Did you receive a letter about delinquent car tax?

The current (2011) bill is for vehicles you owned in calendar year 2010

The car tax (also called excise tax) can be a little tricky. When you are delinquent in your taxes, DMV will block your renewal registration for all cars under your name. Your relationship with both the RI DMV and the Tax Collector is involved in this tax. Your registration is not blocked if just your 2011 bill is delinquent.

• The municipality you live in sets the tax rate and the amount of exemption.
• DMV determines the value of your car and where that car "lives"(based on where it is registered.)

Here is some additional information on the car tax.

Why you got a bill this year when you didn't get one last year.
In prior years, an exemption on the first $6,000 of a car's value would result in no tax (if your car was assessed at something less that $6,000.) This year, the exemption was lowered to $1,000, so many previously untaxed cars became taxable. For example, if your car is assessed at $5,000, with the $1,000 exemption, you would be taxed on $4,000. At a tax rate of $60 per $1,000, this car's tax would be 4 x $60 = $240.

The assessed value of your car is set by the state, not the city.
The resource RI DMV uses is the National Automobile Dealers Association (NADA) "clean resale value." There is a mechanism to appeal this, available through the City Assessor. LINK

You incur a delinquency if you paid the tax, but you paid late--- or you missed a quarterly payment.
Under state tax law, once a quarterly payment deadline is missed, the ENTIRE year's unpaid bill is charged interest until it is totally paid off.

How interest is calculated.
RI state law controls interest accrual: when ANY quarter is paid after the due date, the ENTIRE portion of the unpaid bill is "due" AND interest is assessed at 1% a month from July to the date of payment.

Problem: Moving without notifying DMV..Bill goes to your old address.
DMV provides all RI municipalities with a car tax database, based on DMV's registration data. To prevent a problem when you move, file a change of address for each affected vehicle within 10 days. You can download the change of address form here: www.dmv.ri.gov. Submitting the change of address form will update local municipalities, taking your vehicle off the tax rolls in the town you moved from and adding it to the city or town you moved to.

If you don't file the change of address form, the next tax bill will come from your old town (with its tax rates and its exemptions.)

Problem: Not turning in your license plates...your tax continues until the plates expire.
When you (1) discontinue a registration (for example, going from two cars to one, or after a death) or (2) register your car in another state due to relocation, you need to turn off your registration with DMV to stop the tax from being charged.

If you do not turn in your plates, you will continue to be taxed on the vehicle attached to that registration.

You pay tax based on the actual number of days the car is registered in a year. The tax is assessed day by day ("per diem"). Divide the number of days the car was registered by 365…that's what portion of the total tax you owe.

"One Year in Arrears" You forget you even had that car.
Perhaps the most confusing part of the car tax is that the tax bill represents what vehicles you owned last year. So, whatever is in the DMV database (what cars you own, what town the registration is in) in 2010 will receive a bill in August, 2011, and the first quarter is payable on September 24, 2011.

So, a car registered at the DMV in January, 2010 will not be assessed by DMV until December 31, 2010 and the first tax due on that car will be September 24, 2011.

Let's suppose you move out of state with that car on October 31, 2012 and turn in your RI plates on November 1, 2012. On December 31, 2012, DMV will assess taxes on that car for January though October and a partial (10 month) bill will go to your last RI address in August 2013 with the first payment due September 24, 2013.

The same rule would not apply if you moved from Providence to Cranston. The entire tax year would be payable to the municipality that issued the bill.