Lawmakers to undo costly car tax changes during special session

Lawmakers will return to the Capitol next week to undo changes to the car tax.

Municipalities say they could lose a lot of money from one change, while businesses say another would cost them millions.

“If action is not taken as soon possible, you’re talking about some major tax increases for small businesses,” Connecticut Business and Industry Association Vice President of Policy Chris Davis said.

Legislative leaders were still working with Gov. Ned Lamont on a call for the special session Friday afternoon, but said that will likely be the big issue.

The Senate expects to return Wednesday, with the House likely going back into session the following day.

One of the car tax fixes involves how municipalities determine a vehicle’s value and calculate depreciation.

Municipalities want to rely on the National Automobile Dealers’ Association’s valuations for cars because a switch to the Manufacturers’ Suggested Retail Price, or MSRP, could result in big losses.

They pushed for a bill to undo this change during the session, saying they’d be forced to raise more taxes from real estate and personal property. The swtich to MSRP was included in the 2022 budget.

Businesses want the state to maintain that commercial vehicles are taxed as a motor vehicle, not a businesses’ personal property.

The state caps motor vehicle taxes at 32.66 mills but has no limit on real estate or personal property taxes.

“… (T)o make sure that people who -- don’t see a 100 percent increase in their car tax, it would really hurt small businesses in Hartford, for example,” Rep. Matt Ritter, (D) House Speaker, said about the change.

That change was also included in the vehicle tax bill, which cleared the House during the regular session.

Senate Democrats amended the bill, removing the fixes and instead repealing the motor vehicle tax altogether. That amended bill never got a required second vote in the House.

“I know there are some members that are passionate about eliminating the car tax,” said Rep. Vincent Candelora, (R) Minority Leader. “This was not the way to do it.”

With lawmakers returning, environmentalists want them to take another look at a climate bill.

The bill, which also cleared the House but never got a vote in the Senate, would have declared a climate crisis. It also would have offered incentives for homeowners and businesses to switch to clean energy sources.

“It's urgent and they’re just kicking the can down the road,” Connecticut League of Conservation Voters Executive Director Lori Brown said.

Senate Democrats did not respond to a request for comment Friday. Ritter said he’d support a vote during special session.

“Other leaders – and that’s a global term, it’s not just two or three people – sort of said, ‘let’s wait on this. Wait, it may be a long debate, it may take 10, 12 hours,’” Ritter said.
Lamont also supported the bill but has expressed reluctance publicly to include it in the special session.

“From my point of view, we had four and a half months to get this important legislation passed,” he said. “I thought it should have gotten passed during the special session -- or during the regular session.”