Summary — HB 6090 (Substitute A): Amendments to Tax Classification Law (R.I. Gen. Laws § 44-5-11.8)
Status: Enacted (Sub A); effective 06/26/2025 (effective without Governor’s signature)
Introduced (Sub A): March 14, 2025 (Rep. Tina L. Spears)
Primary change: Revises and clarifies municipal authority and limits for adopting property tax classification plans after revaluation
Purpose / Intent
The Substitute A to HB 6090 updates Rhode Island’s statute governing municipal tax classification (§ 44-5-11.8). It sets uniform limits and procedures for cities and towns that adopt classification plans after a comprehensive revaluation or update, clarifies class definitions, preserves certain municipal exceptions, and ties some exceptions to specific towns and dates.
Key provisions and changes
- Municipal adoption timing: A city or town may adopt a tax classification plan by ordinance only after completing a comprehensive revaluation or an update (per § 44-5-11.6).
- Rate differential cap (general rule): Except for designated exceptions (Providence, Glocester, East Greenwich), the effective tax rate applicable to any class (excluding Class 4/motor vehicles) may not exceed by more than 50% the rate applicable to any other class.
- Post-revaluation transitional rule: In the year following a revaluation/update, municipalities may set the rate for all ratable tangible personal property (Class 3) at up to twice the rate for any other class — but only with documentation and written approval from the Office of Municipal Affairs that the increase is necessary to avoid a reduction in the estimated tax levy on that class due to the revaluation.
- Uniform percentage changes: Year-to-year tax rate changes must, generally, apply as the same percentage change to all classes (excluding Class 4), with the same municipal exceptions noted above.
- Specific statutory notes: Wholesale/retail inventory (within Class 3) is governed by § 44-3-29.1; motor vehicles (Class 4) governed by separate law.
- Reporting/compliance: Property tax and fiscal disclosure rules in chapter 35 apply to classification restrictions.
Class definitions (as amended)
- Class 1 — Residential real estate (≤ 5 dwelling units), open space, dwellings on leased land (incl. mobile homes). In Providence, Class 1 may include partial-commercial residential properties and >5-unit residential properties.
- Homestead exemption authorized; the effective rate after exemption is treated as the standard Class 1 rate for differential calculations (with exceptions for Glocester and Providence).
- Municipalities may instead split Class 1 into owner-occupied vs. non-owner-occupied rates (owner-occupied treated as standard rate for comparisons).
- Class 2 — Commercial and industrial real estate; partial-commercial residential and >5-unit residential properties (except Providence may include them in Class 1).
- Class 3 — All ratable tangible personal property.
- Class 4 — Motor vehicles and trailers subject to excise tax.
Town-specific exceptions and special authorizations
The bill preserves or restates special rules/authorities for particular towns (Glocester, East Greenwich, Middletown, Little Compton, Scituate, Coventry, New Shoreham, etc.), including different allowable differentials, special homestead exemption rules (e.g., Glocester may set homestead exemptions up to 50% of value), and historical effective dates for those exceptions.
Who is affected
- Municipal governments (city/town councils) — gain clarified authority and constraints for adopting classification plans after revaluations and must coordinate with the Office of Municipal Affairs for certain rate adjustments.
- Property owners — residential, commercial/industrial, tangible personal property, and motor vehicle taxpayers may see different tax-rate options and limits that affect tax burden distribution following municipal classification decisions.
- State Office of Municipal Affairs — increased review/approval role for certain post-revaluation rate actions.
Procedural/timeline notes
- Substitute A was introduced March 14, 2025, referred to House Municipal Government & Housing, and subsequently enacted effective June 26, 2025.
- Municipalities may only adopt classification plans after completing a comprehensive revaluation or update as required by state law.
If you want, I can extract just the provision text that applies to a particular town (e.g., Glocester or East Greenwich) or provide examples showing how the 50% cap or post-revaluation 2x allowance would affect hypothetical tax-rate allocations.
