Page: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11

What Impact will the Phase-out of the Motor Vehicle Excise Tax have in Rhode Island?

The following highlights the reasons for continuing the phase-out of the motor vehicle excise tax in Rhode Island.

1. Provides permanent property tax relief.
Given the State’s high property tax burden, it is critical that efforts be made to reduce the reliance on the property tax. While motor vehicle values represent approximately 8.0 percent of the total certified property tax base, FY 1999 taxes levied on motor vehicles represented approximately 11.3 percent of the total property taxes levied in the State. Therefore, eliminating the excise tax on motor vehicles reduces property taxes by approximately 11.0 percent statewide. This would result in real, permanent property tax relief to most Rhode Islanders, as well as a more balanced State-local tax structure through funding property tax relief with revenues derived from the State’s sales tax.

Table 5 shows certified motor vehicle values as a percent of total certified assessed value statewide and motor vehicle excise tax levies as a percentage of total property tax levies statewide from FY 1989 (12/31/87) through FY 1999 (12/31/97). As the table shows, certified motor vehicle values represent 7.0 — 8.0 percent of the total assessed value in the State. However, taxes levied on motor vehicles represent approximately 11.0 percent of the total property tax levy statewide.