The law firm of Hinckley Allen has filed a Complaint in Newport Superior Court on behalf of more than 40 Rhode Island homeowners that challenges the constitutionality of the state’s so-called “Taylor Swift Tax” on luxury second homes.
The tax, which was named after Rhode Island’s most famous part-time resident, the law took effect on July 1 and imposes an additional $5 charge for every $1,000 of assessed value on second homes valued above $1 million.
According to the law firm, the tax disproportionately and improperly targets out-of-state residents who cannot vote in Rhode Island. Supporters of the tax insist the property owners consume more municipal services, fail to maintain their properties, degrade neighborhood property values, and should be compelled to rent these homes to help address a low-income housing shortage.
However, the law firm argues these owners consume less in municipal services, maintain their homes, and increase neighborhood property values. Furthermore, the law firm observes that forcing the owners of residences valued at over $1 million will not alleviate Rhode Island’s affordable housing shortage.
“When the tax was passed, it troubled many of the owners targeted by this selective tax,” said Jerry Petros, chairman of Hinckley Allen’s Litigation Group and the partner leading the case. “These homeowners already pay high property taxes and pay for more than their fair share of our municipal services, and they do so without complaint. This selective second property tax unfairly targets owners of second homes—predominantly nonresidents—who are often the most generous members of our communities in supporting charities, historic preservation, and other philanthropic causes. This selective tax-grab will also drive out more small business owners who will seek a more business-friendly environment elsewhere. It is bad for the economy and ultimately bad for the state. We are proud to represent these property owners and look forward to advocating for our clients on this important issue.”
As for Taylor Swift, she has yet to comment on having the tax named after her and is not involved in the Hinckley Allen initiative.
Photo courtesy of AMC Theatres
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