Can I Keep A Car Registered In Ct If I Live In Another State

Location:
MOTOR VEHICLES - REGISTRATION; TAXES - PROPERTY;

UPDATE: EVASION OF Holding TAXES ON MOTOR VEHICLES

Past: Heather Poole, Legislative Analyst I

ISSUE

What are Connecticut municipalities doing to prevent people from registering their vehicles outside of their home towns to avoid paying belongings taxes on them? This report updates 2010-R-0060 .

SUMMARY

The problem with motor vehicle property tax evasion appears to be associated with how Connecticut levies its property revenue enhancement on motor vehicles. Unlike in New York and Vermont, motor vehicles in Connecticut are subject area to belongings taxation, by and large in the municipality where the vehicle, in the normal course of operation, virtually frequently leaves from and returns to or in which it remains. The revenue enhancement applies to unregistered vehicles; vehicles registered in Connecticut; and, under certain conditions, vehicles registered in other states. Connecticut municipalities assess motor vehicles and tax them at locally set rates. Consequently, some vehicle owners try to reduce their tax burden past registering their vehicle in some other municipality or state with a lower tax charge per unit.

Municipalities have limited resources for identifying vehicles improperly registered in towns with lower tax rates. Municipalities often rely on reports from residents to identify unregistered vehicles and those with out-of-state plates, but residents oftentimes cannot tell if a vehicle with Connecticut plates is registered in a different town. Municipalities occasionally retain services of a private firm to assist them identify taxable vehicles, merely few towns retain such services on a multi-year basis. Although the Department of Motor Vehicles (DMV) helps enforce payment of delinquent holding taxes, it plays a express role in preventing vehicle owners from evading property taxes in their home town by registering their vehicles in other towns with lower tax rates.

BACKGROUND: SITUS RULES FOR MOTOR VEHICLE Holding TAX

The way Connecticut municipalities assess and tax motor vehicles may encourage some vehicle owners to annals their vehicles outside their home towns where property taxes are lower. More often than not, vehicles in Connecticut are subject by police force to property tax in the municipality where the vehicle, in the normal course of operation, most frequently leaves from and returns to or in which it remains (situs). (Colloquially, a vehicle is said to be taxed where it sleeps.) The police presumes, with limited exceptions, that this is the municipality where the vehicle owner resides. At that place are separate rules for taxing recreational vehicles, certain structure vehicles, and vehicles assigned to a business firm ' southward employees. The revenue enhancement applies whether or not the vehicle is registered with the DMV ( CGS � 12-71 ). It likewise applies if a vehicle endemic by a nonresident and registered in some other state is located in a Connecticut municipality for iii or more months ( CG S � 12-43 ).

Residents and nonresidents are required to declare any taxable vehicles that have not been registered in Connecticut and face a punishment of 25% of the vehicle ' s assessment for declining to practice so ( CGS � 12-41 and � 12-43 ). Connecticut residents who operate a motor vehicle with plates issued past another state face a $1,000 fine ( CGS � 14-12 (a)(2) ).

EVASION OF LOCALLY-LEVIED PROPERTY Taxation

By law, all municipalities must appraise motor vehicles at lxx% of their off-white-marketplace value, just may revenue enhancement them at locally set rates. Consequently, some vehicle owners try to reduce their tax burden by registering their vehicle in another municipality or state with a lower (or, in some states, nonexistent) tax charge per unit. According to John Rainaldi, the Manchester assessor and president of the Connecticut Association of Assessing Officers, this problem seems to exist growing, and almost probable occurs in municipalities with loftier property taxation rates and those bordering other states.

ENFORCEMENT OF PROPERTY TAXES

The number of vehicles operating in the state makes it hard for municipal assessors to enforce the in a higher place situs rules. The difficulty varies depending on whether a vehicle has Connecticut plates. Rainaldi notes that Manchester and other municipalities oftentimes rely on reports from residents to place unregistered vehicles or vehicles registered out-of-country. After receiving a study, municipalities make up one's mind the vehicle ' s situs and appraise it accordingly.

