National Amusements, Inc. v Town of East Windsor
The Plaintiff in this appeal filed to seek a reduction on the building value only, not disputing the value assigned to the land or site improvements. The trial court concluded that in an appeal brought pursuant to CGS , the court must consider the value of the property as a whole.
Paul Dinto Electrical Contractors v Waterbury
The Plaintiff is a corporation that acts as a contractor with its principal place of business in Waterbury, CT. The Plaintiff has 26 vehicles that are assigned to employees to use in the course of business to reach job sites. The vehicles are garaged at the employee?s homes and are rarely driven to Waterbury. Taxes are being paid to the jurisdiction where the employee and the vehicle reside. The City of Waterbury claimed the vehicles are subject to tax in Waterbury because the Corporations principal place of business is in Waterbury. The Superior Court decision ruled that for property tax purposes, motor vehicles owned by a domestic corporation are properly subject to tax in the jurisdiction where the vehicles are located, not where the Corporation?s principal place of business is located.
Legislative Update-2004 Connecticut General Assembly
2003 was a quadrennial revaluation year for Hartford as provided by CGS 12-62.In the recent past, Hartford has had significant cuts in state aid and it?s PILOT and has had a stagnant commercial real property market, which accounts for 85% of Property Tax revenue. For the upcoming budget year 2004-2005 the City was facing a potential significant budget shortfall.
As a result of the revaluation, residential values increased 60-100%, while commercial values increased a modest 6%. Most major office buildings declined in value.
Accordingly, a significant tax shift occurred in the City, along with many other 2003 revaluation communities in Connecticut. Homes and condominiums were slated to see an increase of taxes of approximately 60-87%; apartments, 6% and commercial would decrease 12-20%.
Additionally, Hartford has one of the lowest home ownerships of any major city in the
and has significant blighted vacant land.
In response to the results of the revaluation, the Mayor realized that the burden of revaluation would be crushing to the residential taxpayers. Additionally, the Mayor had campaigned on a theme of increasing home ownership rates and keeping taxes low. The mayor also realized that the Residential Cap/Corporate Tax surcharge of 15% on commercial properties allowed under CGS and implemented in Hartford (the only jurisdiction in Connecticut to implement the program) was hurting commercial business in the City.
The Mayor proposed a radical change in Property Tax policy. His proposal included the following:
- 50% homestead exemption of up to $150,000 of assessed value for owner occupied 1-3 family units.
- Elimination of the Corporate 15% surcharge (to be eliminated by the City Council, not through the Bill)
- A 200% tax surcharge on vacant land.
The resulting plan would result in an increase of approximately 20% in residential tax burden, while decreasing the property tax for most commercial property holders in the City. The bill, however, was not limited to Hartford, and could be enacted state wide. As a result, there was significant concern in the business community that a resulting state wide homestead exemption could permanently and significantly shift the tax burden in the State to commercial taxpayers, through the permanent exemption of billions of dollars in Grand List amounts in the state.
Ultimately the homestead exemption and various other proposals failed to pass in the Legislature?s regular session. In the Special Session called at the beginning of May 2004, the Legislature through an ?Act Concerning Budget Implementation? (HB5801) solved the problem faced by Hartford, and to a lesser extent some other communities by allowing Jurisdictions, through local option to discard their completed 2003 revaluations, revert back to using the 2002 grand list, and re perform the revaluation in 2006. It also allowed communities scheduled to revalue their property in 2004 and 2005 under CGS 12-62 to postpone as well to 2006. The Act also reformulated the existing 4 year schedule to a 5 year schedule and changed the property inspection requirement from once every 12 years to once every 10 years. Four ?2003 revaluation? communities chose to postpone their 2003 revaluations. They are Hartford, Stamford, West Hartford and Thomaston.
Since there is no longer a set revaluation schedule, our firm constantly monitors each City and Town to obtain their updated revaluation schedule. Please contact us for the latest updated revaluation schedule.
McDermott & Associates in the News
John McDermott will be the featured speaker at Connecticut Society of Certified Public Accountants annual State Tax update at the Aqua Turf Club in Southington Connecticut on October 18, 2004. Mr. McDermott will speak along with Steven Kosofsky, Assessor of Windsor, Connecticut on property tax legislative changes and reform issues.
John McDermott will be the featured speaker at Tax Executives Institute on November 12, 2004. Mr. McDermott will speak on property tax legislative topics effecting taxpayers in Connecticut and the Northeast. The location will be either the Farmington or Rocky Hill Marriott.