Bill Sponsors
Donovan, and Speakman
Committee
House Municipal Government & Housing
Summary
Select
This legislation amends Rhode Island tax laws specifically for the town of Bristol. It grants the Bristol Town Council the authority to adopt a tax classification plan that allows residential properties containing partial commercial or business uses to be taxed at the residential rate (Class 1), provided the property is owner-occupied. Additionally, it allows Bristol to set tax rates for different classes of property that may exceed the standard state limit regarding the percentage difference between classes. The bill empowers the town to adopt, repeal, or modify this plan for taxes assessed on or after December 31, 2023.
Sponsor
Analysis
Pros for Progressives
- Supports small, local economic stability by allowing owner-occupied mixed-use properties (often small family businesses) to be taxed at the lower residential rate rather than the higher commercial rate.
- Enhances local control by empowering the municipal government to structure tax levies in a way that best suits the specific needs and demographics of the Bristol community rather than adhering to a rigid one-size-fits-all state mandate.
- May help prevent gentrification and displacement by reducing the tax burden on residents who live in and operate businesses from their properties, helping them afford to stay in their neighborhoods.
Cons for Progressives
- Creates a fragmented tax system where residents in Bristol operate under different rules than those in neighboring towns, potentially leading to inequities in how similar properties are treated across the state.
- By potentially lowering taxes for mixed-use owners, the tax burden may shift to other groups, such as renters or owners of purely residential properties, to maintain the town's revenue requirements for public services.
- Granting the town the ability to exceed standard tax rate differentials could eventually lead to unstable tax policies that fluctuate with the political makeup of the town council, creating uncertainty for community planning.
Pros for Conservatives
- Promotes the principle of decentralization by transferring decision-making power from the state legislature to the local town council, allowing for more localized governance.
- Encourages entrepreneurship and protects property rights by ensuring that homeowners who utilize their property for business are not penalized with excessive commercial tax rates.
- Provides financial relief to property owners by potentially lowering the tax liability for mixed-use owner-occupied buildings, keeping more capital in the hands of private citizens.
Cons for Conservatives
- Removes the state-mandated cap on tax rate differentials, effectively giving the local government the power to drastically increase tax rates on commercial properties to subsidize residential owners.
- Creates an unpredictable business environment by allowing the town council to adopt, repeal, or modify the tax plan at will, making long-term financial planning difficult for property owners.
- Violates the concept of uniform taxation by carving out special exemptions for specific towns, rather than applying a consistent rule of law across the entire state.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Bristol homeowners
- Small business owners in Bristol
- Bristol Town Council
- Owners of mixed-use properties
- Bristol taxpayers
Towns Affected
Bristol
Cost to Taxpayers
None
Revenue Generated
None
BillBuddy Impact Ratings
Importance
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Freedom Impact
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Public Services
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Regulatory
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Clarity of Bill Language
How clear the language of the bill is. Higher ambiguity equals a lower score.
Enforcement Provisions
Measures enforcement provisions and penalties for non-compliance (if applicable).
Environmental Impact
Impact the bill will have on the environment, positive or negative.
Privacy Impact
Impact the bill is likely to have on the privacy of individuals.
Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/09/2026 Introduced, referred to House Municipal Government & Housing
Bill Text
SECTION 1. Section 44-5-11.8 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" is hereby amended to read as follows:
44-5-11.8. Tax classification.
(a) Upon the completion of any comprehensive revaluation or any update, in accordance with § 44-5-11.6, any city or town may adopt a tax classification plan, by ordinance, with the following limitations:
(1) The designated classes of property shall be limited to the classes as defined in subsection (b) of this section.
(2) The effective tax rate applicable to any class, excluding class 4, shall not exceed by fifty percent (50%) the rate applicable to any other class, except in the city of Providence and the town of Glocester and the town of East Greenwich and the town of Bristol; however, in the year following a revaluation or statistical revaluation or update, the city or town council of any municipality may, by ordinance, adopt tax rates for the property class for all ratable tangible personal property no greater than twice the rate applicable to any other class, provided that the municipality documents to, and receives written approval from, the office of municipal affairs that the rate difference is necessary to ensure that the estimated tax levy on the property class for all ratable tangible personal property is not reduced from the prior year as a result of the revaluation or statistical revaluation.
(3) Any tax rate changes from one year to the next shall be applied such that the same percentage rate change is applicable to all classes, excluding class 4, except in the city of Providence and the town of Glocester and the town of East Greenwich.
(4) Notwithstanding subsections (a)(2) and (a)(3) of this section, the tax rates applicable to wholesale and retail inventory within Class 3 as defined in subsection (b) of this section are governed by § 44-3-29.1.
(5) The tax rates applicable to motor vehicles within Class 4, as defined in subsection (b) of this section, are governed by § 44-34.1-1 [repealed].
(6) The provisions of chapter 35 of this title relating to property tax and fiscal disclosure apply to the reporting of, and compliance with, these classification restrictions.
(b) Classes of property.
