Senate Bill #823 (2019)

AN ACT RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

Allows the town of East Greenwich to adopt a flexible tiered tax classification system regardless of whether it is a revaluation or update year and also to provide an exemption to small businesses for tangible personal property taxes.

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Changes since original draft

  • 2019 – S 0823
  • 2019 – S 0823 AS AMENDED
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  • LC002451
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  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES
  • Introduced By: Senators Raptakis, and Valverde
  • Date Introduced: April 30, 2019
  • Referred To: Senate Finance
  • It is enacted by the GeneralAssembly as follows:
  • SECTION 1. Section 44-5-11.8 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of LocalTaxes"is hereby amended to read as follows:
  • It is enacted by the General Assembly as follows:
  • SECTION 1. Section 44-5-11.8 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" is hereby amended to read as follows:
  • 44-5-11.8. Tax classification.
  • (a) Upon the completion of any comprehensive revaluation or any update, in accordance with § 44-5-11.6, any city or town may adopt a tax classification plan, by ordinance, with the following limitations:
  • (1) The designated classes of property shall be limited to the classes as defined in subsection (b) of this section.
  • (2) The effective tax rate applicable to any class, excluding class 4, shall not exceed by fifty percent (50%) the rate applicable to any other class, except in the city of Providence and the town of Glocester and the town of East Greenwich; however, in the year following a revaluation or statistical revaluation or update, the city or town council of any municipality may, by ordinance, adopt tax rates for the property class for all ratable tangible personal property no greater than twice the rate applicable to any other class, provided that the municipality documents to, and receives written approval from, the office of municipal affairs that the rate difference is necessary to ensure that the estimated tax levy on the property class for all ratable tangible personal property is not reduced from the prior year as a result of the revaluation or statistical revaluation.
  • (3) Any tax rate changes from one year to the next shall be applied such that the same percentage rate change is applicable to all classes, excluding class 4, except in the city of Providence and the town of Glocester.
  • (3) Any tax rate changes from one year to the next shall be applied such that the same percentage rate change is applicable to all classes, excluding class 4, except in the city of Providence and the town of Glocester and the town of East Greenwich.
  • (4) Notwithstanding subdivisions (2) and (3) of this subsection, the tax rates applicable to wholesale and retail inventory within Class 3 as defined in subsection (b) of this section are governed by § 44-3-29.1.
  • (5) The tax rates applicable to motor vehicles within Class 4, as defined in subsection (b) of this section, are governed by § 44-34.1-1.
  • (6) The provisions of chapter 35 of this title relating to property tax and fiscal disclosure apply to the reporting of, and compliance with, these classification restrictions.
  • (b) Classes of Property.
  • (1) Class 1: Residential real estate consisting of no more than five (5) dwelling units; land classified as open space; and dwellings on leased land including mobile homes. In the city of Providence, this class may also include residential properties containing partial commercial or business uses and residential realestate of more than five (5) dwelling units.
  • (i) A homestead exemption provision is also authorized within this class; provided however, that the actual, effective rate applicable to property qualifying for this exemption shall be construed as the standard rate for this class against which the maximum rate applicable to another class shallbe determined, except in the town of Glocester.
  • (1) Class 1: Residential real estate consisting of no more than five (5) dwelling units; land classified as open space; and dwellings on leased land including mobile homes. In the city of Providence, this class may also include residential properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units.
  • (i) A homestead exemption provision is also authorized within this class; provided however, that the actual, effective rate applicable to property qualifying for this exemption shall be construed as the standard rate for this class against which the maximum rate applicable to another class shall be determined, except in the town of Glocester.
  • (ii) In lieu of a homestead exemption, any city or town may divide this class into non- owner and owner-occupied property and adopt separate tax rates in compliance with the within tax rate restrictions.
  • (2) Class 2: Commercial and industrial real estate; residential properties containing partial commercial or business uses; and residential real estate of more than five (5) dwelling units. In the city of Providence, properties containing partial commercial or business uses and residential realestate of more than five (5) dwelling units may be included in Class 1.
  • (3) Class 3:All ratable, tangible personalproperty.
  • (2) Class 2: Commercial and industrial real estate; residential properties containing partial commercial or business uses; and residential real estate of more than five (5) dwelling units. In the city of Providence, properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units may be included in Class 1.
  • (3) Class 3: All ratable, tangible personal property.
  • (4) Class 4: Motor vehicles and trailers subject to the excise tax created by chapter 34 of this title.
  • (c) The city council of the city of Providence and the town council of the town of Glocester and the town council of the town of East Greenwich may, by ordinance, provide for, and adopt, a tax rate on various classes as they shalldeem appropriate. Provided, that the tax rate for Class 2 shall not be more than two (2) times the tax rate of Class 1; the tax rate applicable to Class 3 shall not exceed the tax rate of Class 1 by more than two hundred percent (200%). Glocester shall be able to establish homestead exemptions up to fifty percent (50%) of value and
