Proposed Legislation To Phase Out Car Tax

New legislation has been proposed by Rep. David Coughlin. If passed the bill would phase out car taxes collected by cities and towns in Rhode Island. Currently, RI has one of the highest at 6% or $60 per $1,000 spent while in Providence. The is unique because each town has a different car tax rather than streamlining the process like other states.

How It Would Work

Coughlin’s bill would help solve this problem as well by relying on other forms of taxes such as sales and lottery revenue. Under the new legislation, the current $500 tax exemption on vehicles would be increased to $5,000 in 2017, $10,000 in 2018, and then the car tax would be eliminated in 2019.

Rhode Island Car Tax Compared to Country

Coughlin says that the current bill was only supposed to be a temporary measure but has stayed around too long and has continued to “plague” Rhode Island citizens every year. Rhode Island has an average car tax of $1,100 per vehicle. This new law is supposed to save Rhode Island residents millions of dollars in the coming years.