Ucci, Winfield target taxes on car and truck owners
STATE HOUSE – While the state’s excise tax has been a high-profile issue for the General Assembly this year, Rep. Stephen R. Ucci and Rep. Thomas Winfield have introduced bills taking aim at other automobile taxes that they believe are unjust.
“We are happy that we are working to phase out the car tax, and we’d like nothing more than to eliminate it completely. In the meantime, there are several other tax situations that are adversely affecting automobile owners in our state that could be addressed. These are reasonable changes that would make taxes paid by car and truck owners fairer,” said Representative Ucci (D-Dist. 42, Johnston, Cranston).
The first bill (2017-H 5250) requires cities and towns to use the National Automobile Dealers Association (NADA) trade-in value for motor vehicles for purposes of the excise tax. Currently, the state sets the rate.
The NADA value is based on the average of actual retail sales in the region, which the lawmakers say is the fairest indicator of the value of the vehicle. Lawmakers this year could approve separate legislation to phase out the excise tax, but the NADA value should be used by all municipalities during the remaining years of the tax, say Representatives Ucci and Winfield.
The second bill (2017-H 5328) concerns the trade-in value of pickup trucks. When the purchaser of a personal automobile in Rhode Island trades in another vehicle, their sales tax is calculated on the price of the new car, minus the value of the trade. But if one of the vehicles is a pickup truck, the trade-in value is not subtracted, because the state tax laws consider all pickup trucks to be commercial vehicles, not personal ones. Representative Ucci and Representative Winfield’s bill allows buyers to get the credit just as they would for any other passenger automobile, whether they are buying a new or used pickup or trading one in, as long as the vehicle is exclusively for personal use and weighs less than 8,100 pounds.
“Many, many Rhode Islanders drive pickup trucks as their personal vehicles. At the same time, many businesses use passenger vehicles as commercial vehicles. There’s just no logical reason that pickups should be singled out as ineligible for the trade-in credit that is given to all other personal vehicles, and our legislation rectifies this inequity,” said Representative Winfield (D-Dist. 53, Smithfield, Glocester).
The final bill (2017-H 5832) would put an end to a tax upon a tax for automobile lessees.
Automobile leasing companies generally bill their customers monthly, and include sales tax on the lease service. The companies pay the excise tax on the vehicle, and generally pass along the tax to the lessee. Current state law requires lease companies to include the excise tax in the total when they calculate the sales tax, meaning lessees are paying sales tax on their excise taxes.
Under the legislation, no sales or use tax could be collected on any portion of a lease payment that is charged to the customer to pay for excise taxes or any other personal property tax levied by a city or town.
“We don’t know what’s going to happen to the excise tax this year, but we do know that cleaning up these wrinkles in our laws can provide Rhode Islanders with tax relief and equity right away,” said Representative Ucci, who is the primary sponsor on all three bills, which Representative Winfield cosponsored.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903