On December 16, 2020, Governor Lamont signed Executive Order No. 9R, which will result in the suspension and modification of tax deadlines and collection efforts for tax bills that become due and payable on January 1, 2021.
1. Specifically, the Order provides that the two programs established under Executive Order No. 7S, Section 6, which offered relief to eligible taxpayers, businesses, nonprofits, and residents who had been economically affected by the COVID-19 pandemic, and which applied to municipal tax payments that were due and payable from April 1, 2020 through July 1, 2020, now apply to tax deadlines and collection efforts for tax bills that become due and payable on January 1, 2021.
Such programs remain titled the “Deferment Program” and the “Low Interest Rate Program.” Each municipality is required to participate in one or both programs and must notify the Secretary of the Office of Policy and Management on or before December 30, 2020, about which program or programs it is electing to participate in; however
- If a municipality elects to participate in the same program as it previously did pursuant to Executive Order No. 7S, Section 6, no approval by its local legislative body or board of selectmen shall be required; and
- Each municipality shall be deemed to have adopted the same program as previously selected under Executive Order No. 7S, Section 6 unless notification of a different election is provided to the Office of Policy and Management on or before December 30, 2020.
2. Deferment Program. Municipalities participating in the Deferment Program must offer an extended grace period, through and including April 1, 2021, of any taxes on real property, personal property, motor vehicle, supplemental motor vehicle, or municipal water, sewer and electric rates, charges or assessments for such tax, rate, charge, or assessment, to eligible taxpayers, businesses, nonprofits, and residents.
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Eligible taxpayers, businesses, nonprofits, and residents are those that can attest to, or document, or demonstrate significant economic impact by COVID-19 or demonstrate that they are providing relief to those significantly affected by the COVID-19 pandemic.
- The Guidance published by the Secretary of the Office of Policy and Management on April 17, 2020 and updated on April 24, 2020 will be updated and republished within five days of the effective date of this order and shall be used by municipalities to determine which taxpayers, businesses, nonprofits, and residents shall be considered eligible for the Deferment Program for tax bills that become due and payable on January 1, 2021.
- Notwithstanding such Guidance, a participating municipality may, upon approval of its local legislative body, or, in any town in which the legislative body is a town meeting, by a vote of the board of selectmen, extend eligibility for the Deferment Program to other categories of taxpayers, businesses, nonprofits, and residents.
3. Low Interest Rate Program. For municipalities participating in the Low Interest Rate Program, the delinquent portion of the principal of any taxes on real property, personal property, motor vehicles, supplemental motor vehicle, or municipal water, sewer and electric charges or assessments or part thereof due on January 1, 2021 shall be subject to interest at the rate of three (3) per cent per annum from the time when it became due and payable until the same is paid through and including March 31, 2021, unless such delinquent portion is subject to interest and penalties at less than three (3) per cent per annum. The portion that remains delinquent as of April 1, 2021 shall be subject to interest and penalties as previously established.
4. Eligibility of Landlords. In order for a landlord, or any taxpayer that rents or leases to any commercial, residential, or institutional tenant or lessee, to be eligible for the Deferment Program, the landlord must provide documentation to the municipality that the parcel has or will suffer a significant income decline or that commensurate forbearance was offered to their tenants or lessees. Any taxpayer that rents or leases to any commercial, residential, or institutional tenant or lessee shall be eligible for the Low Interest Rate Program only if said landlord offers commensurate forbearance to tenants or lessees, upon their request.
5. Escrow Payments. Financial institutions and mortgage servicers that hold property tax payments in escrow on behalf of a borrower will continue to remit property taxes to the municipality, so long as the borrower remains current on their mortgage or is in a forbearance or deferment program, regardless of the borrower's eligibility for, or participation in, either the Deferment Program or the Low Interest Rate Program.
6. Liens Remain Valid. Nothing in Executive Order 9R affects any provision of the Connecticut General Statutes relating to continuing, recording and releasing property tax liens. The priority and enforcement of taxes, rates, charges and assessments will remain applicable to any deferred tax, rate, charge or assessment or installment or portion thereof.
7. Application to Quasi-Municipal Corporations. Consistent with Executive Order No. 7W, these provisions in Executive Order 9R will apply to all taxes and water, sewer, or electric charges for which a municipality collects for all other quasi-municipal corporations, whether created by statute, ordinance, charter, or special act.
- This includes any town, city or borough, (consolidated or unconsolidated), as well as any village, school, sewer, fire, lighting, special services or special taxing districts, beach or improvement association, any regional water or resource recovery authority or any other political subdivision of the state or of any municipality having the power to make appropriations or to levy assessments or taxes (“quasi-municipal corporations”).
- Every quasi-municipal corporation that collects any taxes or water, sewer, or electric charges and is located wholly within a municipality will offer the same program or programs that the municipality offers, must accept the status of the taxpayer as determined by the municipality, and will not be subject to the notification requirement to the Secretary of the Office of Policy and Management.
- Every quasi-municipal corporation that collects any taxes or water, sewer, or electric charges and is located in multiple municipalities will make its own determination as to which program or programs it elects, and must provide the notice to the Secretary of the Office of Policy and Management as required for municipalities.
- The provisions regarding tax deferral and interest-rate reduction programs for relief to eligible taxpayers, businesses, nonprofits and residents who have been economically affected by the COVID-19 pandemic also apply to benefit assessments under Connecticut General Statute Section 16a-40g.
CATIC continues to monitor developments at the federal, regional, state and local levels. If you have any questions regarding the above Executive Order, please contact a CATIC Underwriting Counsel.
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Please continue to check out our dedicated webpage for COVID-19 information and guidance, on a regular basis. We will be updating the material as we learn of new developments.
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