NBC 10 I-Team: Flurry of car tax reform bills at RI State House

There’s a new batch of legislation aimed at fixing Rhode Island’s troubled car tax system in 2016. (WJAR)

There's a new batch of legislation aimed at fixing Rhode Island's troubled car tax system in 2016.

But as the NBC 10 I-Team has reported, similar bills have stalled in committee, year after year.

"I suspect we'll get some traction this year," said Sen. William Walaksa.

The Warwick Democrat has introduced two car tax reform bills this year. He's done the same for the past three years with no success, as have several of his colleagues in the State House. One of the reasons is that cities and towns have consistently blocked such legislation, saying they stand to lose at least $40 million in car tax revenue.

Several of the 2016 car tax reform bills, including one from Walaska, attempt to remove that roadblock by forcing the state to pay the difference to make cities and towns whole.

During a two year investigation, the NBC 10 I-Team found vehicles taxed at up to nine times their market value. Walaska's legislation and similar bills would force the state's Vehicle Value Commission to tax cars based on their Trade-In Value, instead of the inflated Clean Retail Value the system currently uses.

Critics say using Clean Retail Value hits low-income taxpayers and those who own older vehicles the hardest.

"Use the average trade-in value because that's what the car is worth," Walaska said.

But Mike Stenhouse, CEO of the taxpayer watchdog group Rhode Island Center for Freedom and Prosperity, said the bills don't go far enough.

"The only movement we'd like to see on the car tax is to have it gone," Stenhouse told NBC 10.

Nationally, 24 states don't tax cars. Among those that do, Rhode Island is the worst offender.

A 2016 study from Wallet Hub found that the Ocean State has the highest car tax in the nation, just under $1,100 for a $23,000 car.

Stenhouse said reform bills don't address the real problem.

"We're not encouraged by this reform," he said. "We think it's just re-shuffling the chairs on the deck. Until we absolutely repeal this tax, you won't see groups like ours happy."

Each of the 2016 bills now rest with the Finance Committees in the House and Senate, which is the same place where similar legislation has died in years past.

The I-Team will continue to follow the story.

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