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 tax rate for traditional passenger vehicle rentals. Additionally, the bill makes technical corrections, including updates to the definitions of "peer-to-peer car sharing," "shared vehicle," and "car sharing platform," while excluding traditional vehicle rental contracts from these definitions. The bill also maintains existing tax rates for other sales and services, ensuring a comprehensive tax structure.

Furthermore, HB5983 outlines changes to the distribution of tax revenues, mandating that 7.9% of state tax revenues be deposited into the municipal revenue sharing account for a specified period, after which it will be redirected to the Municipal Revenue Sharing Fund. The bill also establishes a phased increase in the percentage of tax revenues allocated to the Special Transportation Fund, culminating in a full 100% deposit starting July 1, 2022. A new provision requires that, beginning September 30, 2025, 100% of certain tax revenues be deposited into the regional planning incentive account. Overall, while the bill is expected to generate a net annual revenue gain of $900,000 for the state starting in fiscal year 2026, it will also result in a revenue loss of $1.9 million for existing funds due to the transition from the current 6.35% tax rate on peer-to-peer car sharing.

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