§ 12-63 — Rule of valuation. Depreciation schedules.

Connecticut § 12-63

• Jurisdiction: Connecticut
• Title 12: Taxation
• Ch. 203: Property Tax Assessment

Text

(a) The present true and actual value of land classified as farm land pursuant to section 12-107c, as forest land pursuant to section 12-107d, as open space land pursuant to section 12-107e, or as maritime heritage land pursuant to section 12-107g shall be based upon its current use without regard to neighborhood land use of a more intensive nature, provided in no event shall the present true and actual value of open space land be less than it would be if such open space land comprised a part of a tract or tracts of land classified as farm land pursuant to section 12-107c. The present true and actual value of all other property shall be deemed by all assessors and boards of assessment appeals to be the fair market value thereof and not its value at a forced or auction sale. (b) (1) For the purposes of this subsection, (A) “electronic data processing equipment” means computers, printers, peripheral computer equipment, bundled software and any computer-based equipment acting as a computer, as defined in Section 168 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended; (B) “leased personal property” means tangible personal property which is the subject of a written or oral lease or loan on the assessment date, or any such property which has been so leased or loaned by the then current owner of such property for three or more of the twelve months preceding such assessment date; and (C) “original selling price” means the price at which tangible personal property is most frequently sold in the year that it was manufactured. (2) Any municipality may, by ordinance, adopt the provisions of this subsection to be applicable for the assessment year commencing October first of the assessment year in which a revaluation of all real property required pursuant to section 12-62 is performed in such municipality, and for each assessment year thereafter. If so adopted, the present true and actual value of tangible personal property, other than motor vehicles, shall be determined in accordance with the provisions of this subsection. If such property is purchased, its true and actual value shall be established in relation to the cost of its acquisition, including transportation and installation, and shall reflect depreciation in accordance with the schedules set forth in subdivisions (3) to (6), inclusive, of this subsection. If such property is developed and produced by the owner of such property for a purpose other than wholesale or retail sale or lease, its true and actual value shall be established in relation to its cost of development, production and installation and shall reflect depreciation in accordance with the schedules provided in subdivisions (3) to (6), inclusive, of this subsection. The provisions of this subsection shall not apply to property owned by a public service company, as defined in section 16-1 . (3) The following schedule of depreciation shall be applicable with respect to electronic data processing equipment: (A) Group I: Computer and peripheral hardware, including, but not limited to, personal computers, workstations, terminals, storage devices, printers, scanners, computer peripherals and networking equipment: Assessment Year Following Acquisition Depreciated Value As Percentage Of Acquisition Cost Basis First year Seventy per cent Second year Forty per cent Third year Twenty per cent Fourth year and thereafter Ten per cent (B) Group II: Other hardware, including, but not limited to, mini-frame and main-frame systems with an acquisition cost of more than twenty-five thousand dollars: Assessment Year Following Acquisition Depreciated Value As Percentage Of Acquisition Cost Basis First year Ninety per cent Second year Sixty per cent Third year Forty per cent Fourth year Twenty per cent Fifth year and thereafter Ten per cent (4) The following schedule of depreciation shall be applicable with respect to copiers, facsimile machines, medical testing equipment, and any similar type of equipment that is not specifically defined as electronic data processing equipment, but is considered by the assessor to be technologically advanced: Assessment Year Following Acquisition Depreciated Value As Percentage Of Acquisition Cost Basis First year Ninety-five per cent Second year Eighty per cent Third year Sixty per cent Fourth year Forty per cent Fifth year and thereafter Twenty per cent (5) The following schedule of depreciation shall be applicable with respect to machinery and equipment used in the manufacturing process: Assessment Year Following Acquisition Depreciated Value As Percentage Of Acquisition Cost Basis First year Ninety