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General Assembly Raised Bill No. 7264
January Session, 2025
LCO No. 6363
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING INITIATIVES FOR THE COLLECTION OF
UNPAID TAXES AND THE DEPARTMENT OF REVENUE SERVICES'
RECOMMENDATIONS FOR REVISIONS TO THE TAX AND RELATED
STATUTES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 12-35c of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective from passage): 2
(a) At the request of the Commissioner of Revenue Services, the 3
Attorney General may bring suit in the name of this state in the 4
appropriate court of any other state or the District of Columbia to collect 5
any tax legally due this state; and any political subdivision of this state 6
or the appropriate officer thereof, acting in its behalf, may bring suit in 7
the appropriate court of any other state or the District of Columbia to 8
collect any tax legally due such political subdivision. 9
(b) The Commissioner of Revenue Services may enter into 10
agreements with collection agencies and attorneys for collection 11
services, for the purposes of collecting a taxpayer's unpaid taxes and 12
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penalties and interest thereon. Such collection services may be 13
performed both within and without this state and may include bringing 14
an action in the name of this state in the appropriate court of any other 15
state or the District of Columbia to collect any tax legally due this state. 16
[(b)] (c) The courts shall recognize and enforce liabilities for taxes 17
similar to the taxes imposed by this state and lawfully imposed by any 18
other state, the District of Columbia or any political subdivision of such 19
state or district, which extends a like comity to this state, and the duly 20
authorized officer of any other state, the District of Columbia or any 21
political subdivision of such state or district, may sue for the collection 22
of such taxes in the courts of this state. A certificate by the Secretary of 23
the State of such other state or the Secretary of the District of Columbia, 24
as applicable, that the officer suing for the collection of such a tax is duly 25
authorized to collect the same shall be conclusive proof of such 26
authority. A certificate by the Commissioner of Revenue Services that 27
the tax of such other state, the District of Columbia or a political 28
subdivision of such state or district is similar to a tax imposed by this 29
state shall be prima facie evidence of such similarity. 30
(d) For the purposes of this section, the words "tax" and "taxes" shall 31
include interest and penalties due under any taxing statute, and liability 32
for such interest or penalties, or both, due under a taxing statute of 33
another state, the District of Columbia or a political subdivision of such 34
state or district shall be recognized and enforced by the courts of this 35
state to the same extent that the laws of such other state or district, as 36
applicable, permit the enforcement in its courts of liability for such 37
interest or penalties, or both, due under the tax laws of this state or any 38
political subdivision thereof. 39
Sec. 2. Section 12-35h of the general statutes is repealed and the 40
following is substituted in lieu thereof (Effective from passage): 41
When an agreement has been entered into by the Commissioner of 42
Revenue Services under section 12-35c, as amended by this act, or by the 43
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state for the [Commissioner of Revenue Services] commissioner, with a 44
collection agency or attorney for the purpose of collecting a [taxpayer’s] 45
taxpayer's unpaid taxes and penalties and interest thereon, the account 46
of the taxpayer shall be credited with the amounts of such unpaid taxes, 47
penalties and interest actually collected by the collection agency or 48
attorney before such amounts are reduced by the compensation paid by 49
the commissioner to, or retained by, the collection agency or attorney 50
for collection services provided pursuant to such agreement. 51
Sec. 3. Section 12-39g of the general statutes is repealed and the 52
following is substituted in lieu thereof (Effective from passage): 53
(a) Upon notification to the Comptroller by the Commissioner of 54
Revenue Services that any taxes, including penalties and interest related 55
thereto, (1) are [(1)] due to the state from any person and unpaid and a 56
period in excess of thirty days has elapsed following the date on which 57
such taxes were due, and (2) are not the subject of a timely filed 58
administrative appeal to [said] the commissioner or of a timely filed 59
appeal pending before any court of competent jurisdiction, the 60
Comptroller shall withhold any order upon the Treasurer for payment 61
of any amount payable by the state to such person unless the amount so 62
payable is reduced by the amount of such taxes, penalties and interest, 63
provided any such amount payable by the state shall not be so reduced 64
if such amount payable is a payment of salary or wages, or any payment 65
in lieu of or in addition to such salary or wages, to a state employee. The 66
Comptroller shall promptly notify the Commissioner of Revenue 67
Services of any payment reduced under the provisions of this [section] 68
subsection. 69
(b) With respect to any payments a department or office of the state 70
