CT Loses a Billion a Year in Car-Tax Revenue But Isn’t Trying to Stop the Tax Cheaters

“This is the number one form of tax evasion in Connecticut. Connecticut is losing millions annually and our DMV does not care.”

So says Stonington Tax Assessor Jennifer Lineaweaver, president of the state association for her profession (the CCAO). She’s speaking of Connecticut residents who register their cars in other states to avoid local property taxes.

Land of Steady Bad Habits

“Connecticut is also losing money on registrations, emissions, insurance and unpaid parking tickets that cannot be enforced,” she says.

It’s super easy to get Maine plates for your vehicles — without even traveling to the state or having an address there. You can even register in Montana, a scheme especially popular with expensive motor home owners.

 

A couple of years ago Vermont admitted there were 3,600 cars registered in that state by Connecticut residents. In Maine there were 1,400.

In Bridgeport, City Councilman Alfredo Castillo was even caught with five cars registered next door in Shelton, trying to save himself $1,300 in property tax.

“I am absolutely certain that those numbers are extremely low,” says Assessor Lineaweaver. So the losses are even worse than you might think.

State Government Sits on Its Hands

The problem is there’s almost no enforcement of Connecticut laws.

“Connecticut DMV says that ‘taxation’ is not their issue,” she says. “A few years ago, we had the law changed so that DMV would have to look up any out of state plate that the assessor requests and DMV had the law reversed a year later.

“During the one year (the law) was in place, DMV refused to comply with the law and said they would have the law repealed the next year, which they did.”

Some Cities Step In

Not getting much help from the state Department of Motor Vehicles, some cities have hired private firms to help. In 2022, Danbury contracted Capital Tax Recovery to scan license plates throughout the city. Over 8,000 vehicles were under investigation. The firm pocketed 40% of the additional tax revenue collected as their fee, with no upfront cost to the city.

In Waterbury they caught 4,000 cars. In Stamford almost 8,000 cars were caught, bringing that city $1.3 million.

Many towns allow anonymous reporting of scofflaws. If your neighbor has Montana plates you can also wish them good luck getting a town dump sticker or beach pass requiring proof of local residence.

What the Law Says

Connecticut DMV Commissioner Tony Guerrera tells me the problem with out of state plates is that drivers often claim legal residence in another state, like Florida. “If they live there six months and a day, they’re considered legal residents (of Florida)” he told me.

But Connecticut law mandates that vehicles “garaged” in a municipality — meaning regularly parked overnight, even on the street — must be taxed there, regardless of where they may be officially registered. Spend your winter in the Sunshine State but more than 90 days each summer in Connecticut, and you have to pay, even with those Florida plates. The penalty is a $1,000 fine.

In Connecticut, the vehicle property tax is a significant source of revenue for municipalities: $1 billion a year. But why does a car in New Britain pay four times the tax than the same vehicle in Greenwich? These inequities just encourage tax avoidance which is, apparently, rampant and unchecked.

What the DMV and Tax Commissioners Say

“We don’t have the staff (to enforce this),” the DMV commissioner laments. His agency has its own sworn, gun-carrying police force, but Guerrera says they only work on truck inspections,  even though “registration compliance” is, according to law, one of their duties.

How is our Legislature handling this problem? With a “task force” which met seven times in 2023 considering reforms. But never reached a consensus and never approved their final report. In any case, their draft recommendations were given a thumbs-down by state Department of Revenue Services Commissioner (and former mayor of Danbury) Mark Boughton.

So, what’s a car owner to do? Well, I hear that Montana is a nice place to visit in the summer.

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