Under Connecticut State Statute 12-165, Wilton tax collector Phil Damato said, he is required to put together a list of “old taxes that we feel are not collectible” for the Board of Finance, known as suspense list.
“It’s a list that we feel that we’ve exhausted every angle to collect,” Damato told The Bulletin.
Damato said some reasons for these tax delinquencies include “people moving out of state and not turning in the proper paperwork; it could be because they’re deceased; it could be bankruptcies or they could be out of business with no assets.”
The current balance of Wilton’s 2015 suspense list is approximately $340,000, Damato told the board during its April 21 meeting.
This year to date, Damato said, the town has collected $2,719 on the suspense list and $4,425 in interest.
“The suspense list is still collectible, but the town doesn’t want to count it as an asset,” Damato told The Bulletin.
In other words, he said, “they don’t want to rely on that money coming in.”
Damato said the suspense list will be sent to a collection agency or the state marshal for collection and the items on it are still collectible.
When the suspense list is sent out for collection, Damato said, the town gets 100% and the debt collector or state marshal gets “a 15% charge on top of that.”
Motor vehicles
Damato said most of the items on the 2015 suspense list are out-of-state motor vehicles.
“When people move out of state, they should be registering their cars in the new state within 30 days and the majority do not,” he said.
Due to a 15-year statute, Damato said, approximately $25,000 will drop off the list by the fiscal year’s close on July 1.
“Taxes are collectible for 15 years. After the 15 years, if people want to pay them, we’ll collect them, but we can’t send out delinquent statements,” he told The Bulletin.
“It’s like a deferral — once someone pays it, we add it back in, but they are still reported to the Department of Motor Vehicles as being delinquent.”
Because taxes are due on an annual basis and motor vehicle registrations renew on a two-year cycle, according to the Connecticut Tax Collectors Association, “many taxpayers wait until they need to renew their registrations, up to 24 months after their tax bill came due, before being compelled to pay.”
“In the meantime, taxpayers can move to another town or even out of state,” according to the association, and “many taxpayers attempt to register their vehicles at out of state addresses in order to avoid the Connecticut property tax, particularly if they own expensive cars.”
Enforcement
While there are “numerous regulations concerning motor vehicle tax delinquencies,” according to the association, “the chief means of collection enforcement for these taxes remains the ‘hold’ or ‘stop’ on registrations issued by the state Department of Motor Vehicles (DMV).”
Damato said some states have been working together to collect motor vehicle tax delinquencies by having tax collectors transfer delinquency lists to motor vehicle departments.
When a tax collector submits a delinquency list, the DMV then flags the registration renewals of registrants who owe past-due property taxes.
“If [people] go to register in a different state and they owe taxes in the state they came from, they can’t register in that state,” Damato told the finance board.
According to the Connecticut Tax Collectors Association, motor vehicle departments will not renew a flagged registration or issue a new one until the taxpayer obtains a release or clearance slip from their local tax collectors, showing that their motor vehicle taxes are fully paid.
Damato said people are given 27 months to adjust their delinquencies with the assessors office.
“If they don’t do it in 27 months, it can’t be adjusted — the whole bill will still be owed,” he said.
“If they get rid of the car before the October grand list year ... the bill can still be deleted, but they have to turn in proper documentation to the assessors office.”