is authorized to make by means other than through the Comptroller, no 71
such payment shall be made unless such department or office first 72
requests and obtains clearance from the commissioner that the person 73
to whom the payment is to be made owes no taxes, penalties or interest 74
to the state. The commissioner shall promptly notify such department 75
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or office whether such person owes any such taxes, penalties or interest. 76
If the commissioner notifies such department or office that any taxes, 77
including penalties and interest related thereto, (1) are due to the state 78
from such person and unpaid and a period in excess of thirty days has 79
elapsed following the date on which such taxes were due, and (2) are 80
not the subject of a timely filed administrative appeal to the 81
commissioner or of a timely filed appeal pending before any court of 82
competent jurisdiction, such department or office shall withhold 83
payment of any amount payable to such person unless the amount so 84
payable is reduced by the amount of such taxes, penalties and interest, 85
provided any such amount payable by the state shall not be so reduced 86
if such amount payable is a payment of salary or wages, or any payment 87
in lieu of or in addition to such salary or wages, to a state employee. The 88
department or office shall promptly notify the commissioner of any 89
payment reduced under the provisions of this subsection and remit the 90
amount withheld to the commissioner. 91
[(b)] (c) For purposes of [subsection (a)] subsections (a) and (b) of this 92
section, any taxes for general or special purposes levied by a 93
municipality, any taxes imposed under chapter 223 and payable to such 94
municipality, any fines, penalties, costs or fees payable to such 95
municipality for the violation of any lawful regulation or ordinance in 96
furtherance of any general powers as enumerated in section 7-148, or 97
any charge payable to such municipality for connection with or for the 98
use of a waterworks or sewerage system shall be treated as if they were 99
taxes due to the state, where, pursuant to section 12-2, an agreement 100
exists between the commissioner and the governing authority of such 101
municipality providing for the collection by the commissioner, on behalf 102
of such municipality, of such taxes, fines, penalties, costs or fees, or 103
charges, provided such taxes, fines, penalties, costs or fees, or charges 104
(1) are [(1)] unpaid and a period in excess of thirty days has elapsed 105
following the date on which they were due, and (2) are not the subject 106
of a timely filed administrative appeal or of a timely filed appeal 107
pending before any court of competent jurisdiction. 108
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Sec. 4. (NEW) (Effective from passage) (a) The Commissioners of 109
Revenue Services and Motor Vehicles may enter into an agreement 110
pursuant to which the Commissioner of Motor Vehicles shall not issue 111
or renew a motor vehicle operator's license or a motor vehicle certificate 112
of registration for any person from whom any taxes, including penalties 113
and interest related thereto, (1) are due to the state and unpaid and a 114
period in excess of thirty days has elapsed following the date on which 115
such taxes were due, and (2) are not the subject of a timely filed 116
administrative appeal to the Commissioner of Revenue Services or of a 117
timely filed appeal pending before any court of competent jurisdiction. 118
The agreement shall include the procedures by which the Commissioner 119
of Revenue Services will provide a list of such persons to the 120
Commissioner of Motor Vehicles, how frequently such list will be 121
updated and provided and any other provisions the commissioners 122
deem necessary to carry out the provisions of this section. 123
(b) At least sixty days prior to the provision of the list to the 124
Commissioner of Motor Vehicles, the Commissioner of Revenue 125
Services shall notify each person who owes taxes, penalties or interest 126
to the state as set forth in subsection (a) of this section of such person's 127
inclusion in the list and of such person's right to appeal such inclusion. 128
Such person may request, not later than sixty days after the date of such 129
notification, a hearing with the Commissioner of Revenue Services. Such 130
request shall be in writing and set forth the grounds on which such 131
person is contesting inclusion in such list. If such person does not 132
request a hearing or fails to request a hearing in accordance with the 133
provisions of this subsection, the Commissioner of Revenue Services 134
shall include such person in the list provided to the Commissioner of 135
Motor Vehicles. The action of the Commissioner of Revenue Services on 136
any request for a hearing shall not be subject to appeal. 137
(c) Upon receipt of the list pursuant to subsection (a) of this section, 138
the Commissioner of Motor Vehicles shall not issue or renew a motor 139
vehicle operator's license or a motor vehicle certificate of registration for 140
any person included in such list until such person has paid all such 141
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taxes, penalties and interest owed to the state or makes a payment 142
arrangement acceptable to the Commissioner of Revenue Services. 143
