Car tax relief likely this year, but not for everyone

Connecticut lawmakers are moving forward on a car tax cut, but how much you'd save – if anything – depends on what you drive and where you live.
The property tax on cars is hated by drivers due to it's hefty price tag. It cost Wilner Mendez of Norwalk $700 last year.
"Everything's so expensive right now, so they need to find a way to help us a little bit," he said.
Local communities charge the tax. The rate is especially high in Connecticut cities. Now, state lawmakers want to offer those drivers some relief.
"For far too long, many of our cities have been paying some exorbitant tax on their cars," said state Rep. Larry Butler (D-Waterbury).
Lawmakers are considering three competing proposals. Gov. Ned Lamont wants to cap the car tax at $29 per $1,000 of assessed value (known as 29 mills). In western Connecticut, that would force about 20 communities to cut their rate. The state would reimburse them for the lost money, although many towns are skeptical.
The General Assembly's budget committee also wants to cap tax rates, but not as much. On Thursday, they approved a 32 mill cap.
Lawmakers are also looking at a third option: Simply taking $5,000 off your car's assessment. The legislature's tax-writing panel endorsed that idea on Wednesday.
"If you have a constituent, which I'm betting you do, that has a car that's valued at $5,000 in assessment, that person pays nothing," said the committee's co-chair, state Sen. John Fonfara (D-Hartford).
In Bridgeport, where car taxes are high, the savings could be big. A vehicle assessed at $25,000 would see these savings:
  • Tax committee plan: $217
  • Budget committee plan: $275
  • Gov. Lamont plan: $361
There's a catch though. The tax exemption would only apply in high-tax communities above 29 mills. Drivers in lower tax towns would still pay on their full assessment. Drivers there say everyone should get a car tax break.
"Flat tax. $100 a car. No more. Everybody pays the same," said John Lovro of Westport.
Other tax cuts are likely too. This week, lawmakers advanced a budget that expands property tax credits and the Earned Income Tax credit, as well as creating a new child tax credit.
Lawmakers will spend the next few weeks negotiating a final package with Lamont's office before the General Assembly adjourns on May 4.