The Facts About the Municipal Car Tax Cut

July 5, 2024
Last week, we went into special session to take an important step in the municipal car tax cut we passed in 2022. This next step was not new legislation, rather, it was a bill that the Planning and Development Committee worked on for two years, as a required step in the process of implementing the motor vehicle tax cut. The bill passed the House along bipartisan lines during our regular session, but when it got to the Senate, in the final hours of session, it was amended in a way that would have drastically increased commercial vehicle taxes, and we could not pass it in the House as amended. This triggered our need for a special session, which took place a little over a week ago, on June 27th.

As a result of the implementation bill that was passed on the 27th, the average car owner will see a tax decrease of around 8%, and more than that over time, because we have set a new depreciation schedule that will be used based on MSRP, not NADA. NADA Guide values are considered by many to be overinflated, since they don’t factor in the condition of the vehicle. The goal of this was to create predictability for taxpayers and towns, and I worked directly with First Selectperson Marconi from the moment the initial bill language was proposed, to ensure this was not going to create a problem in Ridgefield. Additionally, we made sure that commercial vehicles will be on the motor vehicle deck and not the personal property deck.

It's important to note that while there seemed to be considerable misunderstanding of the bill in the Senate during this special session leading to many no votes up there, in the House, not only did Republican Minority Leader Vinny Candelora vote for it but so did the ranking member of the Finance, Revenue and Bonding Committee, Representative Holly Cheeseman, along with 14 additional Republican colleagues, many of them in leadership positions.

In addition to fixing the motor vehicle tax, within the language of the bill, we also addressed:
 

  • Promoting transparency and competition in municipally-administered school construction projects by restoring a ban on construction managers self-performing subcontracting work;
  • Making Connecticut a more attractive place for innovative financial services companies to establish a significant presence by expressly allowing banks holding a certain charter to accept and hold non-retail deposits and secure deposit insurance from the FDIC and by updating the name of that charter;
  • Providing more certainty to the state’s insurance industry by establishing that the annual assessment on domestic insurance companies to fund certain insurance-related state offices and programs should be calculated based on those companies’ total taxes, prior to any adjustment for tax credits, from the year immediately preceding the prior calendar year instead of the prior calendar year itself;
  • Relieving employers, including tax-exempt organizations, that kept employees on payroll throughout the pandemic and received the federal Employee Retention Credit from the burden of interest payments attributable to the timing and complexities of a new federal program rather than any willful underpayment by the taxpayer;
  • Supporting the preservation and reuse of historic properties by streamlining the process by which the State Historic Preservation Office reviews those properties; and
  • Amending the South Central Connecticut Regional Water Authority to permit the Authority to acquire water companies outside its current service area (in this case, it means that we changed the charter to allow them to bid on Aquarion if they so choose).