INFORMATION REGARDING THE CHANGE IN MOTOR VEHICLE VALUES

CURRENT LAW

Requires municipal assessors to value vehicles using their manufacturer’s suggested retail price (MSRP), subject to a 20-year depreciation schedule.

New Law – Modified Depreciation Schedule

Beginning with the 2024 assessment year (i.e., for tax bills sent out beginning July 1, 2025), the bill allows municipalities to adopt a modified depreciation schedule for vehicles. The modified schedule generally decreases, by five percentage points, the taxable portion of a vehicle’s MSRP that is subject to property tax.

Motor vehicles will no longer be valued by Average/Clean retail using a state recommended vehicle pricing guide. Values are determined by MSRP at year of manufacture with a fixed depreciation schedule applied.

Personal use utility trailers (flatbeds, boat trailers, etc.) all-terrain vehicles and snowmobiles, which were formerly taxed, are now exempt and no bills were issued. Approximately 900 vehicles fall into this exempt category. Reduction approx. $600k to grand list. Commercial or business use trailers are still subject to taxation.

Effects of the change from 85% to 90%

Hebron elected to use a depreciation table beginning at 90% of MSRP value and decreasing at 5% per year until a reduction of 20% MSRP value is reached. Vehicles over 20 years old cannot have a value lower than $500.

90 % – The 2024 motor vehicle portion of the Grand List decreased by $4.2 million dollars (4%) because of the changes to valuation.

85% –  MSRP decreasing to 15% of MSRP.  If the Town had elected the 85% vs the 90% schedule, the motor vehicle list would have decreased by $14 million dollars instead of $4.2 million

Any resident who believes there is an incorrect MSRP can contact our office to verify the data.

A poll was conducted by the Assessor’s association and of the 106 towns reporting 2/3rds chose the 90/20 depreciation versus the 85/15. This data is supported by statements made by OPM in a recent article published in the Journal Inquirer.

Reference can be made to the following statutes: CGS §12-71d, 12-71e, 12-81(82)& HB7067