(1) Class 1: Residential real estate consisting of no more than five (5) dwelling units; land classified as open space; and dwellings on leased land including mobile homes. In the city of Providence, this class may also include residential properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units.
(i) A homestead exemption provision is also authorized within this class; provided however, that the actual, effective rate applicable to property qualifying for this exemption shall be construed as the standard rate for this class against which the maximum rate applicable to another class shall be determined, except in the town of Glocester and the city of Providence. In the town of Bristol, this class may also include residential properties containing partial commercial or business uses where the residential portion is owner-occupied.
(ii) In lieu of a homestead exemption, any city or town may divide this class into non- owner and owner-occupied property and adopt separate tax rates in compliance with the within tax rate restrictions; provided, however, that the owner-occupied rate shall be construed as the standard rate for this class against which the maximum rate applicable to another class shall be determined, except in the town of Glocester and the city of Providence.
(2) Class 2: Commercial and industrial real estate; residential properties containing partial commercial or business uses; and residential real estate of more than five (5) dwelling units. In the city of Providence, properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units may be included in Class 1.
(3) Class 3: All ratable, tangible personal property.
(4) Class 4: Motor vehicles and trailers subject to the excise tax created by chapter 34 of this title.
(c) The town council of the town of Glocester and the town council of the town of East Greenwich may, by ordinance, provide for, and adopt, a tax rate on various classes as they shall LC003159 - Page 2 of 5 deem appropriate. Provided, that the tax rate for Class 2 shall not be more than two (2) times the tax rate of Class 1 and the tax rate applicable to Class 3 shall not exceed the tax rate of Class 1 by more than two hundred percent (200%). Glocester shall be able to establish homestead exemptions up to fifty percent (50%) of value and the calculation provided in subsection (b)(1)(i) shall not be used in setting the differential tax rates.
(d) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2002.
(e) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section and the provisions of § 44-5-79, to be applicable to taxes assessed on or after the assessment date of December 31, 2004.
(f) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent (50%) of value to one hundred percent (100%) of value on residential and commercial/industrial/mixed- use property, while tangible property is assessed at one hundred percent (100%) of cost, less depreciation; provided, however, the tax rate for Class 3 (tangible) property shall not exceed the tax rate for Class 1 (residential) property by more than two hundred thirteen percent (213%). This provision shall apply whether or not the fiscal year is also a revaluation year.
(g) Notwithstanding the provisions of subsections (a) and (b) of this section, the town council of the town of Coventry may hereafter, by ordinance, adopt a tax classification plan providing that Class 1, as set forth in subsection (b) “Classes of Property” of this section, may also include residential properties containing commercial or business uses, such ordinance to be applicable to taxes assessed on or after the assessment date of December 31, 2014.
(h) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of East Greenwich may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2018. Further, the East Greenwich town council may adopt, repeal, or modify that tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
(i) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or LC003159 - Page 3 of 5 after the assessment date of December 31, 2022. If, in lieu of a homestead exemption, the town of Middletown adopts a tax classification plan that divides the class consisting of residential real estate into non-owner and owner-occupied property and adopts separate tax rates in compliance with the tax rate restrictions, the town of Middletown, by ordinance or resolution, shall provide rules and regulations including, but not limited to, those governing the division and definition of non-owner and owner-occupied properties.
(j) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of New Shoreham may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2023. If, in lieu of a homestead exemption, the town of New Shoreham adopts a tax classification plan which divides the class consisting of residential real estate into non-owner and owner-occupied property and adopts separate tax rates in compliance with the tax rate restrictions, the town of New Shoreham, by ordinance or resolution, shall provide rules and regulations including, but not limited to, those governing the division and definition of non-owner and owner-occupied properties.
(k) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Bristol may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2023. Further, the Bristol town council may adopt, repeal, or modify that tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
(l) The city council of the city of Providence may, by ordinance, provide for, and adopt, a tax rate on various classes as they shall deem appropriate. Provided, that the provisions of § 44-5- 11.18(4) shall apply.
SECTION 2. This act shall take effect upon passage.
44-5-11.8. Tax classification.
(a) Upon the completion of any comprehensive revaluation or any update, in accordance with § 44-5-11.6, any city or town may adopt a tax classification plan, by ordinance, with the following limitations:
(1) The designated classes of property shall be limited to the classes as defined in subsection (b) of this section.
(2) The effective tax rate applicable to any class, excluding class 4, shall not exceed by fifty percent (50%) the rate applicable to any other class, except in the city of Providence and the town of Glocester and the town of East Greenwich and the town of Bristol; however, in the year following a revaluation or statistical revaluation or update, the city or town council of any municipality may, by ordinance, adopt tax rates for the property class for all ratable tangible personal property no greater than twice the rate applicable to any other class, provided that the municipality documents to, and receives written approval from, the office of municipal affairs that the rate difference is necessary to ensure that the estimated tax levy on the property class for all ratable tangible personal property is not reduced from the prior year as a result of the revaluation or statistical revaluation.
