MD Rahman

LEGISLATION STUDYING ELIMINATION OF CAR TAX, INTRODUCED BY SEN. RAHMAN, PASSES PLANNING AND DEVELOPMENT COMMITTEE

This week, legislation introduced to the General Assembly that would create a task force to study the feasibility of eliminating the property tax on motor vehicles passed through the Planning and Development Committee. The bill, introduced by State Senator MD Rahman (D-Manchester), seeks to find a better and more equitable approach than the motor vehicle tax, which is regressive in locale; due to local property taxes differing significantly among different communities, a vehicle owner in Hartford likely pays more than three times more than a driver in Greenwich, a disparity between communities Sen. Rahman seeks to address. The bill passed on Wednesday by a 14-7 vote.

“This bill was introduced to begin the process of modernizing the vehicle property tax and seeking more progressive models of taxation,” said Sen. Rahman. “I’m looking forward to the findings that this task force will uncover should the bill reach final passage in the Senate and House. The language of this bill has changed out of a desire to ensure such a significant change is thoroughly studied and considered before action is taken. The vehicle property tax is regressive in its current form, and can have a negative impact on municipal affordability; it disproportionately impacts seniors, young residents and workers, not to mention its differing impact on residents in different communities. I remain committed to finding cost savings to help residents who may be experiencing financial strains.”

Senate Bill 497, “An Act Eliminating The Property Tax On Motor Vehicles And Establishing The Motor Vehicle Property Tax Revenue Replacement Account,” after recent adjustments to bill language, will establish a task force to study the feasibility of repealing the motor vehicle property tax and what options are available to replace resulting lost municipal revenue. The task force will look at how such a decision would impact municipal budgets and review possibilities that could replace lost revenue.

Potential revenue mechanisms could include an annual 8% surcharge on direct net premiums received by insurance carriers and insurance on automotive and homeowner insurance policies, though the task force will pursue additional possibilities. The task force would include representatives of tax reform organizations, organizations supporting residents ages 50+, municipal leaders, insurance carrier officials, the secretary of the Office of Policy and Management, the Commissioner of Revenue Services and members of the Planning and Development Committee. The task force would report its findings by the end of 2023.

The bill now proceeds to the Senate floor for further consideration.