Residents seldom report improperly registered vehicles with Connecticut plates. According to Rainaldi, it is difficult to identify such vehicles because people generally assume a vehicle with Connecticut plates is properly registered, and municipalities often do not have the resource to confirm each vehicles ' situs.

Municipal Tax Services

Because of these difficulties, some municipalities have retained the firm Municipal Tax Services (MTS) to assistance them identify unregistered and improperly registered vehicles. Currently only New Haven and Waterbury use MTS ' services, but MTS ' past clients include Bridgeport, Danbury, Hamden, and Stratford.

MTS sends employees with cameras to identify unregistered vehicles and those that may be registered in other states. The employee drives around the municipality using photographic camera engineering that automatically detects license plates, reads the license plate number, and compares the number to a property tax database. When the employee sees a vehicle with out-of-state plates or that is unregistered, he or she uses the database to determine whether the vehicle possessor is already paying taxes on the vehicle. If not, the firm volition take photos of the vehicle over a 3-month menstruum to determine whether it is beingness continually parked in the municipality. The company also uses another database that can identify the owner ' s residency based on regime-reported mailing addresses and voting registry. Once residency is established, the municipality will send a alphabetic character to the owner inquiring near the vehicle and asking an interview on the subject.

In 2010, David Dietsch, the Waterbury assessor, stated that these techniques were helpful in identifying people who were seeking to evade holding taxes, allowing the city to collect approximately $300,000 in taxes that year. MTS continues to piece of work with Waterbury, while other municipalities often exercise and so only on a one-year basis. MTS believes that municipalities do so because it takes but a twelvemonth to capture most vehicles escaping taxation. This practice seems to piece of work best in municipalities with piffling resident turnover. Municipalities with a lot of turnover (such as a large educatee population or a number of flat complexes) are more than probable to retain MTS ' services on a multi-twelvemonth footing.

DMV

Because vehicle owners must register their vehicles with DMV, DMV indirectly enforces motor vehicle property tax payments. DMV prohibits residents from renewing vehicle registrations if they have non paid their vehicle property tax, and it may suspend registrations that have been renewed in error (for instance, if a resident owes back property taxes or has paid with a delinquent cheque) ( CGS � xiv-33 ).

Although DMV helps enforce the payment of runaway taxes, it has few tools to identify and address vehicle owners who annals vehicles outside of their domicile towns to accept advantage of lower tax rates. According to DMV, it does occasionally receive reports of vehicles registered out-of-state that appear to be taxable in Connecticut. When this happens, DMV ' south property tax unit recommends that the person who provided the study contact the appropriate municipality. DMV stated that it refers any cases of suspected vehicle property tax evasion (when someone has registered their vehicle out-of-land or in the wrong town) to local police force enforcement.

A electric current practice could help DMV spot people who attempt to evade paying high vehicle property taxes in their abode boondocks by registering their vehicles in other, low-tax towns. Co-ordinate to DMV, for the past several years (and in training for its modernization endeavor) it has used a Connecticut resident ' south driver ' s license information to fill in an bidder ' due south name and address fields on the registration forms, a change that could brand it more difficult for Connecticut residents to improperly annals their vehicle in a town with a lower revenue enhancement rate. Another feature that could frustrate tax evasion is the option on the registrati on form allowing an applicant to declare the motorcar ' s situs for the purposes of holding taxation. Knowingly providing simulated information on a registration is a crime, and applicants are required to certify that the information contained on the application form is true.

Changes underway in DMV could make it easier for DMV to place Connecticut residents who are improperly registering their vehicles in towns other than their boondocks of residence. These changes are part of a broader modernization try that includes new software that is expected to streamline processes, shorten wait times, and allow many transactions to take place online. Co-ordinate to NBC Connecticut , one important feature of the new software is that all the transactions made by one person (e.yard., titles, registrations, and driver ' s licenses) volition be linked with a single identification number, which is not currently possible.

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Can I Keep A Car Registered In Ct If I Live In Another State,

Source: https://www.cga.ct.gov/2014/rpt/2014-R-0285.htm

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