Car owners in Rhode Island must pay an annual excise tax to be able to register a vehicle. This excise tax will be phased out by 2024 but is currently an average of $20 for every $1,000 of your vehicle’s value.
Taxes—no one likes talking about them, and certainly no one likes paying them. But we pay them on everything from candy at the store to our airfare, homes, and cars.
That’s why Jerry
, the top-rated broker
for car insurance, has created this guide with everything you need to know about the excise tax in the Ocean State. We’ll go over how much you owe and how and where to pay. And as a bonus, we’ll even throw in some tips to help you find the best Rhode Island insurance rate
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What is an excise tax in Rhode Island?
If you are registering a vehicle in Rhode Island, you must pay a yearly excise tax to your local tax assessor’s office. This is an additional tax on top of the Rhode Island car sales tax, which is applied during the purchase of the vehicle.
An excise is a tax on certain goods at the time of their manufacture and is usually applied to items that pose a threat to one’s health or environment. That means you’ll often have to pay a little extra if you want to purchase goods like alcohol, cigarettes, and fuel. Vehicle emissions harm the environment, which is why motor vehicles have an excise tax.
You can find the exact Rhode Island excise tax legislation in Title 44, Chapter 34
of the State of Rhode Island General Laws, but we’ll simplify them for you here: Rhode Island vehicle excise tax will be phased out in 2024
The Rhode Island excise tax rate is approximately $20 per $1,000 of the vehicle’s value on average
The exact vehicle excise tax rate varies by Rhode Island municipality
The minimum legal excise tax is $5
The excise tax rate is calculated by the Rhode Island Vehicle Value Commission and is based on National Automobile Dealer Association (NADA) values
The excise tax is shall be paid for a full calendar year so long as the vehicle is still registered
You should receive an excise tax bill each year with payment instructions—online is the most common format. This tax goes to your local tax collector’s office and must be paid by the due date listed on your bill.
If you are unable to get to your DMV before your due date, you can reach out to the Division of Taxation by calling 401-574-8955 or email tax.excise@tax.ri.gov
to avoid penalty. How to calculate your excise tax
Different states determine the value of vehicles in different ways. Since the Rhode Island Vehicle Commission calculates it based on NADA values, it can be difficult to figure out how much you’ll be taxed ahead of time. On top of that, there is no statewide tax rate—it varies by municipality.
Resources are available on the NADA Consumer Vehicle Values
page to give you a general idea. Through their partnership with J.D. Power, you can research new and used car values so you can better prepare for your excise tax. Happily for you, the Rhode Island excise tax on motor vehicles is being phased out and will cease to exist in 2024. Lawmakers cite the inconsistencies of the tax rate across the state as the driving factor to create this tax relief and voted that the best course of action would be to eliminate it throughout the state.
How to save on car insurance in Rhode Island
From excise taxes to general maintenance, the expenses that come with owning a car can add up in a hurry. That’s why you need Jerry
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