Connecticut Highway User Fee To Be Imposed January 1, 2023
The State of Connecticut, through a bill passed by the state legislature, will begin imposing its Highway User Fee beginning on January 1, 2023.
This fee will be the most in-depth and administratively difficult tax to file in the country. There are significant issues that TRALA has been working to address but ultimately, it appears a legislative fix is the only option available to amend how the user fee is administered.
The fee will impact all heavy-duty trucks, essentially class 8 and above, by requiring any carrier that operates such a vehicle in the state of Connecticut to obtain a permit through the Connecticut Department of Revenue Services (DRS) website. There are no trip permits available, meaning that even if you have one vehicle traveling through the state on a one-day rental, the carrier would be required to register with the DRS.
You can find out more about the fee and how to receive a permit by clicking here.
As currently written, a lessor or any third party, cannot use their own account to file/pay the user fee for a carrier. The lessor may file for a carrier once they program that into the system at DRS but there is also no way to group all lessee accounts into one filing. What this means is that for a TRALA member, you can upload in bulk for a single carrier account, but the lessor would be responsible for uploading for each account/lessee.
In addition, the DRS is requiring the taxpayer to provide each individual vehicle's plate number, state in which the vehicle is registered, the VIN, and the beginning odometer as well as how many miles the vehicle traveled in Connecticut. Carriers would be responsible for filing every month. There is no other state currently that requires this many layers of information. It will be critical for TRALA members to explain the Connecticut Highway User Fee requirements to its customers and then to work with those customers to either provide the information needed to file or to coordinate how to register each carrier with the state and allow the lessor to file the pertinent information with the state.
While the state does not anticipate targeting carriers with respect to the user fee initially in 2023, nor does enforcement seem to be finalized on what the penalties would be if a vehicle did not have a permit, there is always the risk that a vehicle could be pulled over for inspection or another violation and it then be determined that the vehicle did not have the proper user fee permit and be cited for non-compliance.
TRALA met via a Zoom call with DRS leadership on November 21 to explain the difficulties that this fee will present to the truck renting and leasing industry. While sympathetic, DRS legal counsel stated that statutorily they cannot alter the filing procedures without a legislative change. DRS told TRALA that they were in the process of sending out notices to more than 400,000 carriers across the country to let those companies know of the requirements to the Highway User Fee, including the fact that all carriers that qualify, must register with the state and then obtain a permit in order for the DRS to collect the fee.
The Connecticut legislature has a special session that begins in the next few weeks. While it is unlikely that the state legislature would consider this issue in a special session, TRALA and the Motor Truck Association of Connecticut will attempt to lobby and educate leadership in both parties of the severity of the problem facing our industry in hopes of making some changes to soften the impact during the special session and if not, in next year's legislative session that begins in January.
Please send questions to Jake Jacoby at email@example.com