(d) Nothing in this section shall be construed to create any cause of 144
action to challenge the taxes, penalties or interest owed to the state by a 145
person included in such list. 146
(e) Nothing in this section shall be construed to prohibit any person 147
whose motor vehicle operator's license is not issued or renewed 148
pursuant to this section from applying to the Commissioner of Motor 149
Vehicles for a special operator's permit in accordance with the 150
provisions of section 14-37a of the general statutes. 151
Sec. 5. Subsection (k) of section 8-395 of the general statutes is 152
repealed and the following is substituted in lieu thereof (Effective from 153
passage): 154
(k) The Connecticut Housing Finance Authority [, with the approval 155
of the Commissioner of Revenue Services,] shall adopt written 156
procedures in accordance with section 1-121 to implement the 157
provisions of this section. Such procedures shall include provisions for 158
issuing tax credit vouchers for cash contributions to housing programs 159
or projects based on a system of ranking housing programs. In 160
establishing such ranking system, the authority shall consider the 161
following: (1) The readiness of the project to be built; (2) use of the funds 162
to build or rehabilitate a specific housing project or to capitalize a 163
revolving loan fund providing low-cost loans for housing construction, 164
repair or rehabilitation to benefit persons of very low, low and moderate 165
income; (3) the extent the project will benefit families at or below 166
twenty-five per cent of the area median income and families with 167
incomes between twenty-five per cent and fifty per cent of the area 168
median income, as defined by the United States Department of Housing 169
and Urban Development; (4) evidence of the general administrative 170
capability of the nonprofit corporation to build or rehabilitate housing; 171
(5) evidence that any funds received by the nonprofit corporation for 172
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which a voucher was issued were used to accomplish the goals set forth 173
in the application; and (6) with respect to any income year commencing 174
on or after January 1, 1998: (A) Use of the funds to provide housing 175
opportunities in urban areas and the impact of such funds on 176
neighborhood revitalization; and (B) the extent to which tax credit funds 177
are leveraged by other funds. 178
Sec. 6. Subsections (a) and (b) of section 12-586f of the general statutes 179
are repealed and the following is substituted in lieu thereof (Effective 180
from passage): 181
(a) For the purposes of this section, "tribe" means the Mashantucket 182
Pequot Tribe and "compact" means the Tribal-State Compact between 183
the tribe and the state of Connecticut, as incorporated and amended in 184
the Final Mashantucket Pequot Gaming Procedures prescribed by the 185
Secretary of the United States Department of the Interior pursuant to 186
Section 2710(d)(7)(B)(vii) of Title 25 of the United States Code and 187
published in 56 Federal Register 24996 (May 31, 1991), as amended from 188
time to time, and includes any new compact entered into between the 189
state and the tribe pursuant to section 12-851. 190
(b) The expenses of administering the provisions of the compact shall 191
be financed as provided in this section. Assessments for regulatory costs 192
incurred by any state agency [which] that are subject to reimbursement 193
by the tribe in accordance with the provisions of the compact shall be 194
made by the Commissioner of [Revenue Services] Consumer Protection 195
in accordance with the provisions of the compact, including provisions 196
respecting adjustment of excess assessments. Any underassessment for 197
a prior fiscal year may be included in a subsequent assessment but shall 198
be specified as such. Payments made by the tribe in accordance with the 199
provisions of the compact shall be deposited in the General Fund and 200
shall be credited to the appropriation for the state agency incurring such 201
costs. 202
Sec. 7. Subsections (a) and (b) of section 12-586g of the general statutes 203
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are repealed and the following is substituted in lieu thereof (Effective 204
from passage): 205
(a) For the purposes of this section, "tribe" means the Mohegan Tribe 206
of Indians of Connecticut and "compact" means the Tribal-State 207
Compact between the tribe and the state of Connecticut, dated May 17, 208
1994, as amended from time to time, and includes any new compact 209
entered into between the state and the tribe pursuant to section 12-851. 210
(b) The expenses of administering the provisions of the compact shall 211
be financed as provided in this section. Assessments for regulatory costs 212
incurred by any state agency [which] that are subject to reimbursement 213
by the tribe in accordance with the provisions of the compact shall be 214
made by the Commissioner of [Revenue Services] Consumer Protection 215
in accordance with the provisions of the compact, including provisions 216
respecting adjustment of excess assessments. Any underassessment for 217
a prior fiscal year may be included in a subsequent assessment but shall 218
be specified as such. Payments made by the tribe in accordance with the 219
provisions of the compact shall be deposited in the General Fund and 220
