Senator Rahman Introduces Bill to Eliminate Car Taxes over Five Years

Today, state Senator MD Rahman (D-Manchester), Chair of the Planning and Development Committee, raised three bills in the Planning and Development Committee including a proposal to phase out the motor vehicle tax over five years.

The three bills introduced by Senator Rahman include:

-An Act Concerning Property Tax Exemptions for Motor Vehicles

-An Act Concerning Personal Property Tax Exemptions for Motor Vehicles Used Exclusively for Farming

-An Act Concerning the Conversion of Commercial Real Property for Residential Use

An Act Concerning Property Tax Exemptions for Motor Vehicles:
Currently in Connecticut, municipalities have the authority to levy property taxes on motor vehicles. These taxes are assessed based on the vehicle’s value and can vary widely from town to town. The tax burden can vary significantly depending on the municipality, causing disparities between urban and rural areas.

The bill proposed by Senator Rahman will allow towns to phase out the motor vehicle tax over a period of up to five years while increasing the assessment value on real property to make up the revenue difference. Towns would have the flexibility to implement the changes at their own pace, with some towns opting for the full five-year phase-out period while others may move faster or slower depending on their local financial needs and conditions.

“Eliminating car taxes in Connecticut will address the regional disparities in how towns currently tax vehicles,” said Senator Rahman. “This could lead to greater fairness across the state as tax burdens would be reduced for vehicle owners.”

An Act Concerning Personal Property Tax Exemptions for Motor Vehicles Used Exclusively for Farming:
Senator Rahman intends to create a tax exemption for motor vehicles used strictly for farming. Farmers invest heavily in each crop they plant in the ground and their efforts supply fresh produce for our families and communities.

Farming is a vital industry, often subject to market volatility, changing weather patterns, and fluctuating commodity prices. Providing tax exemptions for vehicles used in farming helps reduce operating costs for farmers, which can lead to increased stability and sustainability in the industry.

Farming operations often require specialized motor vehicles (such as tractors, trucks, and other agricultural vehicles) that are integral to planting, harvesting, and transporting goods. These vehicles are essential to the efficiency and productivity of farming activities. Since these vehicles are used almost exclusively for farm-related tasks, it is unfair to tax them the same way as general vehicles are. These exemptions help strengthen rural economies, ensure the stability of the agricultural sector, and promote fairness in how different types of vehicles are taxed.

“An exemption for tax on vehicles used exclusively for farming would aim to lessen the economic burdens placed on farmers, allowing them to focus on maintaining efficient, sustainable, and competitive farming operations,” said Senator Rahman.

An Act Concerning the Conversion of Commercial Real Property:
Senator Rahman intends to create a law that will allow the conversion of any commercial building into a residential development, provided that the residential development meets applicable health and safety requirements after the conversion. It will also prohibit the revaluation of any commercial building subject to a conversion over the course of three years and require that municipal inspections of any commercial building be completed within a reasonable time.

The pandemic dramatically altered commercial real estate dynamics. With the rise of remote work, many businesses in Connecticut are downsizing office spaces or closing physical locations altogether. As a result of these changes, many commercial properties, such as office buildings, malls, and retail centers, are sitting vacant or underused. Converting underused or vacant commercial properties into residential units, such as apartments or affordable housing is one solution that will not only help meet housing demand but also revitalize areas with vacant or outdated commercial buildings.

“Like many other states, Connecticut navigates shifts in work patterns, retail environments, and urban development and the need to adapt and repurpose existing commercial properties is becoming more critical,” said Senator Rahman. “By incentivizing the conversion of commercial properties into residential spaces, the act could help increase the availability of affordable units, particularly in urban areas where demand is high.”

All three bills will now head to a public hearing.