Bill Sponsors
Senator Linda L. Ujifusa
Committee
Senate Housing & Municipal Government
Summary
Select
This legislation amends Rhode Island's general laws regarding the levy and assessment of local taxes to specifically empower the town of Portsmouth. It grants the Portsmouth Town Council the authority to adopt a tax classification plan by ordinance. This new authority allows the town to establish different tax rates for different classes of property (such as residential versus commercial). The bill stipulates that this plan would apply to taxes assessed on or after December 31, 2026, and gives the council the flexibility to adopt, repeal, or modify the plan in subsequent tax years.
Sponsor
Analysis
Pros for Progressives
- Empowers the local government of Portsmouth to shift the tax burden away from residential homeowners, potentially providing financial relief to working-class families and those on fixed incomes.
- Enables the town to implement a tiered tax structure that could ensure commercial properties and large developments pay a fairer share of community costs compared to individual residents.
- Promotes local autonomy, allowing the community to tailor its revenue generation strategies to its specific economic needs rather than relying on a one-size-fits-all state mandate.
Cons for Progressives
- Creates a patchwork of tax laws across the state, potentially leading to inequitable treatment of residents and businesses depending solely on which town they are located in.
- Does not mandate that the tax classification be used to assist low-income residents, leaving open the possibility that the tool could be used in ways that do not advance economic justice.
- If the town chooses to tax residential rental properties at a higher commercial rate (if classified as such), costs could be passed down to tenants, negatively impacting affordable housing.
Pros for Conservatives
- Supports the principle of home rule and decentralization by transferring decision-making power from the state legislature to the locally elected town council.
- Provides the town with the flexibility to adjust tax structures in response to local economic conditions without requiring constant state-level intervention.
- Allows the local government to potentially lower commercial tax rates if they choose, which could be used to attract business and stimulate the local economy.
Cons for Conservatives
- Opens the door for the town to impose significantly higher tax rates on businesses (split roll taxation), which is often viewed as anti-business and detrimental to economic growth.
- Violates the principle of uniform taxation by allowing the government to pick winners and losers by taxing different property classes at different rates.
- Introduces regulatory uncertainty for property owners, as the bill allows the council to adopt, repeal, or modify the tax plan annually, making long-term financial planning difficult.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Portsmouth Residential Property Owners
- Portsmouth Commercial Property Owners
- Portsmouth Town Council
- Real Estate Developers in Portsmouth
- Portsmouth Renters
Towns Affected
Portsmouth
Cost to Taxpayers
None
Revenue Generated
None
BillBuddy Impact Ratings
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Freedom Impact
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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
• 02/13/2026 Introduced, referred to Senate Housing and Municipal Government
• 03/09/2026 Scheduled for hearing and/or consideration (03/12/2026)
• 03/12/2026 Committee recommends passage
• 03/26/2026 Placed on Senate Calendar (03/31/2026)
• 03/31/2026 Senate read and passed
• 04/01/2026 Referred to House Municipal Government & Housing
• 04/10/2026 Scheduled for consideration (04/15/2026)
• 04/15/2026 Committee recommends passage in concurrence
• 04/24/2026 Placed on the House Consent Calendar (04/28/2026)
• 04/28/2026 House passed in concurrence
• 04/28/2026 Transmitted to Governor
• 05/06/2026 Effective without Governor's signature
• 03/09/2026 Scheduled for hearing and/or consideration (03/12/2026)
• 03/12/2026 Committee recommends passage
• 03/26/2026 Placed on Senate Calendar (03/31/2026)
• 03/31/2026 Senate read and passed
• 04/01/2026 Referred to House Municipal Government & Housing
• 04/10/2026 Scheduled for consideration (04/15/2026)
• 04/15/2026 Committee recommends passage in concurrence
• 04/24/2026 Placed on the House Consent Calendar (04/28/2026)
• 04/28/2026 House 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 LC004951 - 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 LC004951 - 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 LC004951 - 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 LC004951 - 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.