Information on the car (excise) tax
The 2014 bill is the tax for vehicles registered any time between January and December 2013*
When the tax begins and ends. This tax begins on the day you register your car at DMV, but the tax bill comes out in the following year. A bill that is not delinquent can be paid in in quarterly installments. It is different from the sales tax on the car you pay only once to DMV upon purchase. The car tax ends when your registration terminates or you turn in the plates, although, again, you will be billed for it in the following year. *See the last section for more on how this works.
How the tax is calculated. The tax is based on a formula using the value of the car as determined by the state, the tax rate (Providence's tax rate is $60 per thousand of value), minus the exemption for value ($1,000) and divided the number of days in a calendar year out of 365 that the registration is active.
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.
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 for a full year. If it was registered for half the year (182 days) the tax would be $120.
Privately owned cars are billed to the individual; leased cars are usually billed to the leasing company.
Out of state or foreign students who register a car in Rhode Island are not exempt from the tax. Active duty military who claim RI as your domicile are not exempt from this tax.
Failure to pay the tax by the quarterly deadline. Once a quarterly payment deadline is missed, the account is considered delinquent. Failure to pay any quarterly installment will result in interest charges and the acceleration of the entire annual tax. In addition, the City will place a block on your registration renewal for that car and any others also registered to you. Your registration is not blocked if just your current bill is delinquent.
If registration renewal is blocked by DMV for failure to pay the tax: you need to pay the tax in full AND request clearance from this office. If you have a registration block and you are not behind in your tax, contact us for a clearance.
How interest is calculated. City ordinance 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.
Example of interest accrual:
If you have a $400 annual tax ($100 quarterly payments) and miss the third installment of $100 in January, the tax payment due in February will be $216.00. (Third and fourth quarter's installment of $100 each, plus 8% interest on $200, or $16.) The only way to prevent interest from accruing further is to pay the account off in its entirety.
The assessed value of your car is set by the state, not the city. Appeals. The resource RI DMV uses is the National Automobile Dealers Association (NADA) "clean resale value." While you may appeal the bill, you cannot appeal the tax based on condition of the car, mileage or sale price. Appeals should be directed to the City Assessor. Consult the back of the tax bill or www.providenceri.com/assessor. Appeals must be made 30 days after the mailing of the bill. The deadline to submit an appeal is August 24, 2014.
Notify DMV within 10 days of moving or disposal of the vehicle. 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 at www.dmv.ri.gov. Submitting the change of address form will update local municipalities as well as take 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.)
Upon sale or disposal promptly turn in in your license plates or else 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 terminate 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.
* The current (2014) bill is for vehicles you owned in calendar year 2013.
The car tax is figured on what vehicles you owned last calendar year. So, whatever is in the DMV database (what cars you own, what town the registration is in) in 2013 will receive a bill in June 2014, and the first quarter is payable on July 24, 2014.
A car registered at the DMV in January, 2013 will not be assessed by DMV until December 31, 2013 and the first tax due on that car will be July 24, 2014. In this example there is a 17 month lag time before you receive a bill.
If you move: Let's suppose you move out of state on October 31, 2013 and turn in your RI plates on November 1, 2013. On December 31, 2013, DMV will assess taxes on that car for January through October and a partial (10 month) bill will go to your last RI address in June 2014 with the first payment due July 24, 2014. But if you moved from Providence to another town in RI, the entire tax year would be payable to the town where your car was registered as of December 31, 2013.