Picard pleased local drivers will save through excise tax reduction he supported
STATE HOUSE – Sen. Roger A. Picard is pleased that local drivers will see a reduction in their car taxes this year as a result of the excise tax phase-out plan he supported through the state budget passed by the General Assembly.
The plan, now in its second year, gradually eliminates the tax over the course of six years, and replaces lost excise tax revenue for cities and towns, since the excise tax is levied by municipalities, not the state. The state budget passed by lawmakers includes $54.7 million to fund the program in 2019.
“The car tax has long been a burden, especially on low-income drivers. Finally getting rid of the tax once and for all will help a lot of people who are struggling to pay bills, and will help those driving the oldest, least valuable cars first,” said Senator Picard (D-Dist. 20, Woonsocket, Cumberland). “I’ve strongly supported the phase-out of the car tax because I understand this tax weighs most heavily on the people who are struggling to get by. I’m glad we’ve been able to continue to fund this program, and I believe it’s extremely important to keep it going until the tax has been completely eliminated.”
Under the plan that started in last year’s budget, the state began reducing the percent of retail value that can be taxed from 100 to 95 percent, the minimum exemption applied to all cars rose from $500 to $1,000, and all cars older than 15 years became exempt.
Under this year’s budget, the minimum exemption will doubled to $2,000 and the assessed value will drop from 95 percent to 90 percent, so the tax on every car will be less than it was last year.
The assessed value percentage and a cap on the rate — this year $50 per $1,000 —will continue to drop, and the minimum exemption will continue to rise until the tax is wiped out entirely in 2024.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903