Information on the car (excise) tax
The current (2012) bill is for vehicles you owned in calendar year 2011*
When it begins and ends. This tax begins when you register your car at DMV. It is paid to the City 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 you will be billed for it in the following year. *See the last section for more on how this works.
How the tax is figured. The tax is based on 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 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.
Failure to pay the tax. 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.
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.
For example, 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." There is a mechanism to appeal this, available through the City Assessor. Appeals must be made 30 days after the mailing of the bill.
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 here: www.dmv.ri.gov. Submitting the change of address form will update local municipalities; 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 (2012) bill is for vehicles you owned in calendar year 2011.
The car tax is figured on what vehicles you owned last year. So, whatever is in the DMV database (what cars you own, what town the registration is in) in 2012 will receive a bill in June 2013, and the first quarter is payable on July 24, 2013.
A car registered at the DMV in January, 2012 will not be assessed by DMV until December 31, 2012 and the first tax due on that car will be July 24, 2013. This 17 month lag time often presents confusion for the tax payer.
Let's suppose you move out of state 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 through October and a partial (10 month) bill will go to your last RI address in June 2013 with the first payment due July 24, 2013. But if you moved from Providence to Cranston and you kept the same plates, the entire tax year would be payable to the municipality where your car was registered as of December 31, 2012.