Question
I live in Connecticut and this is my first car. I bought the car at the dealership and already paid the tax on it there. How do car taxes work in Connecticut—do I have to pay an annual tax, too?
The Answer
Yes, you are required to pay annual property taxes in Connecticut. Car owners must pay a yearly motor vehicle tax in addition to the standard sales tax due when purchasing a car at a dealership or from a private sale.
Connecticut isn’t the only state that enforces a recurring vehicle tax on residents, although the number of states that do is dwindling.
How much you pay in yearly vehicle taxes in Connecticut will depend on where you live. Taxes can vary between cities and counties, so you’ll need to contact your local country tax office to get the specifics that apply to you. Each municipality is responsible for calculating the “mill rate” at which vehicles are taxed.
A mill rate equals 1/1000th of a dollar when calculating the vehicle tax. In other words, this means residents pay $1 in taxes for every $1,000 worth of property value.
Starting Oct. 1, 2024 the new MSRP valuation system will be implemented in Connecticut. This “sticker price” is set and then reduced over time based on a table produced by the state government.
Connecticut charges each resident 70% of the car’s MSRP value multiplied by the mill rate.
For example, if you own a car with an MSRP of $35,714 (factoring in the car’s age), you first have to do the 70% calculation or $25,000 (rounding up slightly for easy math). That amount will then be multiplied by the mil rate. Let’s say the mil rate for a certain county is 20 mils. The math would then be: $25,000 x (20/1000) = $500.
Thankfully, you won’t have to do any of this math yourself. You will receive a tax bill from your county in the mail with an amount and a due date.
Be mindful that Connecticut charges a 1.5% interest in late fees for every month the bill isn’t paid. All tax information is reported to the DMV, so not paying the tax can result in a high fee, license suspension, and even registration revocation.
Keep in mind that this tax is separate from the sales tax you paid when purchasing the car. In Connecticut, the sales take is 6.35% for vehicles under $50,000 or 7.75% for ones over $50,000. So in our hypothetical $35,714 car purchase price, the sales tax would be $2,267.84 at the time of purchase.
Kevin Berry is the Senior Director of Content at Jerry and has been working in the digital content space since 2011 across the car insurance/repair, personal finance, travel and sports industries. Prior to Jerry, Kevin was a content team lead at NerdWallet overseeing the Multimedia Production and Travel Rewards teams. Previously, he worked for NBC Sports, Comcast Cable and Nike. He has a Master`s Degree from Arkansas State and a Bachelor`s from Oregon State University.
Giselle Gomez is an editor with over a decade of experience editing content across personal finance, education, travel, and sports. In editing for Jerry, Giselle’s focus is on making sure content is consumer and SEO-friendly and helping readers understand all things car ownership. In prior roles, she worked as a content strategist, syndication editor, and writer. Her work is featured in AP, NerdWallet.com, BestColleges.com, and more. Giselle holds a master’s degree from Arizona State University.
