Towns control interest rates on COVID-19 tax deferments

Residents, landlords, businesses have 3-month extension

Gov. Ned Lamont’s short-term COVID-19 tax deferment program — extended recently through April 1, 2021, by Executive Order No. 9R — gives Connecticut residents, businesses and landlords whowere financially impacted by the coronavirus pandemic a threemonth grace period on real estate, motor vehicle and personal property taxes.

But it’s up to the town where you live whether that deferment is interest-free (like Suffield, South Windsor and Bloomfield) or at a lowered interest rate (3% or less, like Berlin and Enfield). It’s also decided town-by-town whether you have to apply for deferment — like South Windsor — or if it’s granted to everyone — like Windsor.

“Each town made a decision as to what they felt was best for their individual town, and what we chose wasdeferment,” said Windsor Tax Collector Cathleen Eliot. “We chose to give it to everybody automatically.”

Astatewide list of municipalities opting for deferment or low-interest rates appears on the Office of Policy Management website.

Hartford County towns that have confirmed interest-free tax deferment (with or without application) include Avon, Bloomfield, Bristol, Burlington, Canton, East Windsor, Farmington, Glastonbury, Hartford, Manchester, Newington, Plainville, Rocky Hill, Simsbury, Southington, South Windsor, Suffield and West Hartford.

Simsbury’s application for deferment will be online starting onMonday, Dec. 28. There are also hard copies available by mail or for pickup outside the tax collector’s office. Applications are dueonJan. 31, 2021.

“We are deferred by application and low interest, same as

the summer,” Simsbury Tax Collector Colleen O’Connor wrote in an email.

East Granby, East Hartford, Hartland, New Britain, Wethersfield, Windsor and Windsor Locks are still unconfirmed. Taxpayers can visit the tax collection website for their municipality for more information.

At the height of the coronavirus pandemic last April, Lamont signed Executive Order No. 7S (amended by Order 7W), whichinstructed towns to either defer July 1 tax payments by three months at zero interest from the time they became due, or by lowering the interest rate by 1.5% to 0.25% monthly.

Under the new executive order, the deferment and low-interest programs only apply to new charges due Jan. 1, 2021, without amnesty for older delinquencies. (Normal interest rates apply to past-due taxes and charges.)

In towns where taxpayers are required to apply for deferment, a household must show a reduction in income of at least 20% due to COVID-19 because of a furlough, reduction in work hours or unemployment. A business or nonprofit must prove that its expected revenue will decrease at least 30% during the period of the deferment.

Landlords must provide documentation showing that the property “has or will suffer a significant revenue decline” due to the coronavirus and are required to offer rent forbearance to tenants equivalent to the delayed tax and utility payments they receive.

West Hartford TaxCollector Helene Lefkowitz said her town offered deferment by application last July and low-interest for those who did not qualify for deferment.

“The Council will need to either go with the same program or vote to change the program, but they will have to select something,” Lefkowitz said. “I am waiting on the final word from Council.”

Richard Roberts, an attorney at Halloran Sage who represents municipalities, said “election” into the program by towns can either be affirmative — meaning the town council, board of selectmen or governing body resolves to stay withthe same program — or by default if no official action is put on an agenda or otherwise taken by the body authorized to do so to change programs.

“At the end of the day (really at the end of the day on Dec. 30), unless a municipality takes official action to change programs and so notifies [the Office of Policy and Management] it will be deemed to have ‘elected’ to stay with the same program(s),” Roberts wrote in an email.

Sara Spodick, director of the tax clinic at Quinnipiac University, said more needs to be done to help people whoaredelinquent onmotor vehicle taxes.

“If you can’t pay these taxes, you can’t register your car, and that means you can’t legally drive a car,” Spodick said. “Somebodywho’s had a significant cut in income may find that they’re coming up on a renewal period for their registration, which would include full year or even a year and a half of unpaid taxes. Moving forward, it’s going to be a problem that really impacts our low-income communities.”