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

SUMMARY: This act explicitly subjects all registered and unregistered motor vehicles and snowmobiles (i. e. , vehicles) operating or located in Connecticut to the property tax. It applies to any vehicle even if it is not being used or is incapable of being used but remains in Connecticut. It also applies to any vehicle registered in another state if it most frequently leaves from or returns to a Connecticut town.

The act sets rules for determining the town where a vehicle is subject to the tax (i. e. , situs). One rule requires a vehicle’s owner to pay taxes to the town where the vehicle most frequently leaves from, returns to, or remains in during the normal course of its operation. Different rules apply to vehicles owned by nonresidents and recreational and construction vehicles. The act allows businesses whose vehicles are registered in one town but taxed in another to declare them in the taxing town.

The act requires the motor vehicles commissioner to annually provide tax assessors a list of vehicles subject to taxation in their respective towns. It also clarifies the law under which the commissioner provides assessors with lists of vehicles that were registered on or after the October 1 assessment date.

EFFECTIVE DATE: Upon passage, except for the provisions regarding the motor vehicles commissioner, which take effect July 1, 2004, and the situs rules, which take effect upon passage and apply to any assessment year.

The act provides two sets of rules for determining a vehicle’s situs. The first set is used to determine if a vehicle is subject to property taxes in Connecticut, regardless of whether it is registered here. According to that rule, its owner is liable for taxes here if the vehicle, during the normal course of operation, most frequently leaves from, returns to, or remains in a Connecticut town.

Existing law provides a similar rule for determining if a vehicle registered in another state is subject to property taxes in Connecticut. Under that rule, a vehicle is subject to taxes here if it most frequently leaves from, 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, the 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 second set of rules is used to determine the town where the vehicle is subject to property taxes. These rules vary depending on the vehicle’s registration; whether the owner also operates the vehicle; and, in some cases, on its type.

Owner/Driver. The act requires tax assessors to include a vehicle a person owns and operates in the town’s grand list if the vehicle, during the normal course of its operation, most frequently leaves from, returns to, or remains in that town.

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

If the owner is a business or other organization, the act presumes that the taxing town is the town where the organization has established a site for conducting the purposes for which it was created. If the organization has sites in several towns, the situs for each vehicle is the town where the vehicle, during the normal course of its operation, most frequently leaves from, returns to, or in which it remains.

Employee Vehicles. The act’s situs rule also applies to situations where an organization assigns a vehicle it owns to an employee for his exclusive use. In those situations, an assessor must include the vehicle in the grand list if the employee resides in the town and the vehicle most frequently leaves from, returns to, or remains in the town.

Leased Vehicles. Under the act, the situs for leased vehicles is the town where the lessee resides. This rule applies to situations where the vehicle’s owner or the owner’s employee leases the vehicle.

Recreational Vehicles. The act’s situs rules for registered recreational vehicles vary depending on whether the vehicle is primarily operated in Connecticut. For those that are, the assessor must include the vehicle in the town’s grand list if the vehicle most frequently leaves from, returns to, or remains in the town while it is being used for recreational purposes. For those that are primarily used in other states, the assessor must include the vehicle if its owner resides in the town. These rules apply to campers, camp trailers, and motor homes.

Construction Vehicles. The situs rules for construction vehicles depend on the amount of time a vehicle is used for a project located in any one town. The assessor must include the vehicle in the grand list if the vehicle was being used in the town for at least three months prior to the October 1 assessment date in any assessment year.

If the vehicle was being used in more than one town for three or more months before that date, the situs depends on the three-month period nearest the October 1 assessment date. In other words, the assessor of the town where the vehicle was used for the three or more months that are nearest to October 1 must list the vehicle in the town’s grand list.

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

The situs for vehicles owned by nonresidents is the town where the vehicle, during its normal course of operation, most frequently leaves from and returns to. The exceptions to this rule are similar to those for construction vehicles:

1. If a vehicle most frequently leaves from, 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 act requires assessors to share information about vehicles that are registered in one town but taxed in another. The assessor of the town that taxes a vehicle must notify the assessor of the town where it is registered about that fact and provide the owner’s name and address and the vehicle’s identification number. The two assessors must work together to comply with the act’s situs rules and requirements for including the vehicle in the taxing town’s grand list.

Existing law requires owners to provide certain information to the motor vehicles commissioner when registering a vehicle. The act requires them to identify the town where the vehicle is subject to the property tax. It also allows owners to register a vehicle in the town where it is subject to tax if they reside in a different town.

The act requires the commissioner to include the information he receives and other information he possesses in the list he prepares for each assessor of the vehicles subject to taxation in their respective towns. Under prior law, he had to include the owners’ names and addresses and the vehicles’ identification numbers, if available. Under the act, the commissioner must include the name of the taxing towns. He must annually prepare these lists and give them to the assessors by December 1, starting in 2004.

The act eliminates the requirement that the commissioner provide the Department of Revenue Services with an annual list of the vehicle owners’ names, addresses, and social security account or federal employer identification numbers.

The act clarifies the law under which the commissioner must provide assessors with lists of vehicles that were registered after October 1 but before the next August 1. These vehicles are subject to taxation and placed on the supplemental grand list. The act specifies that the list must indicate the vehicle’s registration date. The law requires the assessor to prorate the vehicle’s assessment based on that date.

In Paul Dinto Electrical Contractors, Inc. v. Waterbury (266 Conn. 706 (2003)), the Connecticut Supreme Court held that a corporation should pay taxes on motor vehicles that it owns 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.