1. IMPACTS ON THE BUSINESS COMMUNITY Local Property Taxation in Connecticut

2. What types of property are subject to local property taxes?  Real Property  Motor Vehicles  Tangible Personal Property

3. Local Property Taxation in Connecticut How is the tax calculated? Property value multiplied by 70% multiplied by the local mill rate

4. Local Property Taxation in Connecticut How is the assessed value of property determined? Real property – revaluation & local assessment (every 5 years) Motor Vehicles – NADA pricing guides (annually) Tangible Personal Property – Personal Property Declarations (filed annually)

5. Local Property Taxation in Connecticut How is the mill rate calculated? Local Board of Finance /City Council:  determines what total expenditures for upcoming year will be;  Deduct other revenues  Assumes an anticipated collection rate  Divides the amount of tax revenue needed by net taxable Grand List

6. Local Property Taxation in Connecticut Depending upon the nature of the assets owned, businesses could pay local property taxes on real estate, motor vehicles and/or tangible personal property Unless there are exemptions in place created by statute.

7. Local Property Taxation in Connecticut Exemptions:  Real Estate - usually limited to non-profit ownership /activities or if located in TIC/PICs  Motor Vehicles – usually limited to non-profit ownership/activities and certain commercial vehicles that haul freight for hire  Tangible Personal Property – Most of the exemptions effect this class of property (see provided handout)

8. Local Property Taxation in Connecticut What are major challenges of current tax system?  Higher mill rates in urban areas can influence businesses to move to lower mill rate towns  Connecticut is a small state, businesses could look to other nearby states taxes’ and consider relocation  May require either other tax incentives or additional exemptions to retain businesses

9. Local Property Taxation in Connecticut What do neighboring states tax?  New York Taxes real property (not tangible personal property). Motor Vehicles taxed by state at time of registration.  Mass. & RI Taxes real property and tangible personal property. Motor Vehicles are subject to a local excise tax.  New Hampshire Taxes Real Property and motor vehicles. Has State Business Profits Tax.

10. Local Property Taxation in Connecticut  Maine Taxes real property, motor vehicles and tangible personal property. State reimburses businesses for a portion of the tax paid on newly acquired capital equipment.  Vermont Taxes real property and business personal property. Motor vehicles are taxed by the Vermont DMV.  Exemptions - see provided handout

11. Local Property Taxation in Connecticut Questions?