NBC 10 I-Team: Taxpayers say older cars gaining in value
CRANSTON, R.I. —
One after another, Rhode Islander taxpayers turned to the NBC 10 I-Team for answers, saying their car tax bills simply don't make sense. In some cases, cars appear to gain value, even though they're getting older.
And that's just one problem with a system critics say is a mess.
A 2008 Volkswagen Jetta owned by Tony Soly and his wife increased in value $3,000 from one year to the next.
With no explanation from the town of North Smithfield, Soly went to the state for answers.
"To me now, it's about transparency," Soly said.
The I-Team started asking questions, too, and learned a few factors could be at play.
First: the difference in the exemption from town to town, if you move. Some communities still exempt up to $6,000 of a car's value, others just $500.
Second: each town can change that exemption from year to year, as well as its tax rate.
And third: if you don't own your car for a full year, you're only taxed on a portion of its value. But that may or may not be explained on your bill.
Soly said he eventually figured out that's what happened in his case.
But then, there's Rick DiGiacomo of Glocester.
"The value of the car went up in the 10th year. To me that made no sense," DiGiacomo said.
DiGiacomo opened his tax bill from the town of Glocester and learned his 1996 Jeep Grand Cherokee was worth about $1,000 one year but $1,700 the next.
"Even though it had 10,000 more miles on it," DiGiacomo said.
DiGiacomo is a classic car collector with several mint-condition vehicles he babies. But the 19-year-old Jeep was just an older car he used to get around town.
"It wasn't a matter of the car getting better," he said. "The car was getting worse."
Glocester's exemption hasn't changed, and DiGiacomo owned the Jeep for more than a decade. So his tax bill remains a mystery.
Confusion aside, many say the whole car tax system is just too much.
"You buy the car, you pay a sales tax. You register the car, you pay a tax. You get it inspected, it's essentially a tax. You get a tax bill from the town, it's a tax," Soly said.
Jack Perkins heads Rhode Island's auto dealers association.
"The sales tax is 7 percent, and then you're paying another 6 percent in the first year you buy it," Perkins said.
Dealers worry high taxes and confusing bills could cause drivers to keep their older vehicles instead of trading up.
"I can afford the payment. I can afford the sales tax. I can afford the insurance and the maintenance. But the car tax becomes an issue" Perkins said.
A spokeswoman for Gov. Gina Raimondo said the governor is committed to helping cities and towns save money, so they can rely less on car tax dollars.
But right now, the governor isn't backing any of the bills aimed at changing the car tax or introducing her own plan.