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H 7568Property

Taxation - Levy and Assessment of Local Taxes

This bill allows commercial property owners to qualify for a one-time forgiveness of interest on late property tax payments.

Signed into law60 Yea1 Nay14 Not voting
Population
Affected
15
Email Legislator
Introduced Feb 6, 2026Committee House Municipal Government & Housing

Plain-English Summary

This legislation amends current property tax laws to expand the eligibility for a one-time waiver of interest on overdue quarterly tax payments. Currently, this relief is available to residential homeowners who meet specific criteria. This bill extends that same opportunity to owners of commercial properties. To qualify, the taxpayer must have owned the property and made timely payments for the preceding five years. The waiver is capped at $500 and must be requested in writing. If a city or town has an ordinance allowing for such waivers, they are required to grant it if the taxpayer meets the statutory requirements.

For younger readers

When people own buildings, they have to pay money called taxes to the town. If they are late paying, the town usually charges extra money called "interest" as a penalty. Right now, people who own houses can ask the town to forgive this extra charge if they are usually good at paying on time. This new rule says that people who own buildings for businesses, like stores or offices, can also ask to be forgiven for that extra charge if they are late. It helps business owners save money if they make a mistake and pay late once.

Who & Where It Applies

Impacted groups
Commercial Property OwnersSmall Business OwnersMunicipal Tax CollectorsCity and Town CouncilsResidential Property Owners
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Provides financial relief to small business owners who may be struggling with cash flow, helping to keep local establishments open and supporting the community economy.
  • Ensures fairness and equal treatment under the law by offering commercial property owners the same opportunity for error correction that is currently afforded to residential homeowners.
  • Mandates that towns "shall" grant the waiver if criteria are met, reducing the potential for arbitrary or biased decision-making by local officials against specific business owners.
  • Reduces potential revenue for cities and towns, which could otherwise be used to fund public schools, infrastructure, and social safety nets.
  • Extends financial breaks to commercial landlords and property owners who generally have more capital than the working class, potentially viewed as a handout to the wealthy.
  • Does not strictly target small or disadvantaged businesses, meaning large corporate property owners could utilize this benefit despite having ample resources to pay penalties.
For Conservatives
  • Reduces the punitive financial burden of government penalties on businesses, allowing capital to remain in the private sector rather than going to the state.
  • Encourages business retention and stability by rewarding long-term taxpayers who have a history of compliance with a measure of leniency.
  • Limits the discretionary power of local government bureaucrats by mandating they grant the waiver if the objective legal criteria are met.
  • Undermines the strict rule of law regarding tax deadlines, potentially signaling that late payments are acceptable without consequence.
  • Reduces local control by dictating to cities and towns how they must administer their tax collection and waiver processes.
  • Technically results in a loss of revenue for the municipality, which could lead to calls for tax increases elsewhere to balance the budget.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 2 additions

SECTION 1. Section 44-5-8.1 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" is hereby amended to read as follows: 44-5-8.1. Waiver of interest on overdue quarterly tax payments.

(a) Notwithstanding any other provision in this chapter to the contrary, any city or town may, by ordinance duly enacted, authorize a waiver of interest on one quarter’s overdue property tax payment and allow the remaining balance of taxes owed to be paid on a quarterly basis if all of the following conditions are satisfied by the taxpayer:

(1) The property subject to the overdue payment is the residence or commercial property of the taxpayer and has been for the five (5) years immediately preceding the tax payment which is overdue.

(2) The request for a waiver of interest is in writing, signed and dated by the taxpayer.

(3) The taxpayer has made timely payments of taxes to the city or town for the five (5) years immediately preceding the tax payment, which is overdue. The burden of proof of timely payments shall be upon the taxpayer.

(4) The bill for which the payment is overdue was issued less than two (2) years prior to the date of the request for a waiver of interest.

(b) In no event shall the waiver of interest on a tax bill exceed five hundred dollars ($500). Decisions of the tax collector shall be in writing and contain a notice to the city or town council. If the taxpayer receives an adverse decision from the tax collector, the taxpayer must pay the interest and may file a claim for reimbursement with the city or town council within ten (10) days of the decision.

(c) Any request for a waiver of taxes which meets criteria established by this section pursuant to a duly enacted ordinance shall be granted by the city or town.

SECTION 2. This act shall take effect upon passage.