Budget Cut – Car Tax Increase

State pondering ending car tax cap

HARTFORD — Car owners in Naugatuck and other high-tax towns could end up paying a lot more in the coming year or two.

Faced with a budget crisis, state leaders are contemplating the state’s two-year-old cap on car taxes either in the fiscal year beginning July 1, or the following fiscal year.

For two years, the cap has ensured Connecticut motor vehicle owners pay no more than 37 mills in local taxes on their car taxes. A portion off the state’s sales tax was used to reimburse affected municipalities.

Gov. Dannel Malloy originally proposed setting aside $77.9 million annually for the 2018 and 2019 fiscal years to compensate four dozen cities and towns affected. But now Malloy is proposing to hold onto the sales tax money to help close a two-year, $5 billion deficit.

Republican lawmakers have made the same recommendation. House and Senate Democrats propose to maintain the motor vehicle tax program.Read More

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