Sen. Ciccone introduces bill to enact statewide motor vehicle excise tax

STATE HOUSE – Sen. Frank A. Ciccone III has introduced legislation (2016-S
that would create a statewide uniform motor vehicle excise tax rate. The
legislation would also create a fund to reimburse municipalities that will lose tax
revenue due to the enactment of the statewide rate.
«There is simply no reason for the exact same car to be taxed differently in every
single municipality in Rhode Island,» said Senator Ciccone (D-Dist. 7, Providence,
North Providence). «Our state’s taxpayers deserve some uniformity in their car tax
payments and we are too small of a state for such wildly different tax rates in each
of our cities and towns. This legislation brings some stability and equality to our
residents regarding their car tax payments.»
Senator Ciccone’s bill would create a uniform tax rate of $29.10 per $1,000 of
valuation of the motor vehicle, which is the statewide average of all the various
car tax rates Rhode Island municipalities currently employ. Currently, motor
vehicle excise tax rates range from $9.75 per $1,000 in New Shoreham to $60 per
$1,000 in Providence.
The legislation also creates the Motor Vehicle Excise Tax Equalization Fund to
reimburse municipalities for lost car tax revenue. Administered by the Director of
Revenue, the fund would be partially funded yearly by cities and towns that have
seen an increase in car tax revenues due to this act by comparing the previous
year’s tax revenue, each city and town that benefits from the act would be allowed
to keep 50% of the financial increase. The other 50% would be put into the
equalization fund to help cities and towns that will lose money. The rest of the
fund would be funded with money allocated by the General Assembly and various motor
vehicle fees generated by the RIDMV.