per cent Second year Eighty per cent Third year Seventy per cent Fourth year Sixty per cent Fifth year Fifty per cent Sixth year Forty per cent Seventh year Thirty per cent Eighth year and thereafter Twenty per cent (6) The following schedule of depreciation shall be applicable with respect to all tangible personal property other than that described in subdivisions (3) to (5), inclusive, and subdivision (7) of this subsection: Assessment Year Following Acquisition Depreciated Value As Percentage Of Acquisition Cost Basis First year Ninety-five per cent Second year Ninety per cent Third year Eighty per cent Fourth year Seventy per cent Fifth year Sixty per cent Sixth year Fifty per cent Seventh year Forty per cent Eighth year and thereafter Thirty per cent (7) For assessment years commencing on or after October 1, 2024, the following schedule of depreciation shall be applicable with respect to motor vehicles based on the manufacturer's suggested retail price of such motor vehicles, provided no motor vehicle shall be assessed at an amount less than five hundred dollars: Age of Vehicle Percentage of Manufacturer's Suggested Retail Price Up to year one Eighty-five per cent Year two Eighty per cent Year three Seventy-five per cent Year four Seventy per cent Year five Sixty-five per cent Year six Sixty per cent Year seven Fifty-five per cent Year eight Fifty per cent Year nine Forty-five per cent Year ten Forty per cent Year eleven Thirty-five per cent Year twelve Thirty per cent Year thirteen Twenty-five per cent Year fourteen Twenty per cent Years fifteen to nineteen Fifteen per cent Years twenty and beyond Not less than five hundred dollars (8) The present true and actual value of leased personal property other than motor vehicles shall be determined in accordance with the provisions of this subdivision. Such value for any assessment year shall be established in relation to the original selling price for self-manufactured property or acquisition cost for acquired property and shall reflect depreciation in accordance with the schedules provided in subdivisions (3) to (6), inclusive, of this subsection. If the assessor is unable to determine the original selling price of leased personal property other than a motor vehicle, the present true and actual value thereof shall be its current selling price. (9) With respect to any personal property which is prohibited by law from being sold, the present true and actual value of such property shall be established with respect to such property's original manufactured cost increased by a ratio the numerator of which is the total proceeds from the manufacturer's salable equipment sold and the denominator of which is the total cost of the manufacturer's salable equipment sold. Such value shall then be depreciated in accordance with the appropriate schedule in this subsection. (10) The schedules of depreciation set forth in subdivisions (3) to (6), inclusive, of this subsection shall not be used with respect to motor vehicles, videotapes, horses or other taxable livestock or electric cogenerating equipment. (11) If the assessor determines that the value of any item of personal property, other than a motor vehicle valued pursuant to subdivision (7) of this subsection, produced by the application of the schedules set forth in this subsection does not accurately reflect the present true and actual value of such item, the assessor shall adjust such value to reflect the present true and actual value of such item. (12) For assessment years commencing on or after October 1, 2024, for any commercial motor vehicle (A) that is modified, or (B) to which is affixed an attachment designed, manufactured or modified to be affixed to such motor vehicle, the assessor shall determine whether to value such motor vehicle and any such modifications or attachments to such motor vehicle pursuant to subdivision (7) of this subsection or section 12-41 . The assessor shall determine valuation of any modifications or attachments to such motor vehicle based on whether such modifications or attachments are intended to be permanently affixed to such motor vehicle. (13) Nothing in this subsection shall prevent any taxpayer from appealing any (A) assessment made pursuant to this subsection if such assessment does not accurately reflect the present true and actual value of any item of such taxpayer's personal property, or (B) determination of the manufacturer's suggested retail price used to value a motor vehicle pursuant to this subsection. (12) Nothing in this subsection shall prevent any taxpayer from appealing any assessment made pursuant to this subsection if such assessment does not accurately reflect the present true and actual value of any item of such taxpayer's personal property.

