97% fail when they appeal vehicle value for RI car tax

Vehicle Value Commission member: 'Do I think it’s fair? Not for everybody, no'

PROVIDENCE, R.I. (WPRI) – Only three percent of people who appealed their cars’ state-assessed value with an obscure commission had any success in the last three years, a Target 12 analysis of data reveals.

The R.I. Vehicle Value Commission sets the values of cars used by cities and towns to calculate a resident’s car tax bill. According to the commission, between 2014 and 2016, 704 people filed an appeal of their vehicle’s value, which is based on the National Automobile Dealers Association (NADA) guide.

Of those 704 people, only 24 were able to get the commission to reduce the value of their car.

Rhode Island law states that the commission is to use the “average retail price” of a car when setting the criteria for a vehicle’s value, using a guide “such as” the NADA handbook. The commission uses the highest assumed value of a car from the NADA guide, which is called “clean retail value.”

Linda Cwiek, the chairwoman of the commission and tax assessor for the town of North Kingstown, said that’s because when the law was written the NADA book used the wording “average,” but the language has since been changed to “clean retail.”

If a resident feels his or her car is overvalued by the state, the resident can file an appeal with the commission through the local tax assessor. But the form makes it clear that the seven-member commission will not consider a car’s condition or mileage in the appeal.

Warwick Tax Assessor Christopher Celeste, who was appointed to the commission just over a year ago, said appellants never actually go before the group to plead their cases.

“I am honest with them and say, ‘Look, you’re not going to be able to go there with a picture of your car, nobody is going to come look at your car,’” Celeste said. “None of that is going to happen.”

Celeste said the commission simply checks whether or not the number from the NADA database – housed at the R.I. Division of Motor Vehicles – was accurately transferred to a car tax bill. That, he said, is how the majority of people who succeed with their appeals manage to win: the commission spots a clerical error.

“Do I think it’s fair? Not for everybody, no,” Celeste said. But he and Cwiek insisted they are bound by state law and can do little to give motorists relief.

Critics, like the ACLU of Rhode Island, disagree. ACLU officials have testified before the commission – which annually determines the regulations for how a car’s value is determined – and urged its members to consider other factors not addressed in the statute, such as by adopting a more progressive scale based on a vehicle’s age.

“Like the weather, it appears that everybody in Rhode Island loves to talk about the state’s car tax but nobody ends up actually doing anything about it,” ACLU officials wrote last October. “The Vehicle Value Commission has the power to do something about it, and bears responsibility for the frustration and, sometimes, anger that taxpayers in the state have about it.”

Celeste argued that mileage and condition can’t be considered because with about 1 million cars on the road in the state, the commission couldn’t inspect each one.

“It’s impossible to do,” he said.

Celeste also said any tweaks made at the commission level would have a catastrophic effect on municipalities’ tax revenue. That’s because state law prevents a city or town from raising the tax rate beyond $60 per $1,000 of a car’s assessed value.

“If you shuffle motor vehicle values around, the town doesn’t have the opportunity to change its tax rate in order to generate that revenue. So it’s going to go on the backs of real estate,” Celeste said, suggesting property taxes on homes and businesses would rise to make up the gap.

Providence resident Bruce Schaller became one of the 704 appellants after he received a tax bill for his used, slightly banged-up 2007 Subaru with 125,000 miles on it.

When Schaller got his denial back in the mail, someone at the commission had highlighted the section of the form that states “there are NO provisions to permit adjustment of the excise value due to physical condition, high mileage, and/or cost of acquisition.”

“I would like to be able to pay a fair amount,” Schaller said. “If the tax is based on real value, I want to pay a tax on real value. I don’t want just a guess out of a book.”

Despite losing his appeal, and the overwhelming odds that it will likely lead to a denial, Schaller said he still thinks more people should file an appeal.

“If more people appeal, it will be recognized as a problem,” he said.

Mass. appeal

Unlike Rhode Island with its patchwork of town-by-town tax rates up to the $60 cap, the state of Massachusetts has a uniform rate and a far more progressive system for assessing a car’s value.

A look at the two states’ capital cities shows the difference. In Providence, a 2014 Honda Civic with a clean retail value of $12,900 would trigger a car tax bill of $654 last year. Register the same car in Boston, and the bill would be just $288.

That’s because Massachusetts uses a sliding scale based on the manufacturer’s suggested retail price (MSRP), the value of the car when. A one-year-old car is valued at 90% of MSRP, three years old is 40%, and any car five years or older is valued at just 10%.

On top of that, every city and town in Massachusetts charges the same rate: $25 per $1,000 of assessed value. In Providence, by contrast, the rate is $60, though the city also exempts the first $2,000 of assessed value.

“The Massachusetts model is talked about a lot because it’s very defensible and based on MSRP,” Celeste said. “It’s a published number that doesn’t vary.”

He added, “a brand new [Toyota] Camry is $32,000 and it always is; then they just depreciate that based on age.”

The Vehicle Value Commission pays NADA $22,000 every year to use its database and to print books that are sent to local tax assessors.

Per law, the governor names five local tax officials to sit on the commission – one of them has to be from a municipality with more than 50,000 people and another from a community with fewer than 10,000. Another seat goes to the head of the R.I. Department of Revenue, and the governor appoints a car dealer for the final spot. The positions are unpaid and come with a three-year term.

The commission meets beginning around June or July and stops in February, according Department of Revenue spokesman Paul Grimaldi.

Gov. Gina Raimondo and House Speaker Nicholas Mattiello are both pushing significant reductions in the car tax, with Raimondo proposing to cut it 30% starting next year and Mattiello proposing to eliminate it entirely over the next six years. Mattiello has said he will unveil his plan in the coming weeks so it can be included in the 2017-18 state budget.

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook