§ 44-5-38 — § 44-5-38. Rate of levy against tangible personal property consisting of manufacturing machinery and equipment acquired or used by a manufacturer.

§ 44-5-38. Rate of levy against tangible personal property consisting of manufacturing machinery and equipment acquired or used by a manufacturer.

Tangible personal property consisting of manufacturing machinery and equipment acquired, owned, or used by a manufacturer is subject to taxation at a uniform rate of assessment not to exceed fifty percent (50%) of the full and fair cash value of the property. The levy and assessment of the tax upon the manufacturer's manufacturing machinery and equipment is subject to, and limited to, the following:

(1)(i) Assessment and levy on manufacturer's machinery and equipment. In assessing the valuation of the property and apportioning the levy of the tax on December 31, 1968, the assessors in the several cities and towns shall not exceed seventy-five percent (75%) of the total adjusted levy on the machinery, equipment, and inventories of all manufacturers of the city or town as established by the division of local and metropolitan government using the levy based on the assessment of the city or town as of December 31, 1966. In apportioning the levy as established in this subdivision, the assessor may add to the total adjusted levy, the increase in levy on manufacturer's machinery, equipment, and inventory occasioned by manufacturers found to be operating but not taxed in the city or town as of December 31, 1966, or who have located in the city or town since that date.

(ii) In apportioning the levy of the tax on manufacturers' machinery and equipment within a city or town for fiscal years ending after December 31, 1969, the assessors of any city or town shall apportion the levy of the tax in an amount not to exceed one hundred three and one-half percent (103.5%) of the total adjusted levy on manufacturer's machinery and equipment for the next prior fiscal year. In apportioning the levy of the tax, as provided in this subdivision, the assessors of any city or town may add to the total adjusted levy for the next prior fiscal year, the increase in levy on manufacturer's machinery and equipment occasioned by manufacturers who have located or who have increased investment within the meaning of subdivision (3) in the city or town since the date of the next prior assessment.

(2)(i) Assessment and levy on individual manufacturers. In assessing the valuation of the property and apportioning the levy of the tax on December 31, 1968, the assessors of the several cities and towns shall not exceed seventy-three and one-half percent (73.5%) of the adjusted levy of the tax on the machinery, equipment, and inventory of any manufacturer of the city or town for the next prior year. If the application of the preceding provision results in the total tax levy thus obtained on manufacturers' machinery and equipment of a city or town for the year for which the date of assessment of valuations was December 31, 1968, as the assessment of valuations is established under the provisions of the first paragraph of this section, being less in amount than the amount of the total adjusted levy as computed in accordance with the seventy-five percent (75%) limitation prescribed under the provisions of paragraph (1)(i) of this section, the assessor of the city or town, for the purpose of bringing the total levy on the machinery and equipment to an amount not exceeding the amount of the total adjusted levy as computed by the seventy-five percent (75%) limitation, may apply the amount of the total adjusted tax levy, as was thus limited and computed under the provisions of paragraph (1)(i) of this section, to the total assessed valuation as of December 31, 1968, as the valuation is established under the provisions of the first paragraph of this section, on the machinery and equipment of all manufacturers of the city or town, and apply the resulting classified tax rate to the assessed valuations as of December 31, 1968, on the machinery and equipment of each manufacturer of the city or town.

(ii) In assessing the valuation of the property and apportioning the levy of the tax for fiscal years ending after December 31, 1969, the assessors of the several cities and towns shall not exceed one hundred five percent (105%) of the adjusted levy of the tax on the machinery and equipment of any manufacturer for the next prior fiscal year.

(3) As to the property constituting an increase in investment, the limitations fixed in subdivisions (1) and (2) of this section do not apply to that portion of the tax levy on a manufacturer derived from a substantial increase in investment in additional machinery and equipment or that portion of the tax levy applicable to the property not previously taxed in the city or town. For the purposes of this section, "substantial� means an investment in any one year equal to at least fifteen percent (15%) of the sum of net book value plus accumulated reserves for depreciation of other machinery and equipment of the manufacturer within the city or town.

(4) When a city or town has completed a revaluation of all ratable property by independent professional appraisers since December 31, 1966, the assessor of the city or town shall, in applying the preceding limitations, employ the levy and assessment made for the fiscal year immediately following the completion of the revaluation in lieu of the base established as previously established by the division of local and metropolitan government; provided, that a base year later than a fiscal year commencing in 1969 is not employed.

(5) Nothing in this section affects any agreement for the stabilization or exemption of local taxes entered into under the provisions of § 44-3-9; provided, that any agreement may be modified to take into account the effect of § 44-11-2 by the city or town council and the manufacturer without the necessity of meeting the criteria and complying with the procedures established in § 44-3-9. Upon the expiration of any existing agreement, the tax on the property consisting of manufacturers' machinery, equipment, and inventory formerly stabilized or exempted under the agreement shall be based upon a new assessment complying with all the terms of this section.

(6) Each city or town has the option of using its general property tax rate in computing its levy on machinery and equipment of manufacturers or any separate rate, which it deems appropriate subject to the restrictions established in this section.

(7)(i) In order to assess accurately the impact of the provisions of this section upon the several cities and towns and to provide necessary information for that purpose, each manufacturer subject to taxation in any city or town shall submit to the division of local and metropolitan government on or before October 1, 1966, a declaration report on the value of machinery and equipment for each city or town in which the manufacturer is located; the declaration reports shall be submitted on a form designed and furnished by the division and shall provide for inclusion of the net book value and the accumulated reserve for depreciation of machinery and equipment subject to local taxation, all as reported in the manufacturers' most recent Rhode Island corporate tax return. The declaration report shall cover the most recent fiscal year of the taxpayer for which the due date for the filing of a corporate tax return with the tax administrator is prior to the date prescribed in this section for filing the report; provided, that where a manufacturer files a corporate tax return with the tax administrator on or prior to the date of October 1 for the fiscal year, the manufacturer shall file the declaration report on or before October 1.

(ii) On or before October 1, 1968, and annually thereafter, each manufacturer shall file with the office of the assessor of the city or town in which the property is situated, a declaration report, as described in paragraph (1)(i) of this section, on a form prescribed by the department of revenue and furnished to the local assessors. All reports shall be treated confidentially by the assessor and employed by him or her for assessment purposes only.

(iii) Failure to submit a declaration report to either the department of revenue or the tax assessor of any city or town as required in subdivision (1)(i) subjects the manufacturer to a penalty not to exceed ten percent (10%) of the tax on machinery and equipment payable at the time when the taxes are due and payable as an addition to the tax due in the next succeeding year and the penalty shall be so identified and listed on the tax roll. Should a manufacturing establishment fail to submit a declaration report for a second successive year, it is subject to a penalty not to exceed twenty-five percent (25%) of its tax on machinery and equipment, payable as prescribed; should a manufacturing establishment fail for a third successive year to file the declaration report it is subject to a penalty not to exceed fifty percent (50%) of the tax on its machinery and equipment, payable as prescribed; for subsequent successive years, failure to file the declaration report subjects the manufacturing establishment to a penalty not to exceed fifty percent (50%) of its tax on machinery and equipment, payable as prescribed. As to any manufacturer failing to file a declaration report with the local assessor as required in this section, the limitation of paragraph (2)(ii) of this section shall not take effect until the assessment date next following the date upon which the manufacturer first files a report with the assessor. In lieu of the declaration report, any manufacturer subject to taxation for the first time in any city or town of this state shall submit the information that is necessary to establish its initial tax base and, in subsequent years, shall file the declaration report.

(8) In any case where the assessor of any city or town has reason to doubt the veracity of the contents of any declaration report so filed, the report may be submitted to the department of revenue, which shall compare the information contained in the report with information on file with the division of taxation and advise the assessor as to the veracity of the report.

(9) A manufacturer who stores or keeps on hand raw materials, work in process, and his or her finished products in a storage place (as distinguished from finished products which he or she holds for retail sale in any retail establishment operated by him or her) in a city or town other than that in which his or her manufacturing plant is located shall file on or before March 15, 1969, and annually thereafter on or before each succeeding March 15, an inventory report on a form prescribed and furnished by the department of revenue through the assessor, with the assessor of the city or town where the raw materials and finished products are stored. The assessor of each city or town shall notify all manufacturers of the city or town of the requirement for filing the reports by publication in a newspaper of general circulation in the city or town during the month of January, 1969, and during the same month in each year thereafter. The report shall contain a true account of the raw materials, work in process, and finished products that were manufactured by him or her in this state as well as any other merchandise owned or possessed by him or her in the city or town on December 31 next preceding the date specified for the filing of the inventory report. The report must describe and specify the value of the raw materials, work in process, and finished products that were manufactured as already stated and also the value of all other merchandise stored in the city or town. Any manufacturer who fails or refuses to file any inventory report at the time and in the manner prescribed in this section is deemed to have waived the tax exemption provided for on the raw materials, work in process, and finished products thus stored, whereupon, and notwithstanding the provisions of § 44-3-3(20), the property is subject to taxation like all other taxable property. The provisions of this subdivision shall not be construed to repeal § 44-5-15 or to limit the application of its provisions.

(10) A manufacturer who operates storage facilities for the storage of his raw materials, work in process, and finished products in a city or town other than that in which his or her manufacturing plant is located shall set forth in the declaration report, as and in the manner prescribed in subdivision (7) of this section to be filed with the assessor of the city or town where the storage facilities are located, any machinery and equipment owned or possessed by him or her which is situated in or upon the storage facilities for use in the operation of the storage facilities, or held there for use in the operation of the manufacturing plant.

(11) The restrictions contained in this chapter shall not apply to the portion of the tax, if any, assessed by the city or town for the purpose of paying the indebtedness of the city or town and the indebtedness of the state or any political subdivision of the state to the extent assessed upon or apportioned to the city or town, and the interest thereon; and for appropriation to any sinking fund of the city or town (which portion of the tax is paid in full).

(12) Any person who hires a person from public supported programs for persons with disabilities and rehabilitated, shall receive a five hundred dollar ($500) credit per person hired; provided, that the number of the persons increases the number of full-time employees by three percent (3%) of the total numbers of persons employed the previous year.

(13) For purposes of this subdivision, in determining the total amount of the tax levy on manufacturing machinery and equipment owned or used by a manufacturer on December 31, 1973, the assessors in the several cities and towns shall not exceed ninety percent (90%) of the levy on the class of property made as of December 31, 1972; thereafter annually commencing in 1974 on December 31, the assessors shall reduce the levy on the class of property whether or not acquired subsequent to December 31, 1972, except as provided in this section, as follows: to eighty percent (80%) of the December 31, 1972, levy on December 31, 1974; to seventy percent (70%) of the December 31, 1972, levy on December 31, 1975; to sixty percent (60%) of the December 31, 1972, levy on December 31, 1976; to fifty percent (50%) of the December 31, 1972, levy on December 31, 1977; to forty percent (40%) of the December 31, 1972, levy on December 31, 1978; to thirty percent (30%) of the December 31, 1972, levy on December 31, 1979; to twenty percent (20%) of the December 31, 1972, levy on December 31, 1980; to ten percent (10%) of the December 31, 1972, levy on December 31, 1981 and to continue at ten percent (10%) of the December 31, 1972, levy on December 31, 1982; and to five percent (5%) of the December 31, 1972, levy on December 31, 1983; and thereafter the property is exempt from taxation.

Legislative History

P.L. 1966, ch. 245, § 4; P.L. 1966, ch. 287, §§ 2, 4; P.L. 1967, ch. 191, § 5; P.L. 1974, ch. 127, § 1; P.L. 1974, ch. 200, art. 1, § 1; P.L. 1976, ch. 131, § 2; P.L. 1982, ch. 199, § 2; P.L. 1983, ch. 167, art. 9, § 1; P.L. 1984, ch. 150, § 5; P.L. 1988, ch. 84, § 95; P.L. 1999, ch. 83, § 124; P.L. 1999, ch. 130, § 124; P.L. 2008, ch. 98, § 37; P.L. 2008, ch. 145, § 37.