Rhode Island’s Non-Owner Occupied Property Tax Act — also known as the “Taylor Swift tax” — faced its first legal challenge with a lawsuit headed by Providence-based law firm Hinckley Allen.
The tax applies to all R.I. residential properties assessed at over $1 million that are not occupied by their owner for 183 days of the year or more, according to the Rhode Island Division of Taxation website. Owners are taxed at a rate of $2.50 for every $500 of assessed value above the $1 million threshold.
The tax’s colloquial name arises from the singer Taylor Swift’s multimillion-dollar home in Watch Hill. Swift is one of the many wealthy property owners subject to the tax.
In late August, over 40 R.I. homeowners filed a lawsuit with Hinckley Allen challenging the constitutionality of the law. Jerry Petros, Chair of Hinckley Allen’s Litigation Group and the partner leading the case, said he expects “another dozen or so homeowners” to join the lawsuit in the next week.
A Sept. 30 review by the R.I. Division of Taxation found that 8,189 properties are subject to the tax, Chief of Program Development at the Rhode Island Department of Revenue Paul Grimaldi wrote in an email to The Herald. This number is down from 8,217 properties in July, when homeowners were sent bills providing taxpayers with the opportunity to document an exemption.
The R.I. Division of Taxation began providing property owners with information about the law as early as July 2025. “Taxpayers have generally been responsive and worked with the Division of Taxation team to resolve issues,” Grimaldi added.
There are several constitutional arguments that Hinckley Allen is presenting in their suit, but Petros divided them into two main categories. First, the constitution provides that states cannot discriminate against out-of-state residents. Second, if a state is to tax a small proportion of the population, “equal protection principles require that the state have a good, reasonable justification for singling out that particular classification,” Petros said.
“Frankly, I think it’s a self-defeating philosophy in terms of trying to capture revenue that you’ve lost because of policies that drive businesses out of your state,” Petros said.
“Nobody in our lawsuit is opposed to promoting and funding more low-income housing,” he added, noting the issue is a need in R.I. But the property owners in the suit “are not responsible for that problem.”
“It feels like we’re kind of vilifying success a little bit these days, and I hope we can get to a better place on that,” he added.
Revenues from the tax will contribute to the State Low-Income Housing Tax Credit to help fund the creation and preservation of affordable housing, according to Secretary of the Rhode Island Executive Office of Housing Deborah Goddard.
The SLIHTC has awarded $30 million in credits in the past two fiscal years, which has been used for 11 developments, construction of 677 affordable housing units and preservation of 131 units, according to Goddard.
The EOH plans to fund an additional $30 million in credits for fiscal year 2026-27. The program’s existing funding — which comes through general revenue — will sunset in 2028. New tax revenue would help sustain the program beyond 2028.
The EOH is also aiming to permit 15,000 new homes by the end of 2030 as part of Housing 2030, Goddard wrote.
The Non-Owner Occupied Property Tax was part of the 2026 fiscal year budget bill passed by the Rhode Island General Assembly in June 2025, with implementation of the tax beginning in July 2026. First payments pursuant to the tax were due on Sept. 15.
Kelly Ding is a senior staff writer for the community and culture beat. She is from College Station, TX and plans to concentrate in IAPA on the policy and governance track. In her free time, she loves to explore new coffee shops, curl up with a good book, and be a gym rat.
