The bill amends the "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998" to ensure that cities, towns, and fire districts in Rhode Island are reimbursed for lost tax revenue due to the phase-out of the excise tax. Starting in fiscal year 2024, these entities will receive state general revenue reimbursements equal to the lost tax revenue and will also receive a permanent distribution of sales tax revenue to compensate for the excise tax elimination. The bill specifies the reimbursement amounts for each city, town, and fire district for fiscal year 2024 and outlines the payment schedule, with 25% of the funds to be distributed on August 1, November 1, February 1, and May 1 of 2023 and 2024. Additionally, the director of revenue is authorized to adjust payments to ensure full compliance with the requirements.

The bill also includes a deletion, removing a provision that set a different reimbursement timeline for the city of East Providence starting in fiscal year 2025. With this deletion, East Providence will now follow the same reimbursement schedule as other municipalities. The bill is set to take effect upon passage, and the explanation by the legislative council clarifies that the purpose of the act is to align the reimbursement timeline for East Providence with that of other entities and to ensure that all are adequately compensated for the loss of revenue from the excise tax phase-out.

Statutes affected:
8226: 44-34.1-2