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OLR Bill Analysis
HB 6688 (as amended by House "B")*
Emergency Certification
AN ACT CONCERNING A HIGHWAY USE FEE.
SUMMARY
Beginning January 1, 2023, this bill imposes a highway use tax
(HUT) on every “carrier” for the privilege of operating, or causing to
be operated, certain heavy, multi-unit motor vehicles on any highway
(i.e., public road) in the state.
The HUT is calculated based on a vehicle’s weight and the number
of miles driven in the state. The bill establishes per-mile tax rates that
increase based on vehicle gross weight, ranging from (1) 2.5 cents per
mile for vehicles weighing 26,000-28,000 pounds (lbs.) to (2) 17.5 cents
per mile for vehicles weighing more than 80,000 lbs. Revenue from the
tax is directed to the Special Transportation Fund (STF) (see
BACKGROUND).
Under the bill, carriers must file returns and remit the tax to the
Department of Revenue Services (DRS) on a monthly basis. The bill
requires carriers to obtain HUT permits from DRS and establishes
procedures for suspending or revoking them. It also applies to the
HUT various collection, enforcement, and appeals process provisions
that apply to other taxes under existing law.
The bill authorizes the DRS commissioner to adopt implementing
regulations for the HUT and prohibits tax credits from being applied
against the HUT.
*House Amendment “B” exempts certain motor vehicles
transporting milk.
EFFECTIVE DATE: Upon passage and applicable to calendar
months beginning on or after January 1, 2023. 2021HB-06688-R01-BA.DOCX
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TAX BASE AND RATES
Carriers and Eligible Vehicles (§ 1(a) & 1(j))
The HUT applies to carriers operating “eligible motor vehicles,”
which are those (1) with a gross weight of 26,000 lbs. or more and (2) in
classes 8 through 13 of the Federal Highway Administration’s (FHWA)
vehicle classification system (see Table 1 below). The bill exempts from
the HUT (1) the United States, the federal government, and the state or
any of its political subdivisions and (2) motor vehicles carrying or
transporting milk or dairy products to or from a dairy farm that holds
a license to ship milk.
Under the bill, “gross weight” is the light weight of a vehicle plus
the weight of its load. (“Light weight” means the weight of an
unloaded vehicle ordinarily equipped and ready for use, minus the
driver’s weight.) In the case of a tractor-trailer unit, gross weight
means the tractor’s light weight plus the (1) light weight of the trailer
or semitrailer and (2) weight of the vehicle’s load.
Table 1: FHWA Vehicle Classification and Tax Status
Not Subject to HUT Subject to HUT
Class Vehicles Class Vehicles
1 Motorcycles 8 Single trailer, 3- or 4- axle trucks
2 Passenger cars 9 Single trailer, 5-axle trucks
3 Pickups, panels, and vans 10 Single trailer, 6+ axle trucks
4 Buses 11 Multi-trailer, 5 or fewer axle trucks
5 Single unit, 2-axle trucks 12 Multi-trailer, 6-axle trucks
6 Single unit, 3-axle trucks 13 Multi-trailer, 7+ axle trucks
7 Single unit, 4+ axle trucks
The bill requires each carrier to maintain, on a monthly basis, a list
of all eligible motor vehicles it operated or caused to be operated in the
month. Carriers must maintain these lists for at least four years after
the month’s date and make them available to DRS upon request.
Tax Rate (§ 1(b))
The bill requires carriers to determine their tax due on a monthly 2021HB-06688-R01-BA.DOCX
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basis by (1) calculating the number of miles traveled by each eligible
motor vehicle the carrier operated or caused to be operated in the state
and (2) multiplying each vehicle’s miles traveled by the rate
corresponding to its gross weight. The rates range from 2.5 cents per
mile to 17.5 cents per mile, as shown in Table 2.
Table 2: Highway Use Tax Rates (per mile)
Gross Weight
(lbs.)
Rate (cents
per mile)
Gross Weight
(lbs.)
Rate (cents
per mile)
26,000-28,000 2.50 54,001-56,000 6.54
28,001-30,000 2.79 56,001-58,000 6.83
30,001-32,000 3.08 58,001-60,000 7.12
32,001-34,000 3.37 60,001-62,000 7.40
34,001-36,000 3.65 62,001-64,000 7.69
36,001-38,000 3.94 64,001-66,000 7.98
38,001-40,000 4.23 66,001-68,000 8.27
40,001-42,000 4.52 68,001-70,000 8.56
42,001-44,000 4.81 70,001-72,000 8.85
44,001-46,000 5.10 72,001-74,000 9.13
46,001-48,000 5.38 74,001-76,000 9.42
48,001-50,000 5.67 76,001-78,000 9.71
50,001-52,000 5.96 78,001-80,000 10.00
52,001-54,000 6.25 80,001 and over 17.50
HUT ADMINISTRATION
Returns (§ 1(c))
Under the bill, each carrier must file a monthly return with DRS in a
form and with the information that the commissioner requires and pay
the taxes owed. The returns and tax payments are due by the last day
of the month following the month for which a carrier is filing a return.
The bill requires carriers to file returns and pay the tax by electronic
funds transfer in accordance with existing law.
