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Department of Taxation and Finance

Survey of Railroad and Utility Taxation Practices Among the States: 2005 Update


1. Basis for taxation:

All property subject to taxation shall be assessed at its full and fair cash value or at a uniform percentage of its value, not to exceed 100%, to be determined by the assessor in each city or town. The exception to this is the tangible personal property of telecommunication companies. This property is exempt from local taxation and instead is valued by the State of Rhode Island, based upon the net book value of the company's tangible personal property.

2. Property subject to taxation:

All real and tangible property in the State of Rhode Island is taxable unless otherwise exempt by statute.

3. Classification (if applicable):

Upon completion of any comprehensive revaluation, any city or town may adopt a tax classification plan by ordinance. The designated classes or property shall be limited to the following: residential real estate, commercial and industrial real estate, all ratable tangible personal property, motor vehicles and trailers subject to the excise tax. The effective tax rate applicable to any class shall not exceed by 50% the rate applicable to any other class.

4. Level of government which determines basis for tax liability - ad valorem property tax:

All real and personal property in the State of Rhode Island is assessed and levied by each municipality, with the exception of the tangible personal property of telecommunications companies, which are exempt from local taxation, are instead taxed by the State of Rhode Island, Department of Administration, Office of Municipal Affairs.

5. Report filing and valuation method(s) required by statute for ad valorem taxation:

The assessed value of real and tangible property, except the tangible personal property of telecommunication companies, is determined by each municipal assessor as of December 31 in each year at 12:00 am midnight, the date being known as the date of assessment. The assessment of tangible personal property of telecommunication companies is determined by the submission to the Department of Administration, of a declaration of value by March 1 of each year. The Department determines each company's net book value, defined as original cost less accumulated depreciation (in no case however, may a property be depreciated more than 75% of its original cost. The department applying the average assessment ratio to the net book value to create the assessed value, and then applies the average property tax rate to the assessed value to determine the levy.

6. Practical application of valuation method(s):

See #5.

7. Valuation treatment of large facilities such as power plants, dams, or rail yards:

Such facilities at fair market value are valued by municipalities. Most new power plants are taxed as a result of a payment-in-lieu of taxes agreement (PILOTs) between power plant and the city or town.

8. Apportionment method(s) required by statute:

Not applicable.

9. Practical application or apportionment requirements:

Not applicable.

10. Apportionment treatment of large facilities such as power plants, dams, or rail yards:

Not applicable.

11. Description of assessment appeals system:

Appeals regarding the assessment of real and/or tangible property may be made within 90 days from the date the first tax payment is due to the local tax assessors office. The assessor has 45 days to review the appeal, render a decision and notify the taxpayer of the decision. The taxpayer may appeal the decision of the assessor to the local board of review, or in the event that the assessor does not render a decision, the taxpayer may appeal to the local tax board of review at the expiration of the 45-day period. Appeals to the board of review are to be filed not more than 30 days after the assessor renders a decision and notifies the taxpayer, or if the assessor does not render a decision within 45 days of the filing of the appeal, not more than 90 days after the expiration of the 45 day period. The board of review shall, within 90 days of the filing of the appeal, hear the appeal and render a decision within 30 days of the date that the hearing was held. A municipality may request and receive an extension from the director of the Department of Administration. Any person still aggrieved by the assessment may file a petition in Superior Court for relief from the assessment within 30 days of the board of review decision notice. Telecommunication companies aggrieved by any action in determining the amount of any tax or assessment of tangible personal property may apply in writing to the Tax Administrator within 30 days of the mailing of the notice of tax or assessment for a hearing.

12. Status of deregulation/restructuring of electric generating and impact on valuation and apportionment methods used:

Rhode Island has restructured and deregulated the electricity industry, including divestiture of electrical generating facilities from the transmission and distribution system. The uncertainty of market value becomes apparent in the propensity of municipalities to enter into PILOT agreement with respective power plant owners.

13. State Government Staffing:

Staff consists of one employee (full-time equivalent basis).

Law Source(s):     General Laws of Rhode Island, Title 44, Chapters 13 and 13.1

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