Connecticut lawmakers to fix costly car tax ‘glitch’

(The Center Square) — Connecticut lawmakers will return to the state Capitol this week for a special session to fix a “glitch” in the state’s car tax that could dramatically increase the charges for large commercial vehicles.

A proposal approved by the Legislature during the most recent session would require commercial vehicles to be taxed as personal property rather than under the state’s car tax. The move aimed to provide relief to truckers, but lawmakers overlooked that the charges for the car tax are capped under state law, but the tax rate on property isn’t. That could be more than double the tax that truckers pay beginning Oct. 1, when the changes go into effect.

Lawmakers had approved a fix for the “glitch” in the car tax law, but it was blocked by a last-minute amendment in the state Senate before it recessed earlier this month.

House Speaker Matt Ritter, Senate President Pro Tempore Martin Looney and Gov. Ned Lamont announced that they have agreed to a special session to prevent what some say could be the state’s largest tax increase in over a decade. The House and Senate have scheduled sessions for Wednesday and Thursday.

“There are certain statutory changes that are scheduled to take effect over the coming months that we believe should be adjusted to protect the public from tax increases,” Ritter, Lamont and other state leaders said in a joint statement issued over the weekend. “We are scheduling this particular special session now so that we can prevent that tax increase and get other minor and timely adjustments signed into law.”

Connecticut has wrangled for years over its dreaded car tax — collected by local governments and varies by city and town — and several previous governors have called for eliminating or scaling it back. But those efforts have been met with fierce pushback from municipal officials heavily dependent on the money. State revenue officials say it generates about $1 billion a year for cities and towns collectively.

Lawmakers are expected to ditch the plan to tie commercial vehicles to personal property taxes, bringing them back under the car tax. During the recent session, the Senate tacked an amendment onto the bill that would have created a payment in lieu of taxes program that allows cities and towns to eliminate the car tax, but it failed to pass in the final hours of the legislative session, effectively killing the legislation.

Lamont told reporters on Friday that he wants lawmakers to focus on fixing the car tax during the special session but not repealing it.

“Fixing the car tax is priority number one,” he said. “If they want to have a broader expansion, do that in the general session where you can have a full public hearing on it.”

Lawmakers will also consider changes to improve transparency in school construction projects, boost the business climate for financial services and insurers, and provide one of the state’s water management agencies with the authority to acquire other companies.