Sen. Hwang votes “yes” on car tax elimination study

May 15, 2023

Could CT end local vehicle taxes? Here’s why it’s being considered

CT Post

After an extensive debate on the long-simmering disparity of Connecticut’s local tax rates – where affluent towns have substantially lower mill rates than cities – the state Senate last week approved legislation that would be a first step toward eliminating the levy while still providing towns and cities the revenue needed to help run local government.

The bill, approved unanimously and which heads next to the House of Representatives, would create a task force with a February 2024 deadline to study and make recommendations on ways to repeal the motor vehicle property tax, and possibly replacing the lost local revenue through ways including a new 8-percent tax on insurance premiums.

Members of the task force would include representatives from non-profit advocacy agencies including residents over the age of 50 such as the AARP; statewide municipal organizations; the insurance industry; higher education; and the General Assembly.

“For this task force to really begin its work, I would make a couple of suggestions,” said Sen. Tony Hwang, a Republican from Fairfield, where the mill rate is 27.24, according to recent state data.

“I think one is to understand that the motor vehicle tax has a direct impact on our municipalities, otherwise it would not be so stubbornly maintained for all of these years,” Hwang said. “I remember back in the distant past that the motor vehicle tax was supposed to be temporary. And that’s a challenge when we look at taxes: once a tax is put in place it’s awfully hard to take it out. But we need to understand that we need to live within our means. We have created a dependency of our municipalities on this motor vehicle tax, and its inequities, based on mill rate that has created such havoc and impact on communities, and the disparity.”