‘I don't know why, but it went up.’ New car tax formula leaves drivers confused

Car taxes are now based on the Manufacturer’s Suggested Retail Price. Most drivers will pay less, but some are stuck with higher bills.

John Craven

Jul 8, 2025, 8:57 PM

Updated 4 hr ago

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Across Connecticut, car tax bills are going out this week. But many drivers are getting a surprise.
Some owe more, even though their vehicle is a year older – while others are seeing an unexpected drop.
It’s all because tax assessors are using a new formula to determine the value of your car.
“A LOT OF QUESTIONS”
Aramis Cardal stopped by Norwalk City Hall on Tuesday to pay his car tax. Since the city’s tax rate dropped this year, he expected a lower bill.
Instead, Cardal got quite a surprise.
“Went up,” he said. “I don’t know why, but it went up.”
Tax collectors across the state say the new formula has drivers confused.
“We have been getting a lot of questions,” said Jared Schmitt, the City of Norwalk’s Chief Financial Officer.
To clear things up, Norwalk and most other communities are sending out information about the change with tax bills this month.
WHY THE NEW FORMULA?
The new formula is designed to be more predictable.
Before, the tax was based on your car’s NADA book value – what you could sell it for – which can swing wildly. During the COVID pandemic, used car prices skyrocketed – and so did car taxes.
Now, under a new state law, tax assessors must use the original Manufacturer's Suggested Retail Price (MSRP) – adjusted down a flat 5% each year to account for depreciation.
“Hopefully, it’s going to simplify things because it’s just a straight percentage decrease each year,” Schmitt said.
Many towns predicted the change would cost them millions of dollars in lost tax revenue, but Connecticut lawmakers tweaked it to let them charge slightly more.
HOW IS YOUR BILL IMPACTED?
Most drivers are saving money.
“My car tax went down from $436 to $197,” said Mike Davis, of Norwalk. “Same car.”
Under the old formula, a 2020 Honda Accord LX would cost you $313 in Norwalk. Now, it’s $240.
But you’ll end up paying more if your vehicle doesn’t hold its resale value. For example, the bill for a 2020 Jaguar XF would jump from $377 to $512.
Because the new formula has a fixed depreciation schedule, Cardal is guaranteed to pay less next year.
“Took me by surprise, the change,” he said. “But I guess we have to wait, maybe next year we’ll see the difference.”
If you think your car tax bill is too high, you can challenge your car’s MSRP with your local tax assessor’s office.