Grants municipalities the authority to impose a parking services sales tax on parking lots and parking structures that charge for parking services through an ordinance.
Summary
S0678 creates a new chapter in Rhode Island’s taxation laws authorizing cities and towns to adopt ordinances imposing a tax on parking services. The bill defines “parking services” as the sale of parking space occupancy in a parking facility for a fee, and allows a local tax rate of up to 7% on those sales. The tax would be in addition to any other authorized taxes and would take effect on January 1, 2026.
The bill also provides that revenue from a parking services tax would be exempt from a municipality’s maximum levy increase calculation under § 44-5-2. According to the bill explanation, the tax would be collected by the state and redistributed to the municipalities that enact it. In practical terms, the measure would expand municipal taxing authority and create a new local revenue source tied to paid parking lots and parking structures.
Impact
This bill would amend Title 44 of the General Laws by adding Chapter 72, the Parking Services Taxation Act, and would affect municipal finance and local tax administration. It would authorize, but not require, cities and towns to levy a parking services sales tax of up to 7%, while excluding that revenue from local levy cap calculations under § 44-5-2. The measure would therefore give municipalities a new tool to raise revenue without counting those receipts against existing property-tax levy limits, and it would likely affect parking operators, garages, lots, and consumers paying for parking.
Sentiment
The available voting history suggests the bill was generally supported, passing the Senate on June 3, 2025 by a vote of 31-5. No committee transcript is available, so there is no recorded debate to indicate detailed arguments for or against the proposal. The strong margin of passage suggests broad acceptance of the concept of local authority to tax parking services, though not unanimous support.
Contention
The main point of contention is likely the policy choice to allow an additional tax on parking, which could raise costs for drivers, downtown visitors, and businesses that rely on paid parking. Opponents may view the measure as a new user tax or a burden on commerce, while supporters likely see it as a flexible municipal revenue source that does not count against levy limits. Another possible issue is the state collection and redistribution mechanism, which may raise administrative questions, but no specific objections are documented in the provided materials.