by Hudson Kamphausen The new haven independent
HARTFORD, CT – Car taxes would be assessed differently, and at a different starting rate, after the Senate passed an omnibus bill that included language to fix a 2022 law during its special session Wednesday.
The House will have to confirm the decision Thursday during its special session.
As part of a large omnibus bill – Senate Bill 501 – containing numerous legislative provisions, the Senate voted to alter parts of a state statute that will go into effect in October if it is not changed Thursday by the House.
That statute put in place a fixed depreciation schedule for assessing car taxes that began with 80% of the Manufacturer’s Suggested Retail Price (MSRP), which would be assessed at 70%.
The tax would now be assessed at a depreciating rate, beginning with 85% of the MSRP and decreasing by 5% each year. Effectively, cars would be taxed at a little over 50% of their value to begin with.
It’s been said that the change would put even more strain on local taxpayers, especially as some residents choose to register their cars in other states.
However, Senate President Martin Looney, D-New Haven, said that was not the case Wednesday.
“Well, that’s certainly not true because the rates are set by the municipalities. The municipalities decide what it would be,” Looney said. “It’s up to the town to decide how much to tax.”
Republicans argued that the change is effectively a tax increase, with Sen. Ryan Fazio, R-Greenwich, saying that he thinks leaving the number at 80% shows the state is moving in the right direction.
“We all acknowledge that, of the property taxes and the taxes we pay in this state, that the car tax makes the least sense,” Fazio said. He highlighted the individuals that are registering their cars in other states to escape the tax, and said the practice by Connecticut residents is putting more strain on those who do pay the their taxes.
Fazio said that, “quite simply,” the legislation raises taxes on Connecticut residents.
Sen. Norm Needleman, a Democrat from Essex who also serves as the town’s first selectman, said that the increase is not a definitive raise on taxes. He said that there will be “some winners and some losers.”
Senate President Martin Looney listens to a reporter’s question outside the Senate chamber during the special session on Wednesday, June 26, 2024, at the state Capitol in Hartford. Credit: Doug Hardy / CTNewsJunkie
Looney agreed with that assessment.
“Absolutely, it is not a tax increase. It leaves it, as always, to the towns to make the decision on what mill rates they can apply,” he said.
Looney said that another key fix of the bill would be that commercial vehicles will still be taxed as motor vehicles, rather than as commercial property. Commercial property is subject to higher mill rates than regular property or motor vehicles.
The fix would have been made during the legislative session that ended May 8, but an amendment was added to House Bill 5172 in the Senate that meant it had to go back to the House.
The amendment would have allowed towns to completely repeal the car tax at a local level – an authority towns already possess – and also provide an assessment increase to regular property taxes that they could employ if they chose to do so.
Another fix that would be made if the bill is approved in the House is the removal of a 25% penalty if a taxpayer fails to register their motor vehicle on a list of personal property.
Republicans, as with other issues in the omnibus bill, argued against the inclusion of myriad issues and provisions into one bill.
They argued that it took away some senators’ voices on certain issues, saying that in order to support one measure, they would have to support the changes to the car tax put forth in the same bill.