AN ACT CONCERNING THE SITUS OF MOTOR VEHICLES FOR PROPERTY TAX PURPOSES

This bill specifies that all motor vehicles and snowmobiles operating or located in Connecticut must pay property taxes here if they most frequently leave from or return to a Connecticut town. This requirement applies to all motor vehicles, regardless of whether they are registered here.

The bill also establishes rules for determining a motor vehicle or snowmobile's "situs," which in the town where it is subject to taxation. The rule applies to registered and unregistered vehicles. The bill requires owners to pay taxes to the town where the vehicle most frequently leaves from and returns to or remains during the normal course of its operation. It sets additional rules for vehicles that do not meet this frequency test. These include vehicles owned by nonresidents and recreational and construction vehicles. The bill allows owners whose vehicles are registered in one town but taxed in another to list them in the taxing town. This provision is ambiguous because an existing law, which the bill does not change, prohibits an owner from listing any registered vehicle.

The bill requires the motor vehicles commissioner to annually provide tax assessors a list of vehicles subject to taxation in their respective towns. It also puts into law the commissioner's practice of providing towns lists of vehicles that were registered on or after the October 1 assessment date.

EFFECTIVE DATE: Upon passage, except for the provision regarding the motor vehicles commissioner, which takes effect July 1, 2004.

The bill specifies when the owner of any registered or unregistered motor vehicle or snowmobile must pay property taxes. Under the bill, the owner is liable for these taxes if the vehicle, during its normal course of operation, most frequently leaves from and returns to or remains in a Connecticut town. He is also liable for the taxes even if that vehicle is not used or incapable of being used and remains here.

Current law already applies a similar rule to motor vehicles that are registered in other states but operate in Connecticut. That rule subjects a vehicle to Connecticut property taxes if it most frequently leaves from or returns to or remains in one or more points within Connecticut during the normal course of its operation. If a Connecticut resident owns the vehicle, current law establishes a presumption that the situs is his town of residence unless that town's assessor can be convinced that the owner resides in a different town.

The bill's rules for determining situs vary depending on whether the vehicle's owner is also the driver and, in some cases, on the motor vehicle's use, regardless of whether the driver owns the vehicle.

The bill requires the owner of any motor vehicle or snowmobile he drives to list the vehicle for property taxation in the town where the vehicle, during the course of its normal operation, most frequently leaves from and returns to or in which it remains.

The bill establishes a presumption that that town is also the town where the owner resides unless the bill specifically states otherwise. For an individual, the town of residence is the town where he legally resides. The residence must consist of a true, fixed, and permanent home to which the individual intends to return after any absence.

If the owner is a business or other organization, the bill presumes the taxing town is the town where it has established a site for conducting the business for which it was created. If the business is located in several towns, it must determine the situs for each registered and unregistered vehicle it owns based on the bill's situs rule.

The owner of a registered motor vehicle who assigns it to an employee for his exclusive use must list the vehicle for property taxes in the town where the vehicle most frequently leaves from and returns to or remains in. The bill assumes that this town is also the town where the employee resides.

The bill establishes the situs for leased vehicles as the town where the lessee resides. This rule applies to situations where the owner or the owner's employee leases the vehicle.

The bill's situs rule for registered recreational vehicles depends on whether the vehicle is primarily used in Connecticut. For those that are, the situs is the town where the vehicle most frequently leaves from and returns to or remains in while it is being used for recreational purposes. For those vehicles that are primarily used in other states, the situs is the town where the vehicle owner's resides. These rules apply to campers, camp trailers, and motor homes.

The bill's situs rules for construction vehicles depend on the amount of time a vehicle is used for a project located in any one town. The situs is the town where the vehicle was being used for three or more months before the October 1 assessment date in any year. But if the vehicle was being used in more than one town for three or more months before that date, the situs is the town where the vehicle was located for the three-month period that is nearest to the October 1 assessment date. Lastly, if the vehicle was located in several towns for less than three months before the assessment date, the situs is the town where the vehicle was located on that date.

The rules apply to vehicles used for construction, building, grading, paving, or similar projects or to facilitate these projects.

The bill's situs rule for vehicles registered in other states is similar to those involving construction vehicles:

1. If a vehicle most frequently leaves from and returns to or remains in several towns during its normal course of operation, the situs is the town where the vehicle was located for three or more months before the October 1 assessment date during any year.

2. If, instead, the vehicle is located in several towns for three or more months before that date, the situs is the town where it was located for the three or more months nearest to the October 1 assessment date.

3. Lastly, if the vehicle is not located in any town for three or more months before the assessment date, the situs is the town where the vehicle was located on that date.

The bill allows the owner to register the vehicle in the town where it is subject to taxation. Business owners may also include the vehicle in the list of taxable personal property he must submit to the town.

The bill requires assessors to share information about motor vehicles and snowmobiles that are registered in one town but taxed in another. It requires the assessor of the town that taxes the vehicle to notify the assessor of the town where it is registered about that fact, the owner's name and address, and the vehicle's identification number. The two assessors must work together to comply the bill's situs rules and listing requirements.

The bill requires the motor vehicles commissioner to annually give each assessor a list of motor vehicles and snowmobiles his town can tax. The commissioner must begin providing this list by December 1, 2004. The list must include the owners' names and addresses and the vehicle identification numbers, if available. Under current law, the commissioner must annually give the assessors the names and addresses of residents who own motor vehicles and snowmobiles. The bill drops the requirement that the commissioner include a description of each vehicle and its owner's social security or federal employer identification number.

To prepare the list of taxable vehicles and snowmobiles, the bill requires the commissioner to compile information about them, using his records and information the bill requires vehicle owners to give him. The bill requires owners to tell him the town where they must pay taxes on the vehicle or snowmobile.

The bill puts into law the commissioner's practice of providing assessors lists of vehicles that were registered after the October 1 assessment date but before August 1 of that assessment year. Those vehicles are subject to taxation and comprise the supplemental grand list. The bill specifies that the list must indicate when the vehicle was registered, information that allows the assessor to prorate the taxes based on the registration date.

In Paul Dinto Electrical Contractors, Inc. v. Waterbury (266 Conn. 706 (2003)), the Connecticut Supreme Court held that motor vehicles owned by a corporation should pay taxes on them to the town where it maintains its principal place of business, not to the town where the vehicles are actually located. The case involved a company that assigned vehicles to its employees, including those that did not reside in the city where the company maintains its principal place of business. The company paid property taxes on these vehicles to the towns where its employees resided.

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