(3) Any tax rate changes from one year to the next shall be applied such that the same percentage rate change is applicable to all classes, excluding class 4, except in the city of Providence and the town of Glocester and the town of East Greenwich.
(4) Notwithstanding subsections (a)(2) and (a)(3) of this section, the tax rates applicable to wholesale and retail inventory within Class 3 as defined in subsection (b) of this section are governed by § 44-3-29.1.
(5) The tax rates applicable to motor vehicles within Class 4, as defined in subsection (b) of this section, are governed by § 44-34.1-1 [repealed].
(6) The provisions of chapter 35 of this title relating to property tax and fiscal disclosure apply to the reporting of, and compliance with, these classification restrictions.
(b) Classes of property.
(1) Class 1: Residential real estate consisting of no more than five (5) dwelling units; land classified as open space; and dwellings on leased land including mobile homes. In the city of Providence, this class may also include residential properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units.
(i) A homestead exemption provision is also authorized within this class; provided however, that the actual, effective rate applicable to property qualifying for this exemption shall be construed as the standard rate for this class against which the maximum rate applicable to another class shall be determined, except in the town of Glocester and the city of Providence. In the town of Bristol, this class may also include residential properties containing partial commercial or business uses where the residential portion is owner-occupied.
(ii) In lieu of a homestead exemption, any city or town may divide this class into non- owner and owner-occupied property and adopt separate tax rates in compliance with the within tax rate restrictions; provided, however, that the owner-occupied rate shall be construed as the standard rate for this class against which the maximum rate applicable to another class shall be determined, except in the town of Glocester and the city of Providence.
(2) Class 2: Commercial and industrial real estate; residential properties containing partial commercial or business uses; and residential real estate of more than five (5) dwelling units. In the city of Providence, properties containing partial commercial or business uses and residential real estate of more than five (5) dwelling units may be included in Class 1.
(3) Class 3: All ratable, tangible personal property.
(4) Class 4: Motor vehicles and trailers subject to the excise tax created by chapter 34 of this title.
(c) The town council of the town of Glocester and the town council of the town of East Greenwich may, by ordinance, provide for, and adopt, a tax rate on various classes as they shall LC003159 - Page 2 of 5 deem appropriate. Provided, that the tax rate for Class 2 shall not be more than two (2) times the tax rate of Class 1 and the tax rate applicable to Class 3 shall not exceed the tax rate of Class 1 by more than two hundred percent (200%). Glocester shall be able to establish homestead exemptions up to fifty percent (50%) of value and the calculation provided in subsection (b)(1)(i) shall not be used in setting the differential tax rates.
(d) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2002.
(e) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section and the provisions of § 44-5-79, to be applicable to taxes assessed on or after the assessment date of December 31, 2004.
(f) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Scituate may hereafter, by ordinance, change its tax assessment from fifty percent (50%) of value to one hundred percent (100%) of value on residential and commercial/industrial/mixed- use property, while tangible property is assessed at one hundred percent (100%) of cost, less depreciation; provided, however, the tax rate for Class 3 (tangible) property shall not exceed the tax rate for Class 1 (residential) property by more than two hundred thirteen percent (213%). This provision shall apply whether or not the fiscal year is also a revaluation year.
(g) Notwithstanding the provisions of subsections (a) and (b) of this section, the town council of the town of Coventry may hereafter, by ordinance, adopt a tax classification plan providing that Class 1, as set forth in subsection (b) “Classes of Property” of this section, may also include residential properties containing commercial or business uses, such ordinance to be applicable to taxes assessed on or after the assessment date of December 31, 2014.
(h) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of East Greenwich may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2018. Further, the East Greenwich town council may adopt, repeal, or modify that tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
(i) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or LC003159 - Page 3 of 5 after the assessment date of December 31, 2022. If, in lieu of a homestead exemption, the town of Middletown adopts a tax classification plan that divides the class consisting of residential real estate into non-owner and owner-occupied property and adopts separate tax rates in compliance with the tax rate restrictions, the town of Middletown, by ordinance or resolution, shall provide rules and regulations including, but not limited to, those governing the division and definition of non-owner and owner-occupied properties.
(j) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of New Shoreham may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2023. If, in lieu of a homestead exemption, the town of New Shoreham adopts a tax classification plan which divides the class consisting of residential real estate into non-owner and owner-occupied property and adopts separate tax rates in compliance with the tax rate restrictions, the town of New Shoreham, by ordinance or resolution, shall provide rules and regulations including, but not limited to, those governing the division and definition of non-owner and owner-occupied properties.
(k) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Bristol may hereafter, by ordinance, adopt a tax classification plan in accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes assessed on or after the assessment date of December 31, 2023. Further, the Bristol town council may adopt, repeal, or modify that tax classification plan for any tax year thereafter, notwithstanding the provisions of subsection (a) of this section.
(l) The city council of the city of Providence may, by ordinance, provide for, and adopt, a tax rate on various classes as they shall deem appropriate. Provided, that the provisions of § 44-5- 11.18(4) shall apply.
SECTION 2. This act shall take effect upon passage.