Senate Bill No. 1188 establishes a property tax exemption for real and personal property located on reservation land held in trust for federally recognized Indian tribes. This exemption applies to both Indian and non-Indian owned properties, thereby broadening the scope of tax relief. The bill amends Section 12-81 of the general statutes by adding subdivision (84), which specifically states that such properties are exempt from property taxes effective October 1, 2025, and applicable to assessment years commencing on or after that date.

The bill is expected to have a fiscal impact on municipalities, particularly Ledyard and Montville, which have historically collected approximately $600,000 each in personal property taxes from properties that would now be exempt. This could lead to a reduction in their grand lists starting in FY 27. However, it is anticipated that towns may adjust their mill rates to mitigate any potential revenue loss resulting from the exemption. The bill aligns with existing federal law that limits the taxation of federally recognized tribes and their properties, reinforcing the legal framework surrounding property tax exemptions for Indian lands.

Statutes affected:
Raised Bill: 12-81
PD Joint Favorable: 12-81
File No. 202: 12-81