House Bill No. 5983 proposes significant amendments to the sales and use tax rates for peer-to-peer car sharing in Connecticut, effective July 1, 2025. The bill repeals subdivision (1) of section 12-408 of the general statutes and introduces a new tax rate of 9.35% for peer-to-peer car sharing agreements lasting 30 consecutive days or less, aligning it with the existing tax rate for traditional vehicle rentals. Additionally, the bill establishes a municipal revenue sharing account and modifies the excise tax structure on tangible personal property and services, maintaining a general rate of 6.35% while introducing specific rates for various categories, including a 15% rate for hotel stays. The legislation also includes technical corrections and clarifications regarding definitions related to peer-to-peer car sharing, such as "shared vehicle" and "car sharing platform."

The bill is expected to generate a net annual revenue gain of $900,000 for the state starting in FY 26, with a total revenue increase of $2.8 million for the Regional Planning Incentive Account (RPIA). However, it will result in a revenue loss of $1.9 million for the General Fund, Special Transportation Fund, and Municipal Revenue Sharing Fund due to the shift from the existing 6.35% tax rate on peer-to-peer car sharing. Overall, HB5983 aims to modernize the tax framework for car sharing services while ensuring that new tax rates do not apply retroactively to binding sales contracts entered into before the effective date.

Statutes affected:
Committee Bill:
FIN Joint Favorable:
File No. 856: