City may wait on car tax bills

By JOHN HOWELL
Posted 6/13/19

By JOHN HOWELL Mayor Joseph Solomon isn't a gambling man. He's not betting on whether the General Assembly will approve the governor's proposal to slow the elimination of the motor vehicle excise tax or the speaker's plan that would give taxpayers added

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City may wait on car tax bills

Posted

Mayor Joseph Solomon isn’t a gambling man.

He’s not betting on whether the General Assembly will approve the governor’s proposal to slow the elimination of the motor vehicle excise tax or the speaker’s plan that would give taxpayers added relief.

But then, according to Larry Berman, spokesman for Speaker Nicholas Mattiello, neither the mayor nor Tax Assessor Neal Dupuis need to guess what version of the tax phase-out plan will be a part of the state budget. The information is critical. The city could play it safe and send out tax bills with the governor’s calculation. The problem, however, is that if Mattiello’s plan is enacted, the city would be faced with issuing rebates.

That happened two years ago when the city couldn’t delay issuing the tax bills – it needed the money for operations – only to discover once the state budget dust settled that legislators went with Mattiello’s plan.

It was a nightmare for Tax Collector Kyla Jones and her staff. The city was issuing hundreds of refunds, many for less than $20.

That’s a waste of time and resources the mayor wants to avoid. He said Wednesday that if necessary, the city would send out real estate tax notices in the next week to 10 days and follow up with motor vehicle taxes once the state budget is resolved.

Under the third year of the phase-out plan, the state would pay municipalities $37.6 million. In her budget, Gov. Gina Raimondo proposed a schedule that would reimburse $23.2 million to cities and towns.

Currently, motor vehicles are valued for tax purposes at 90 percent of the NADA (clean retail value); the maximum exemption is $2,000 and the maximum rate per $1,000 of taxable value is $50. (This has no bearing on vehicles registered from Warwick, as the city rate is $34.60). Under the phase-out, the taxable value would drop to 85 percent, the exemption would increase to $3,000 and the tax rate would drop to $35.

The governor’s proposal wasn’t as generous. Her proposal is for the taxable value to drop to 87.5 percent, with the exemption to increase to $2,800 and the maximum rate to decline to $40.

Whatever plan is approved “is revenue neutral to the city,” Dupuis said Wednesday, as the state reimburses what the city would have been paid in taxes. There are approximately 110,000 registered vehicles in the city that, between the excise tax and state reimbursements, account for $19 million in revenues.

While revenue neutral to the city, the choice of programs will make a difference to the taxpayer. Car taxes would be higher with the governor’s budget plan.

That’s not going to happen, Berman said.

“It will be the speaker’s [plan],” he said emphatically.

You’re sure, he was asked.

“No question about it,” Berman replied, “you can take that to the bank.”

The definitive answer could come as soon as today, when the House is expected to take up the budget. But then, no one is taking bets on that.

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  • wwkvoter

    Solomon is making the right choice with this one.

    Friday, June 14, 2019 Report this