Two legislators are proposing a change in state law, accompanied by a city ordinance, to eliminate interest charges on previously paid quarterly property tax payments. The proposals are being sponsored by Providence State Representative John J. McCauley, Jr., District 1, and City Council Majority Leader Terrence M. Hassett, Ward 12.

Current state law requires the City of Providence and other cities and towns to collect interest on property taxes for an entire year even when some quarterly tax payments have already been paid. Under the law, if a property owner misses a single quarterly tax payment, the entire annual tax bill becomes due, and interest begins accruing as though no taxes were paid. Under proposals to be introduced in the General Assembly and the City Council in Providence, only those outstanding tax payments yet to be paid will be subject to the interest, according to McCauley and Hassett. (The City Council ordinance was introduced earlier this month and is currently under review by the Committee on Ordinances.)

Hassett also wants to see a ten (10) day grace period for quarterly tax payments.

“Our proposal corrects what has been an unfair interest charge to Providence taxpayers,” Hassett said. “If people pay their property taxes late, they are charged interest on the entire balance as if they had paid nothing. These legislative proposals will change this practice, and rightfully so.”

McCauley explained that, “This proposed change will reduce the burden on Providence taxpayers and remedy what clearly has been an unnecessary charge to otherwise faithful taxpayers. It is unfair to disregard payments that have already been made.”  He noted also that taxes in Providence are “burdensome enough,” and that “to add another charge is not fair, and we’re working to change that.”

Hassett highlighted the importance of this change in light of the down turned economy and observed that,

 “City officials have been critical of banks and mortgage companies for their failure to work with

homeowners during the foreclosure crisis, yet the City of Providence takes taxpayers to task with outrageously punitive interest charges for being late on one quarter’s property taxes,” Hassett said. “How can we preach to banks that they need to be reasonable while City government itself slaps on 12% interest charges and calls in the total tax bill for payment?” Hassett asked.