Legislative History

(1949 Rev., S. 1747; 1963, P.A. 490, S. 9; P.A. 96-171, S. 9, 16; P.A. 99-290, S. 1, 2; P.A. 00-230, S. 2; P.A. 02-103, S. 53; P.A. 06-83, S. 11; 06-196, S. 287; P.A. 07-127, S. 2; P.A. 11-61, S. 1; P.A. 22-118, S. 500; P.A. 23-204, S. 212; June Sp. Sess. P.A. 24-1, S. 3.) History: 1963 act made special provisions for farm, forest and open space land; P.A. 96-171 replaced “boards of tax review” with “boards of assessment appeals”, effective May 31, 1996; P.A. 99-290 added new Subsec. (b) re optional depreciation schedules for personal property and designated existing provisions as Subsec. (a), effective June 15, 1999; P.A. 00-230 made a technical correction in Subsec. (b)(10); P.A. 02-103 made a technical change in Subsec. (b)(3)(A); P.A. 06-83 added Subsec. (c) re depreciation rules for machinery and equipment, effective July 1, 2006; P.A. 06-196 made technical changes in Subsec. (c)(1), effective July 1, 2006; P.A. 07-127 added reference to maritime heritage land in Subsec. (a), effective July 1, 2007; P.A. 11-61 deleted former Subsec. (c) re depreciation rules for machinery and equipment, effective July 1, 2011; P.A. 22-118 amended Subsec. (b) by adding new Subdiv. (7) re schedule of depreciation applicable for assessment years commencing on or after October 1, 2023, redesignating existing Subdivs. (7) to (11) as Subdivs. (8) to (12), adding “other than motor vehicles” in Subdiv. (8), adding “, other than a motor vehicle,” in Subdiv. (11), and made a conforming change, effective July 1, 2022; P.A. 23-204 amended Subsec. (b)(7) by substituting “October 1, 2024” for “October 1, 2023” re applicable assessment years, effective July 1, 2023, and applicable to assessment years commencing on or after October 1, 2024; June Sp. Sess. P.A. 24-1 amended Subsec. (b) in Subdiv. (7) by changing “valued” to “assessed” and increasing the percentages of manufacturer's suggested retail prices by 5 per cent, in Subdiv. (8) by adding “other than a motor vehicle” re original selling price of leased personal property, in Subdiv. (10) by adding “motor vehicles,”, in Subdiv. (11) by adding “valued pursuant to subdivision (7) of this subsection”, by adding new Subdiv. (12) re assessment years commencing on or after October 1, 2024, and redesignating existing Subdiv. (12) re taxpayer appeals as Subdiv. (13), and therein designating existing provision re appeals of assessments that do not accurately reflect present true and actual value as Subpara. (A) and adding Subpara. (B) re appeals of determinations of manufacturer's suggested retail price, effective July 1, 2024, and applicable to assessment years commencing on or after October 1, 2024. Where assessors adopt rule of valuation conflicting with statute, remedy is by appeal to board of relief. 43 C. 309. If assessors adopt rule of valuation, assessment may be reduced on appeal to conform to such rule. 63 C. 18, 322. No distinction in law between assessed and actual value of real estate. 72 C. 372. Statute does not apply unless there is a market; if no market, then fair value must be otherwise ascertained. 99 C. 336. Cited. 102 C. 210; 105 C. 581. On capitalization of income, see 119 C. 5. Where market value not ascertainable, true and actual valuation must be determined by some other method. 122 C. 230. Property may be found to have market value in the absence of evidence of other sales of like property in open market. 125 C. 172. History of statute; valuation a question of fact for trier; not erroneous to consider reproduction cost and capitalization of income as well as actual sales prices in determining fair market value. 131 C. 575. Methods of determining “true and actual value”. 146 C. 578. Best test for determination of value is ordinarily that of market sales; land residual method discussed; value of real estate must be gauged by conditions prevailing over a period of time. Id., 669. Capitalization of net income method of valuation discussed. Id., 681. Cited. 149 C. 32. Fair market value can be determined from figure fixed by actual sales where there are sales, in ordinary course of business of other properties comparable in kind and location; where property was dam and not readily marketable, proper to resort to other means of ascertaining value as replacement cost minus depreciation. Id., 453. Although present value of all other property is fair market value, value of “farmland” is based on its current use without regard to neighborhood land use, even where plaintiffs had sold adjoining land at neighborhood values. 156 C. 107. Where plaintiffs failed to apply for classification of their farm as farmland under Sec. 12-107c, it was properly valued at its fair market value. Id., 437. Cited. 162 C. 87. Where golf course is classified as open space, it is valued on its current use and not at the highest value of farm land; in valuation of open space at current use, legislative intent is that current use value be less than what its fair market value might be; in determining “current use”, no particular formula is required. 174 C. 10. Cited. Id., 380; Id., 556. Fair market value is price that would probably result from fair negotiations between willing seller and willing buyer. 175 C. 301. Cited. 178 C. 100; Id., 295. Fair market value not determined where the one sale cited was not comparable, value realized from a forced or bid sale. Id., 606. Cited. 203 C. 425; 210 C. 233; 226 C. 407; 228 C. 23; 231 C. 731; 240 C. 192; Id., 422; 241 C. 382. Cited. 3 CA 53; 4 CA 106; 7 CA 496; 33 CA 270; 38 CA 158; 41 CA 249. Subsec. (b): A municipal tax assessor may utilize the depreciation schedule devised by the legislature in Subdiv. (6) even if the municipality has not adopted such schedule by ordinance pursuant to Subdiv. (2). 195 CA 831. Market value; methods for ascertaining. 1 CS 112. Valuation by owner placed in tax list not bar to reduction by court on appeal from board of relief. 6 CS 203. Cited. Id., 505. No other method legal for assessment if there is a market value. 8 CS 540. Cost of reproduction less depreciation proper if there is no market value. 11 CS 241. If most recent sales in same vicinity are of property held by bank, they are not a fair criterion for market value. 12 CS 47. Extensive discussion of various methods of valuation. 20 CS 476. Price index and inclusion of “factory burden” employed to determine assessment held improper. 25 CS 37.