NBC 10 I-Team: Bill could offer relief from RI car tax

It's one of the most hated taxes in a state ranked near the bottom for all kinds of taxes. Now, a new bill introduced in the Rhode Island Senate could give taxpayers frustrated with their car's taxable value a way to fight back.

The legislation, introduced by Sen. William Walaska of Warwick, would tax cars based on their trade-in value, rather than the clean retail value that's used under the current system. A car's clean retail value is typically thousands of dollars more than its actual market value.

Walaska's bill would also allow taxpayers to present an appraisal from a licensed car dealer to the state's Vehicle Value Commission. Under the current system, the VVC relies on a book of clean retail values from the National Auto Dealers Association. Car values can't be adjusted unless an error was made when the tax bill was calculated and mailed out by local tax assessors.

During a months-long investigation, the NBC 10 I-Team found Rhode Island car owners whose vehicles are valued at as much as nine times more than the actual market value.

The I-Team also found most drivers who appealed a car's value saw their tax bills go up, not down. Close to 75 percent of drivers who filed appeals claiming their vehicles were overvalued were told by the VVC that their vehicles were worth even more, and they had actually been undertaxed.

Similar legislation aimed at changing the taxable value from clean retail to trade-in has been introduced every year since 2011 by Rep. Joe McNamera of Warwick. McNamera told the NBC 10 I-Team his efforts have been stymied by cities and towns that depend on revenue from the car tax, despite growing public outrage with the state's car tax system.

Gov. Gina Raimondo promised to address the car tax crisis during her campaign, and she sent a letter to the VVC during its last meeting Dec. 5 asking commissioners to change the way cars are taxed. But commissioners told the I-Team they don't believe they have the legal authority to change the tax system without action to change the law from inside the State House.

Walaska's bill, 2015-S0023, was referred to the Senate Committee on Finance.

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