Tax rates, even within a state, are not universal! In Rhode Island, commercial mill rates or tax rates differ compared to residential rates in many towns, but are the same in others. Based on the 2024 data, the average residential property tax for the 39 municipalities in Rhode Island is approximately 14.35, while the average for commercial property is about 20.37. Interestingly, 27 of the municipalities have a higher commercial rate! Why is there this discrepancy? What do some towns provide that makes the mill rate different?
A higher commercial tax rate often reflects the higher level of services available within the area. This discrepancy might also indicate the degree of reliance on property tax within the municipality. Tax rates tend to be higher in areas with a higher assessed value for commercial property. For example, the urban core and urban ring municipalities typically have higher tax rates, with an average tax rate of 24.82 for the urban core municipalities. Newport stands out with a significantly lower tax rate within this group. The urban ring municipalities have an average tax rate of 24.68 and are areas where commercial real estate tax rates are universally higher than residential property rates.
In suburban municipalities, the average tax rate is 14.41, with only 50% having higher rates for commercial properties compared to residential properties. For rural municipalities, the average tax rate is 14.17, with 26.67% having higher rates for commercial properties than residential properties. The net assessed value for commercial property is highest in the urban core area, followed by the urban ring municipalities, with rural municipalities having the lowest net assessed value for commercial properties.
How to Calculate Rhode Island Property Taxes
The formula to calculate Rhode Island Property Taxes is (Assessed Value x Property Tax Rate)/1000= Rhode Island Property Tax. Take the Assessed Value of the property then multiply it by the Property Tax Rate and then divide it by 1000.
For example, if a commercial property in Westerly is assessed at $1,000,000. Central Falls has a commercial property tax rate of 9.62. The property taxes for the commercial property in Central Falls is $42,330 a year.
($1,000,000 x 42.33)/1000= $9,620
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