Deposit and Recording of Revenue (§ 1(c) & 1(r))
The bill requires the DRS commissioner to deposit HUT revenue 2021HB-06688-R01-BA.DOCX
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into the STF (see BACKGROUND). This comports with existing law,
which requires that, beginning July 1, 2015, all funds that the state
receives or collects on account of, or derived from, the use of highways
be credited to the STF (CGS § 13b-61(b)(19)).
At the close of each fiscal year, beginning with FY 23, the bill
authorizes the state comptroller to record as revenue for the fiscal year
the amount DRS received from the HUT no later than five business
days after the end of July following the end of the fiscal year.
HUT Permits (§ 1(d) & 1(e))
Application and Issuance. The bill requires each carrier to apply to
DRS for a HUT permit in the manner and with the information he
prescribes. It prohibits carriers from operating, or causing to be
operated, any eligible motor vehicle in the state without a HUT permit
on or after January 1, 2023.
DRS must grant and issue a permit to a carrier upon receiving its
fully completed application. The permit is (1) valid only for the carrier
to which it is issued and the eligible motor vehicles the carrier operates
or causes to be operated and (2) not assignable (i.e., it cannot be
transferred to another carrier). Carriers must keep a copy of the permit
in each eligible motor vehicle they operate or cause to be operated.
Suspension, Revocation, and Cancellation. Under the bill, DRS
must order a hearing if a carrier (1) fails to comply with any HUT
provision or (2) files a return for four successive months indicating that
none of the eligible motor vehicles that the carrier operated or caused
to be operated used roads in the state. During the hearing, the carrier
must show cause as to why its permit should not be (1) suspended or
revoked for failing to comply with any HUT provision or (2) cancelled
for filing returns showing no road use in Connecticut.
The commissioner must give written notice of the hearing’s date,
time, and location, personally or via registered or certified mail, at least
(1) 10 days before a hearing for failure to comply with any HUT
provision and (2) 30 days before a hearing for returns indicating no 2021HB-06688-R01-BA.DOCX
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road use in the state. If the commissioner revokes or suspends a permit
after a hearing, he must not restore it or issue a new permit to the
carrier until he is satisfied that it will comply with the HUT. If he
cancels a permit, he must not issue a new one until he is satisfied that
the carrier will use roads in the state.
Tax Collection and Enforcement (§ 1(f)-1(n) & 1(p))
The bill applies various collection, enforcement, and appeals process
provisions to the HUT that apply to other taxes under existing law.
They include the following:
1. The DRS commissioner may (a) impose a deficiency assessment
and penalty; (b) impose record retention requirements on
taxpayers and examine all of their records; (c) administer oaths,
subpoena witnesses, and receive testimony; and (d) collect the
tax and any penalties using the same methods for collecting
unpaid admissions and dues taxes (i.e., tax warrants, liens
against real property, and foreclosure against that property).
2. Carriers may (a) request a hearing from the commissioner on
the amount of fees or related penalties they must pay and
appeal the hearing decision to Superior Court if aggrieved and
(b) apply for a refund if they believe they overpaid the HUT.
Table 3 lists the penalties in existing law that the bill applies to the
HUT. Additionally, any person that knowingly violates a HUT-related
provision for which a penalty is not provided must be fined $1,000.
Table 3: Penalties Applicable to the HUT
Action Penalty
Deficiency assessment Amount of deficiency plus 1% monthly interest
10% of deficiency amount or $50, whichever is greater, if
the deficiency was due to negligence or intentional
disregard
25% of the deficiency amount if the deficiency was due to
fraud or an attempt to evade
Return made by DRS
commissioner when no return
10% of the tax due or $50, whichever is greater, plus 1%
monthly interest 2021HB-06688-R01-BA.DOCX
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has been filed
Willful failure to pay tax, file
return, keep records, or supply
information
Up to one year of imprisonment, fine of up to $1,000, or
both, in addition to any other penalty provided by law
Willful delivery or disclosure to
DRS commissioner of false or
fraudulent documents
Class D felony (i.e., up to five years' imprisonment, fine of
up to $5,000, or both), in addition to any other penalty
provided by law
Willful failure by a person,
other than a carrier, that is
required on the carrier's behalf
to collect, truthfully account
for, and pay the HUT
Total amount of tax evaded, not collected, or not
accounted for and paid, including any penalty or interest
attributable to the above violations
Applies in addition to other penalties the law provides
BACKGROUND
Related Bill
sHB 6443 (File 638), reported favorably by the Finance, Revenue and
Bonding Committee, contains an identical provision establishing a
highway use tax (§ 42).
Special Transportation Fund
The STF is a dedicated fund used to finance the state’s
transportation infrastructure program and operate the departments of
Motor Vehicles and Transportation (CGS § 13b-68). The law requires
that specified tax revenue (e.g., fuel taxes and a portion of sales and
use tax revenue) and various transportation-related fees, fines, and
charges be credited to the STF. By law, STF revenue is pledged to
Special Tax Obligation (STO) bonds issued for transportation projects
through DOT’s capital program (CGS §§ 13b-74 to 13b-77), and its
resources must be used first to pay off STO bond debt service.
Both the state constitution and the general statutes contain a
“lockbox” provision, which preserves the STF as a perpetual fund;
requires that the fund be used exclusively for transportation purposes,
including paying transportation-related debt; and requires that any
funding sources directed to the STF by law continue to be directed
there, so long as the law authorizes the state to collect or receive them
(Conn. Const., art. III, § 19; CGS § 13b-68(b)).