House Bill No. 5983 proposes significant amendments to the sales and use tax rates for peer-to-peer car sharing in Connecticut, specifically establishing a new tax rate of 9.35% for rentals lasting thirty consecutive days or less, effective July 1, 2025. This change aligns the tax treatment of peer-to-peer car sharing with traditional passenger vehicle rentals. The bill also repeals subdivision (1) of section 12-408 of the general statutes and introduces updated definitions for terms related to car sharing, such as "peer-to-peer car sharing" and "car sharing platform," while excluding traditional rental vehicles from these definitions. Additionally, it maintains a 6.35% tax rate for longer rentals and includes provisions for the distribution of tax revenues to various funds, including the Regional Planning Incentive Account and the Municipal Revenue Sharing Fund.

Moreover, the bill outlines a phased increase in the percentage of tax revenues deposited into the Special Transportation Fund, culminating in a full 100% deposit starting July 1, 2022. It mandates that from September 30, 2025, 100% of certain tax revenues will be directed to the regional planning incentive account. The bill also modifies the existing excise tax structure for tangible personal property, establishing a new tax rate of 6.35% for various goods and services, while specifying different rates for hotel stays and motor vehicles purchased by active-duty military personnel. Overall, HB5983 aims to modernize the tax framework for emerging car-sharing services while ensuring consistency with existing tax regulations, with an anticipated net annual revenue gain of $900,000 for the state starting in FY 26.

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