EAST GREENWICH—Numerous members of the community, both past and present, have raised concerns about the payment process regarding delinquent motor vehicle excise taxes. Currently, the town authorizes a 12 percent yearly fee on delinquent taxes, but numerous residents have complained about being surprised with unexpected bills after being informed that their DMV accounts had been blocked. Town Manager Andy Nota addressed the issue at a town council meeting on Monday.
“Any time that an individual has a vehicle that is registered within the community, whether they presently reside here or previously did, who holds back taxes on that particular vehicle, it is up to the individual municipality to reach out to the DMV to place a block on their account,” Nota said. “We are pulling together information on how consistently or inconsistently that option has been exercised in the community. We’ve come to the conclusion that it really has not been exercised significantly.”
Regardless of the regularity of the process of locking accounts based on delinquent payments, Nota stressed that residents had ample information on the process given quarterly mailed notices of delinquency and affirmation of the same on annual tax bills. The town will, however, be installing a lockbox on the rear side of town hall for residents to drop off payments at any time.
Predicting requests for leniency and in light of a push to amend current legislation to allow for a waiver to avoid the fees, Nota’s report made clear that the town will not be pursuing a change.
“It is my belief that considering a change in this policy, to allow for waiver of interest, would have significant financial and equity implications for all taxpayers in town,” Nota wrote in his report. “It is a common perspective among municipalities that the current policy of full enforcement of the state law and related procedures are clear, consistent, fair and equitable.”
Under current state law, the town is allowed to charge up to 18 percent in annual interest on delinquent accounts and is not required to provide a grace period, which it does. As per current regulations of the Rhode Island Department of Motor Vehicles, if an individual has outstanding taxes and the town places a block on their account, they will not receive renewal notices and will not be allowed to renew their vehicle registration. If an individual has such a block on their account, they must pay the owed tax and interest in full and have the town send a clearance to the DMV.
The surprise of residents is likely due to the fact that previous town council’s have not opted to use the “Block Authorization” tool to force residents to cough up back taxes, while the current council has decided to pursue a policy of enforcing it in all cases. Nota hopes that the move will compel residents to pay taxes on time in the future, now that they know the block is in effect.
“In moving forward, we anticipate that cases involving back taxes will be reduced significantly in number,” Nota wrote, “once this initial wave of remaining cases is addressed.”
The move is likely to be met with little appreciation, as Rhode Island already boasts a reputation for over-taxation. Between income and sales tax alone, Rhode Island ranks 18th in the nation for highest taxes. Its widespread implementation of other taxes and fees such as the 8 percent meals tax, however, mean that Rhode Islanders end up paying far more out of pocket to the state than just what is on their tax forms.