Under the Dome: Tax Relief, Tracked Bills

At the Chamber’s Eggs and Issues breakfast last week, Senate President Dominick Ruggerio and Senator Melissa Murray announced the introduction of legislation to eliminate the tangible tax for approximately 85% of businesses in Rhode Island.  This nuisance tax is well known to companies, as it is not only a double tax on equipment and furniture, but the annual filing form requires time as owners report the value of items purchases, the number of years each piece of equipment/furniture has been in use, and then calculates the depreciation to arrive at a final value for each item in use.

The legislation would provide a $100,000 exemption to all tangible tax accounts. Those with more than $100,000 worth of tangible assets would have to pay the tax on the assets above $100,000, but would still receive an equal amount of tax relief.  Since the tangible tax is a municipal-level tax rather than a state one, the state would reimburse each city, town and fire district annually for their lost revenue, just as it does for revenue they lost from the phased-out vehicle excise tax. The exemption is estimated to save businesses about $36.6 million.

The legislation would take effect in fiscal year 2025, with reimbursement based on the prior year’s FY 2024 tax roll.  The bill would also require municipalities and fire districts to cap their tangible property tax rate at the level applied in fiscal year 2023. The tax cap would not apply in the case of municipalities and fire districts that utilize a uniform tax rate for all classes of property.

The Chamber has been working with RIPEC on this issue.  RIPEC completed a study on the tangible tax to assist legislators in understanding the financial impact associated with various levels of tangible tax exemption options.  The Chamber thanks RIPEC for its hard work on this issue.  The bill has yet to be assigned a number.

Below is a list of bills that have been filed and that the Chamber Coalition is tracking. The list contains bill numbers, sponsors of the legislation, a brief summary, and links to the legislation:

House Bill No. 6232 Azzinaro, Corvese, Cardillo, Noret, J. Lombardi, Diaz, Hull, Fellela, Bennett, Kennedy, AN ACT RELATING TO INSURANCE — ACCIDENT AND SICKNESS INSURANCE POLICIES (Annually increases the rate of physicians’ reimbursement for each in-network health care service that are reimbursed below the average reimbursement rates set by Connecticut and Massachusetts.)

Senate Bill No. 855 Gu, AN ACT RELATING TO HEALTH AND SAFETY — STATE BUILDING CODE (Requires the state building code standards committee to revise the state energy conservation code to meet 2024 International Energy Conservation Code electric readiness provisions.)

Senate Bill No. 858 Gu, Pearson, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT — 2021 ACT ON CLIMATE (Requires an owner of a stationary refrigeration system in Rhode Island to register their system with the department of environmental management.)

Senate Bill No. 884 Mack, Kallman, Euer, AN ACT RELATING TO TOWNS AND CITIES — GENERAL POWERS (Assess a vacancy tax of one percent (1%) of the total assessed value of all real property based on the real property’s assessed value for vacant units.)

Senate Bill No. 888 LaMountain, Lauria, McKenney, Tikoian, Burke, Valverde, AN ACT RELATING TO LABOR AND LABOR RELATIONS — RHODE ISLAND NONCOMPETITION AGREEMENT ACT (Prohibits noncompetition agreements except for noncompetition agreements between a seller and buyer of a business.)

Senate Bill No. 909 Mack, Euer, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT — GREEN JUSTICE ZONES AND ENVIRONMENTAL JUSTICE (Establishes the first Green Justice Zone and environmental justice, a model that may be replicated in future years to ensure that all communities throughout the state have clean air and clean water.)

Senate Bill No. 911 Mack, Kallman, Murray, Valverde, Bell, Ujifusa, Acosta, Euer, Lawson, AN ACT RELATING TO PROPERTY — RESIDENTIAL LANDLORD AND TENANT (Creates a tenant bill of rights to the right to counsel, the right to habitability, the right to organize free, the right to be free from discrimination, the right to first refusal if the landlord decides to sell the property, and right to renew lease.)