State senate advances car tax changes in special session

HARTFORD, Conn. (WTNH) — The Connecticut State Senate approved a wide-ranging bill in a special session of the state legislature on Wednesday.

The omnibus bill addressed matters ranging from the state motor vehicle tax to a potential acquisition of Aquarion Water Company. The legislation, which was introduced Wednesday morning and debated for around three hours, passed along party lines with all Republicans opposing.

The Senate Republican leader characterized the car tax changes as a tax hike. He said the plan to increase the percentage of a car’s value that can be taxed by five percentage points would increase the burden on many vehicle owners.

“We’re voting to increase motor vehicle taxes here today,” Sen. Steve Harding said.

The five percentage point increase is set to go into effect, alongside a change to how cars are valued for the purpose of taxation. Assessors will move from using dynamic valuations that fluctuate with the used car market to a system that values cars based on MSRP and a standardized depreciation schedule.

Democratic Senate President Martin Looney pushed back hard at Harding’s claims that the legislature was greenlighting a tax hike.

“Well, that’s certainly not true because the rates are set by the municipalities,” Looney said. “Municipalities decide what it would be. And it would be that, that eighty five percent occurs to the eighty five percent of the MSRP — the value on the car. It’s up to the town to decide how much to tax.”

The five percentage point increase is largely intended to satisfy municipalities that rely on car tax revenue. Some lawmakers believe that the change to using MSRP values to assess the taxable value of motor vehicles paired with the five percentage point increase will result in a situation where some owners see their tax bill go up and others see it go down depending on the type of car they own and the municipality they are registered in.

Looney said that it’s true that there will be a car tax increase for some, but there may be some that will have a lower net bill. He believes that it depends on the municipality and how they want to set the mill rates.

The state currently caps motor vehicle mill rates at 32.46 mills. Many towns have set their motor vehicle mill rate at a level lower than the state cap.

Still, Harding and his Senate Republican colleagues maintained their objections.

“You can’t argue the fact that we’re increasing the assessment by five percent,” Harding said. “And how you can’t say that’s going to increase taxes, I think it’s illogical to say that. I think you have to say it is going to.”

All members of the Senate Republican caucus who were present and voting in the special session opposed the omnibus bill.

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