
1,400
1.23%
$40,001-$50,000
436
0.38%
$50,000+
569
0.50%
TOTAL
114,233
100.00%
• More than 50% of vehicles valued < $5,000
• Nearly 75% valued < $10,000
• Less than 7% valued > $20,000.
Tax
Rate
Exemption
Minimum
Tax
Impact
($ million)
$60.00
$1,000
$0
$0
$60.00
$2,000
$0
-$5.52
$60.00
$3,000
$0
-$10.40
$60.00
$4,000
$0
-$14.51
$60.00
$5,000
$0
-$17.82
$60.00
$6,000
$0
-$20.52
$76.78
$6,000
$0
-$15.15
Tax Exemption
Rate
Minimum
Tax*
Impact
($ million)
$60
$1,000
$100
+$2.50
$60
$1,500
$100
+$0.24
$60
$1,550
$100
+$0.01
$57
$1,000
$100
+$0.58
*if your actual tax is
$100 or higher, you
do not pay the
minimum tax.
Requires change in
State law.
Tax Exemption
Rate
Minimum
Tax*
Impact
($ million)
$60
$1,000
$150
+$4.43
$60
$2,000
$150
+$0.75
$60
$2,250
$150
+$0.01
$53
$1,000
$150
+$0.19
*if your actual tax is
$150 or higher, you
do not pay the
minimum tax.
Requires change in
State law.
200.00%
150.00%
100.00%
50.00%
0.00%
-50.00%
350.00%
300.00%
250.00%
200.00%
150.00%
100.00%
50.00%
0.00%
-50.00%
Value Range
Total Current Tax
Total Scenario Tax
Dollar Change
Percentage Change
1-3,000
$1,369,699
$3,865,300
$2,495,601
182.20%
3,000-5,000
$4,512,816
$3,672,141
($840,675)
-18.63%
5,000-10,000
$9,361,553
$8,507,975
($853,578)
-9.12%
10,000-20,000
$13,435,379
$12,868,010
($567,369)
-4.22%
20,000-30,000
$6,614,888
$6,456,323
($158,565)
-2.40%
30,000-40,000
$2,411,415
$2,371,155
($40,260)
-1.67%
40,000-50,000
$1,102,605
$1,088,679
($13,926)
-1.26%
50,000-60,000
$405,225
$401,034
($4,191)
-1.03%
60,000-70,000
$211,765
$209,917
($1,848)
-0.87%
70,000+
$291,439
$289,360
($2,079)
-0.71%
$39,716,784
$39,729,894
$13,110
0.03%
Value Range
Total Current Total Scenario
Tax
Tax
Dollar
Change
Percentage
Change
1-3,000
$1,369,699
$5,797,950
$4,428,251
323.30%
3,000-5,000
$4,512,816
$3,821,250
($691,566)
-15.32%
5,000-10,000
$9,361,553
$7,421,603
($1,939,950)
-20.72%
10,000-20,000
$13,435,379
$12,145,904
($1,289,475)
-9.60%
20,000-30,000
$6,614,888
$6,254,513
($360,375)
-5.45%
30,000-40,000
$2,411,415
$2,319,915
($91,500)
-3.79%
40,000-50,000
$1,102,605
$1,070,955
($31,650)
-2.87%
50,000-60,000
$405,225
$395,700
($9,525)
-2.35%
60,000-70,000
$211,765
$207,565
($4,200)
-1.98%
70,000+
$291,439
$286,714
($4,725)
-1.62%
$39,716,784
$39,722,069
$5,285
0.01%