State Senator Pitches New Kind of Car Tax

The top Democrat in the Connecticut says it’s time for a change in the way the state and municipalities charge their residents for their cars.

State Sen. Martin Looney is crafting a proposal that could do one of several things, such as create a median rate at which certain property would be taxed and allow municipalities room to meet their revenue needs. The proposal could also provide some kind of tax break up to a certain level.

“There has to be some progressivity in it by exempting part of the value of the car, let's say $4,000,” Looney said Thursday. “So someone who, let's say, has a car that's only worth $5,000, they might only pay $1,000 on that with a $4,000 exemption, whereas someone whose car is assessed at $40,000 would get taxed at $36,000."

Individual towns and cities set their own mill rates at which property is taxed. Such a system leads to automobiles with the same assessed value having drastically different tax bills depending on the municipality.

According to the Connecticut Office of Policy and Management, the same $20,000 car carries a tax bill of $1,486 in Hartford, $831 in New Haven and just $219 in Greenwich.

Looney says it’s time to stop penalizing Connecticut residents based on where they live.

"I think the system, such that I've suggested here, I think, would build much more fairness into a system that's just grossly unfair now," Looney said.

The Connecticut Conference of Municipalities estimates that $800 million in annual revenue goes to cities and towns as a direct result of the car tax.

“CCM’s concerns focus around the ability of the state to establish and maintain a lock box to ensure the revenues are returned to towns in the short and long-term; and that all towns are held-harmless and maintain at least the same level of revenues,” CCM spokesperson Kevin Maloney said in a statement.

Maloney added that a change to the way cars are taxed could lead to tax hikes on other property likes homes and businesses.

Officials with the Connecticut Business and Industry Association also say they could see some issues with changes to the car tax.

"Let's say you have a large fleet of automobiles so if you're in a town where that mill rate is going to go up, that can be a significant cost increase for you and the alternative is that if you're in a town where the mill rate is going to go down, it could be a cost savings. So it really depends town by town and what the plan is," said Joe Brennan, the group’s President and CEO.

Contact Us