shall be credited to the appropriation for the state agency incurring such 221
costs. 222
Sec. 8. Section 12-431 of the general statutes is repealed and the 223
following is substituted in lieu thereof (Effective from passage): 224
(a) (1) Except as otherwise provided in subdivision (2) or (3) of this 225
subsection, in case of the purchase of any motor vehicle, snowmobile, 226
vessel or aircraft other than from a licensed motor vehicle dealer or 227
licensed motor vehicle lessor, a snowmobile dealer, a licensed marine 228
dealer or a retailer of aircraft, respectively, the receipts therefrom shall 229
not be included in the measure of the sales tax, but the purchaser thereof 230
shall pay a use tax on the total purchase price thereof to the 231
Commissioner of Revenue Services, as provided in section 12-411, in the 232
case of tangible personal property purchased from a retailer, and, in the 233
case of motor vehicles, vessels and snowmobiles, before obtaining an 234
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original or transferal registration, in accordance with regulations 235
prescribed by the Commissioner of Revenue Services and on forms 236
approved by the Commissioner of Revenue Services and the 237
Commissioner of Motor Vehicles, and, in the case of aircraft, before 238
obtaining an original or transferal registration, in accordance with 239
regulations prescribed by the Commissioner of Revenue Services and 240
on forms approved by the Commissioner of Revenue Services and the 241
Commissioner of Transportation. 242
(2) No use tax shall be payable in cases of purchase (A) when the 243
purchaser is the spouse, mother, father, brother, sister or child of the 244
seller, (B) when a motor vehicle or vessel is sold in connection with the 245
organization, reorganization or liquidation of an incorporated business, 246
provided the last taxable sale or use of the motor vehicle or vessel was 247
subjected to a tax imposed by this chapter and the purchaser is the 248
incorporated business or a stockholder thereof, (C) when a motor 249
vehicle is sold in connection with the organization or termination of a 250
partnership or limited liability company, provided the last taxable sale 251
or use of the motor vehicle was subjected to a tax imposed by this 252
chapter and the purchaser is the partnership or limited liability 253
company, as the case may be, or a partner or member thereof as the case 254
may be, or (D) when a motor vehicle which has been declared a total 255
loss pursuant to the provisions of section 14-16c is rebuilt for sale or use, 256
provided the purchaser was subjected to the tax imposed by this chapter 257
for the last taxable sale of said vehicle. 258
(3) When a motor vehicle in which special equipment has previously 259
been installed exclusively for the use of a person with physical 260
disabilities is sold for use by a person with physical disabilities, the 261
purchaser shall pay a use tax on the total purchase price of the vehicle, 262
less the portion of such price attributable to such special equipment. 263
Unless established otherwise, the portion of the purchase price 264
attributable to the motor vehicle shall be deemed to be the value 265
determined pursuant to subsection (b) of this section. 266
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(b) In order to determine the total purchase price of a motor vehicle 267
or an aircraft for the purposes of this section, the commissioner shall, by 268
regulation, adopt by reference a book of valuations, for various 269
purposes, of motor vehicles and of aircraft, published by [a] an 270
applicable nationally recognized organization. The commissioner shall, 271
by regulation, determine which of the various valuations of motor 272
vehicles or aircraft contained in any such applicable book is appropriate 273
for the purposes of this section and such value shall, regardless of the 274
value placed on the motor vehicle or aircraft at the time of the purchase 275
by the parties to such transaction, be presumed to be the total purchase 276
price of such motor vehicle or aircraft for the purposes of this section 277
unless the purchaser can prove to the satisfaction of the commissioner 278
that such value is incorrect. 279
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage 12-35c
Sec. 2 from passage 12-35h
Sec. 3 from passage 12-39g
Sec. 4 from passage New section
Sec. 5 from passage 8-395(k)
Sec. 6 from passage 12-586f(a) and (b)
Sec. 7 from passage 12-586g(a) and (b)
Sec. 8 from passage 12-431
Statement of Purpose:
To (1) authorize the Commissioner of Revenue Services to enter into
agreements with collection agencies and attorneys to collect unpaid
taxes, (2) require departments and offices of the state to withhold
amounts of unpaid taxes, penalties and interest from payments payable
to persons owing such taxes, penalties and interest, (3) authorize the
Commissioners of Revenue Services and Motor Vehicles to enter into an
agreement to not issue or renew motor vehicle operator's licenses or
motor vehicle certificates of registration for persons who owe taxes,
penalties or interest to the state until such amounts are paid, and (4)
implement the Department of Revenue Services' recommendations for
revisions to the tax and related statutes.
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[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]