Resumption of Both Motor Vehicle and Retail Inventory Phase Out Act
Issue Overview: Several years ago, NFIB/Rhode Island played a lead role in support of legislation enacted to phase out the notorious motor vehicle excise and retail inventory tax.
NFIB Position: NFIB/ Rhode Island is a member of the Property Tax Relief Coalition formed that supports the continued phase out of the motor vehicle tax. The elimination of this tax is true property tax relief and we will continue to ask the General Assembly to continue to fund this program and oppose proposals to stop the state phase out of the excise tax on all motor vehicles including commercial and leased.
The 2006-2007 state budget allowed for the phase out to be increased to $5,000. In addition, legislation that allowed for the sale of Lincoln Park and increased the number of video lottery terminals at both Lincoln Park and Newport Grand requires that a percentage of the state's net terminal income derived from video lottery games be applied to continued motor vehicle excise tax phase out. The phase out will benefit our state's citizens and businesses. Rhode Island has one of the two highest automobile excise taxes nationally. In addition, Rhode Island is the only New England state with a retail inventory tax on the goods retailers sell and its continued phase out is important.
Issue Status: Unfortunately, the serious state budget woes have caused the motor vehicle excise tax to be frozen at $5,000.
