Tax Collector Seeks New Law to Add Surcharge to Delinquent Car Taxes
Westport Tax Collector George Underhill doesnt particularly want to do it, but he says the state has left him little choice Җ so he is asking for a new town ordinance allowing him to levy a $5 surcharge on delinquent car taxes.
It amounts to another state unfunded mandate,Ӕ he said.
Underhills request will be heard by the Representative Town Meeting (RTM) at its Oct. 7 meeting. It will automatically be held over one meeting before the RTM can act on the measure.
The request for the new law stems from a new state law that imposes a 50-cent charge on municipalities for every name entered into the Department of Motor VehiclesҒ (DMV) database of delinquent tax accounts.
Owners of such cars are unable to register them until local taxes are paid. Over the years, Westport and other municipalities have collected substantial amounts of delinquent taxes because of the system.
To offset the 50-cent fee, the state law enables municipalities to pass a local ordinance imposing the $5 surcharge.
It may sound like a good deal for the town, but Underhill said because of the complexities of the system and the requirement for towns to pay the DMV up front before it will add the names to its database, it really isnt.
ғIts more work for us and thereҒs no guarantee we will collect enough money to pay the states fee,Ҕ he said. People move, names change, cars are sold, etc.,Ӕ he said.
The governors budget originally had called for elimination of the DMV matching registration system, thereby saving the state $225,000. When municipalities protested, the new law was passed, Underhill said.
Westport has about 18,000 motor vehicles that are delinquent on taxes, according to Underhill, representing more than $4 million in uncollected revenue, including interest.
This means a $9,000 cost to upload the data and, if the ordinance is passed, allow the town to collect as much as $90,000 to cover its costs—but with no certainty it actually will.
The Westport official said local taxes on motor vehicles bring in about $7 million per year, or about 5 to 7 percent of total tax revenue collected.
Anticipating arguments that the $5 fee may be too steep, Underhill said the state legislation does not permit him to charge a lower fee.
ғBesides, he said, ԓthis is a penalty for late payment. If we didnt have a penalty, everyone would pay late, if at all.Ҕ