Bill Sponsors
McGaw, and Cortvriend
Committee
House Municipal Government & Housing
Summary
Select
This legislation amends Rhode Island tax laws to specifically authorize the town of Portsmouth to adopt a tax classification plan. Starting with taxes assessed on or after December 31, 2026, the Portsmouth town council may pass ordinances to establish different tax rates for different classes of property (such as residential versus commercial). The bill also grants the town council the flexibility to adopt, repeal, or modify this tax classification plan for any subsequent tax years, exempting it from certain standard statutory restrictions regarding the timing of such adoptions.
Sponsor
Analysis
Pros for Progressives
- Empowers the local government to shift the tax burden away from residential homeowners, potentially making housing more affordable for families.
- Allows the town to implement a tax structure that asks commercial entities and investment property owners to contribute a larger share to the community's welfare.
- Promotes local autonomy by allowing the community to decide its own revenue generation strategies based on its specific economic needs rather than a statewide mandate.
Cons for Progressives
- Does not mandate that any tax relief be directed specifically toward low-income residents or renters, leaving the distribution of benefits entirely to the discretion of the town council.
- Could potentially harm small, locally-owned businesses if the commercial tax rate is raised significantly to subsidize residential rates.
- Lacks specific requirements for the tax plan to include incentives for environmentally sustainable practices or affordable housing development.
Pros for Conservatives
- Strengthens the principle of home rule by granting the local town council the authority to determine its own tax structure without rigid state interference.
- Provides the municipality with a fiscal tool to manage its budget and revenue requirements locally, potentially avoiding the need for state-level financial intervention.
- Includes provisions allowing the town council to repeal or modify the plan in future years, ensuring the policy remains flexible and responsive to the will of the local voters.
Cons for Conservatives
- Empowers the government to pick winners and losers by taxing different classes of property owners at unequal rates, rather than applying a flat, uniform tax rate.
- Creates a risk of higher tax burdens on businesses, which could discourage economic development and investment within the town.
- Increases uncertainty for property owners and investors, as the town council is granted broad discretion to change tax classification rules annually.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Portsmouth Residential Homeowners
- Portsmouth Commercial Property Owners
- Portsmouth Business Owners
- Portsmouth Town Council
- Real Estate Investors
Towns Affected
Portsmouth
Cost to Taxpayers
None
Revenue Generated
None
BillBuddy Impact Ratings
Importance
Measures population affected and overall level of impact.
Freedom Impact
Level of individual freedom impacted by the bill.
Public Services
How much the bill is likely to impact one or more public services.
Regulatory
Estimated regulatory burden imposed on the subject(s) of the bill.
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
• 02/11/2026 Introduced, referred to House Municipal Government & Housing
• 02/19/2026 Scheduled for hearing and/or consideration (02/26/2026)
• 02/26/2026 Committee recommended measure be held for further study
• 02/27/2026 Scheduled for consideration (03/05/2026)
• 03/05/2026 Committee recommends passage
• 03/06/2026 Placed on House Calendar (03/12/2026)
• 03/12/2026 House read and passed
• 03/13/2026 Referred to Senate Housing and Municipal Government
• 03/27/2026 Scheduled for consideration (04/02/2026)
• 04/02/2026 Committee recommends passage in concurrence
• 04/24/2026 Placed on the Senate Consent Calendar (04/28/2026)
• 04/28/2026 Senate passed in concurrence
• 04/28/2026 Transmitted to Governor
• 05/06/2026 Effective without Governor's signature
• 02/19/2026 Scheduled for hearing and/or consideration (02/26/2026)
• 02/26/2026 Committee recommended measure be held for further study
• 02/27/2026 Scheduled for consideration (03/05/2026)
• 03/05/2026 Committee recommends passage
• 03/06/2026 Placed on House Calendar (03/12/2026)
• 03/12/2026 House read and passed
• 03/13/2026 Referred to Senate Housing and Municipal Government
• 03/27/2026 Scheduled for consideration (04/02/2026)
• 04/02/2026 Committee recommends passage in concurrence
• 04/24/2026 Placed on the Senate Consent Calendar (04/28/2026)
• 04/28/2026 Senate passed in concurrence
• 04/28/2026 Transmitted to Governor
• 05/06/2026 Effective without Governor's signature
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; 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.
(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 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 LC005089 - Page 2 of 5 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 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 LC005089 - Page 3 of 5 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.
(m) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Portsmouth 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, 2026. Further, the Portsmouth 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.
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; 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.
(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 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 LC005089 - Page 2 of 5 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 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 LC005089 - Page 3 of 5 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.
(m) Notwithstanding the provisions of subsection (a) of this section, the town council of the town of Portsmouth 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, 2026. Further, the Portsmouth 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.
SECTION 2. This act shall take effect upon passage.