RESOLUITON
Motion/Request:
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MOTION to adopt the proposed “Resolution of the Town of Ledyard to Adopt an Optional Motor Vehicle Depreciation Schedule” as presented in the draft dated March 10, 2025.
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Background:
The State of Connecticut adopted House Bill #7067 entitled: “An Act Concerning an Emergency Certificate of Need Application Process for Transfers of Ownership of Hospitals that have Filed for Bankruptcy Protection, The Assessment of Motor Vehicles For Property Taxation, A Property Tax Exemption for Veterans Who Are Permanently And Totally Disabled And Funding of the Special Education Excess Cost Grant”. (see attached)
Under the State’s new methodology for motor vehicle valuation, Ledyard would see a 13% decline in motor vehicle valuations on the Grand List.
The State’s new motor vehicle taxation model, which will commence with the October 2024 Grand List will use the vehicles MSRP (Sticker Price) in year one, followed by a 20% depreciation in year two, then a straight-line annual depreciation of 5%.
However, House Bill #7067 allows Municipalities to adopt a modified depreciation schedule for vehicles as follows: The modified schedule generally increases, by five percentage points, the taxable portion of a vehicle’s MSRP that is subject to property tax. By law, a vehicle’s property tax assessment equals its depreciated MSRP value multiplied by 70%.
By adopting the Modified Depreciation schedule by a vote of the Town Council; it would move to MSRP, then 90% in year two, 85% in year three and so on. This change would reduce the Grand List decline to 0.64% as opposed to the 1.6% under the State’s new model; and recover nearly $444,000 in taxes.
Department Comment/Recommendation:
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Mayor Comment/Recommendation:
Given the various state reductions in revenues, I strongly support this motion.
Body:
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