Citizens frustrated about car taxes will get the chance to voice concerns this evening at the State House, as the House Finance Committee hears testimony on Rep. K. Joseph Shekarchi’s (D-Dist. 23, Warwick) recently drafted reform bill.
The issue with car taxes first flared tempers about two years ago when the $6,000 statewide automobile excise tax exemption was eliminated, which allowed municipalities in Rhode Island to reduce the exemption to as low as $500. It spawned car tax revolts in Warwick and Providence, with Rob Cote leading the charge in Warwick, and Anthony Sionni organizing one in Providence.
Shekarchi originally drafted legislation that would standardize automobile taxes statewide by imposing an excise tax in a flat amount of $600 for vehicles less than three years old, and $360 for vehicles more than three years old.
But last week he said he is making modifications to the bill. While he was mum on details, Shekarchi said Cote contacted him to offer input about the legislation, and Shekarchi is taking Cote’s advice on particular points.
“I took some of his concerns into consideration,” Shekarchi said. “I think he’ll be happy when he sees the bill.”
However, said Shekarchi, he’s not making changes simply to please Cote. He’s adjusting the bill in order to provide relief for all taxpayers, as he said it was one of the top issues constituents had when he was canvassing during campaign season.
“It’s still a big issue,” Shekarchi said, also noting the importance of working with his colleagues, as there are several local bills relative to car taxes. “I want to take the best of all these bills and try to come up with something that’s workable and doable. We’ve got to put them together and come to a consensus. The goal is to be fair to everybody.”
Rep. Joseph McNamara (D-Dist. 19, Warwick, Cranston) is sponsoring another bill that would amend car tax statutes to require that the assessment of vehicles be based on the average trade-in price, as opposed to the full clean retail price, after a three-year phase-in period. The legislation proposes that municipal assessors assess vehicles at 95 percent of the clean retail value beginning in 2014.
By 2015, assessors would use 90 percent of the clean retail value, and by 2016 and thereafter, assessors would make assessments at 100 percent of the average trade-in value. The bill would also extend the appeal period from 30 to 45 days.
Rep. Gregory Costantino (D-Dist. 44, Lincoln) and Rep. William O’Brien (D-Dist. 54, North Providence) are also co-sponsoring legislation. Their bill, which would restore the full exemption beginning in the 2014 fiscal year, is currently before the House Finance Committee with action yet to be taken.
In order to make up for the lost revenue from restoring the exemption, the bill proposes an additional 1 percent sales tax to be imposed on all sailing vessels sold in excess of $100,000, as well as an annual property tax of 1 percent imposed on all sailing vessels registered in the state and valued in excess of $100,000.
Cote said he finds each of the bills problematic and plans to attend tonight’s hearing. He was hesitant to speak of the advice he gave to Shekarchi, saying he has yet to see Shekarchi’s modifications before press time. However, for the last two years, one of the main points Cote has suggested is to value vehicles at the average trade value, as opposed to a “fictitious” value.
On Friday, GoLocalProv.com posted an article on the topic that includes a table that ranks the 39 cities and towns in Rhode Island from highest to lowest for the 2013 fiscal year. Warwick ranked number 14.
Mayor Scott Avedisian, who in May increased the motor vehicle tax exemption threefold from $500 to $1,500, said the ranking is “not bad.”
“In a city our size, it would not be uncommon to find that we are ranked second, third, or similar in any analysis of statewide rates for taxes,” Avedisian said in an e-mail. “So to be 14th in the state is welcome news. In fact, Newport is the only city with a lower rate.”
He continued, “that being said, I know that there are a number of pieces of legislation pending before the General Assembly. There are good points and bad points in all of the legislation. I am focusing on my upcoming budget and spending my time looking to see if there is a way to increase the exemption that the city of Warwick offers our residents.”
Shekarchi said he’s hoping his bill will have a better chance of passage considering his revisions. He’s interested in hearing testimony from residents and colleagues alike.
“It’s clearly an issue that resonates within the General Assembly, so we want to try to do something that works,” Shekarchi said.