  • LC002451 - Page 2of 5 the calculation provided in subsection (b)(1)(i) shall not be used in setting the differential tax rates.
  • (d) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2002.
  • (e) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section and the provisions of § 44-5-79, to be applicable to taxes assessedonor after the assessment date of December 31, 2004.
  • (f) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent (50%) of value to one hundred percent (100%) of value on residential and commercial/industrial/mixed-use property, while tangible property is assessed at one hundred percent (100%) of cost, less depreciation; provided, however, the tax rate for Class 3 (tangible) property shall not exceed the tax rate for Class 1 (residential) property by more than two hundred thirteen percent (213%). This provision shall apply whether or not the fiscal year is also a revaluation year.
  • (g) Notwithstanding the provisions of subsections (a) and (b) of this section, the town council of the town of Coventry may hereafter, by ordinance, adopt a tax classification plan providing that Class 1, as set forth in subsection (b) "Classes of Property" of this section, may also include residential properties containing commercial or business uses, such ordinance to be applicable to taxes assessed on or after the assessment date of December 31, 2014.
  • (h) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of East Greenwich may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessedonor after the assessmentdate of December 31, 2018. Further, the East Greenwich town council may adopt, repeal, or modify said tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
  • SECTION 2. Section 44-3-65 of the General Laws in Chapter 44-3 entitled "Property Subject to Taxation" is hereby amended to read as follows:
  • 44-3-65. Narragansett – Tangible business property tax exemption. Narragansett and East Greenwich – Tangible business property tax exemption.
  • The town of Narragansett and the town of East Greenwich may by ordinance create a
  • LC002451 - Page 3of 5 tangible business property tax exemption for local small business owners in an amount not to exceed thirty-five thousand dollars ($35,000).
  • SECTION 3. This act shalltake effect upon passage. ======== LC002451 ========
  • LC002451 - Page 4of 5
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • (c) The city council of the city of Providence and the town council of the town of Glocester and the town council of the town of East Greenwich may, by ordinance, provide for, and adopt, a tax rate on various classes as they shall deem appropriate. Provided, that the tax rate for Class 2 shall not be more than two (2) times the tax rate of Class 1; the tax rate applicable to Class 3 shall not exceed the tax rate of Class 1 by more than two hundred percent (200%). Glocester shall be able to establish homestead exemptions up to fifty percent (50%) of value and the calculation provided in subsection (b)(1)(i) shall not be used in setting the differential tax rates.
  • (d) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2002.
  • (e) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section and the provisions of § 44-5-79, to be applicable to taxes assessed on or after the assessment date of December 31, 2004.
  • (f) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent (50%) of value to one hundred percent (100%) of value on residential and commercial/industrial/mixed-use property, while tangible property is assessed at one hundred percent (100%) of cost, less depreciation; provided, however, the tax rate for Class 3 (tangible) property shall not exceed the tax rate for Class 1 (residential) property by more than two hundred thirteen percent (213%). This provision shall apply whether or not the fiscal year is also a revaluation year.
  • (g) Notwithstanding the provisions of subsections (a) and (b) of this section, the town council of the town of Coventry may hereafter, by ordinance, adopt a tax classification plan providing that Class 1, as set forth in subsection (b) "Classes of Property" of this section, may also include residential properties containing commercial or business uses, such ordinance to be applicable to taxes assessed on or after the assessment date of December 31, 2014.
  • (h) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of East Greenwich may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2018. Further, the East Greenwich town council may adopt, repeal, or modify said tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
  • SECTION 2. Section 44-3-65 of the General Laws in Chapter 44-3 entitled "Property Subject to Taxation" is hereby amended to read as follows:
  • 44-3-65. Narragansett – Tangible business property tax exemption. Narragansett and East Greenwich – Tangible business property tax exemption.
  • The town of Narragansett and the town of East Greenwich may by ordinance create a tangible business property tax exemption for local small business owners in an amount not to exceed thirty-five thousand dollars ($35,000).
  • SECTION 3. This act shall take effect upon passage. ======== LC002451 ========
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES
  • ***
  • This act would allow the town of East Greenwich to adopt a flexible tiered tax classification system regardless of whether it is a revaluation or update year and also to provide an exemption to small businesses for tangible personalproperty taxes.
  • This act would take effect upon passage. ======== LC002451 ========
  • LC002451 - Page 5of 5
  • This act would allow the town of East Greenwich to adopt a flexible tiered tax classification system regardless of whether it is a revaluation or update year and also to provide an exemption to small businesses for tangible personal property taxes.
  • This act would take effect upon passage. ======== LC002451 ========

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