Property Taxation in Connecticut

November 11, 1999 Published Work


Presented at the Ninth Annual Connecticut State Tax Issues Update '99 November 11, 1999.
Reprinted with permission from
PESI.

INTRODUCTION

Each of the 169 towns of the State of Connecticut is empowered to assess and collect property taxes. The powers of the towns are defined and limited by State statutes, specifically, Sections 12-40 through 12-195h. of the General Statutes. By the provisions of Section 12-122, a town is required to levy such property taxes as are estimated to be required to pay all of the current expenses of the town after taking into account all other revenue sources.

All powers of the Commissioner of Revenue Services under the General Statutes that relate to municipal finance and the assessment and taxation of property are delegated by Section 12-1c. to the Secretary of the Office of Policy and Management (hereafter "OPM"). In a reorganization of OPM by the General Assembly in the 1991 Session, under Section 12-2b, as amended by P.A. 91-343, Sec. 4, the Secretary of OPM shall: (1) Promote uniformity throughout the state in municipal assessment practices, procedures and administration; (2) recommend municipal assessment practices and procedures; (3) issue uniform guidelines pertaining to methods and techniques for property valuation, appraisal and assessment; (4) assist municipal assessors by preparing manuals, handbooks of rules and regulations, and digests of property tax laws suitably annotated; (5) develop schedules of unit prices for property classified under Sections 12-107a to 12-107e, inclusive, update such schedules by October 1, 1990, and every five years thereafter, and make such data, studies and schedules available to municipalities and the public; (6) develop regulations setting forth standards and tests for: certifying revaluation companies and their employees, which regulations shall ensure that a revaluation company is competent in appraising and valuing property, certifying revaluation companies and their employees; requiring that a certified employee supervise all valuations performed by a revaluation company for municipalities, maintaining lists of certified revaluation companies and upon request, advising municipalities in drafting contracts with revaluation companies, and conducting investigations and withdrawing the certification of any revaluation company or employee found not to be conforming to such regulations.

For a discussion of the legislative history of Section 12-2, see Chamber of Commerce of Greater Waterbury v. Lanese, 184 Conn. 326 (1981).

OPM is a co-sponsor of the publication of the Handbook for Connecticut Assessors, also published jointly by the Connecticut Association of Assessing Officers and the Institute of Public Service of the University of Connecticut. The Handbook, revised to 1992, is a work useful to any person practicing in the area of property taxation and may be obtained by writing to the Connecticut Association of Assessing Officers (hereinafter "CAAO"), c/o Assessor's Office, 126 Church Street, Putnam, CT 06260.

I. THE ASSESSMENT PROCESS

A. Introduction.

Public Act 99-189, effective for the grand list of October 1, 1999, made sweeping changes in the assessment process, including changes in some familiar terminology. No longer is property "listed" by a taxpayer; it is "declared." The word "audit" now expressly appears in Section 12-53 as a process for discovering omitted property. The statutory requirement for a "hearing" as part of the audit process has disappeared.

B. Declaration of Property.

1. Exemptions . As heretofore no declaration is required for real estate or motor vehicles registered in the State.

2. Personal Property. In each year a taxpayer must file a declaration of personal property owned by him on October 1 which shall not include the following:

Machinery used in mills and factories, cables, wires, poles, underground mains, conduits, pipes and other fixtures of water, gas, electric and heating companies, leasehold improvements classified as other than real property and furniture and fixtures of stores, offices, hotels, restaurants, taverns, halls, factories and manufacturers.

3. Form and Timing of Declaration. A declaration must be filed before the first of November immediately following the October 1 assessment date. An assessor may grant a filing extension of up to 45 days for "good cause." OPM has prescribed a declaration form (Form M-15) for the listing of personal property, and this form is mailed to taxpayers with instructions for completion. In most towns a "confidential report" will accompany the declaration on which the taxpayer is required to report the cost of all taxable personal property and the value thereof after certain rates of depreciation. CAAO and OPM have developed a "Confidential Property Report" which has been adopted by over 100 municipalities and represents an important step in achieving uniformity in property tax administration. By a provision added in P.A. 99-189, no commercial or financial information contained in a declaration is to be open for public inspection.

C. Special Listing Situations.

Non-residents owning tangible personal property located in any town for three months or more during the assessment year immediately preceding the assessment date are required to list such property, and Section 12-43 provides that, "such personal property shall not be liable to taxation in any other town in this state." The Statute does not answer the difficult question of what happens where movable property is located for three months or more in more than one town.

Where real property is held by a life tenant, Section 12-45 requires it to be listed in the name of person in possession, but the real property itself is subject to the provisions for lien and collection of property taxes hereafter to be discussed.

D. Assessor's Powers with Regard to Omitted Property.

Where the assessor has reason to believe that property has been omitted from the taxpayer's list of taxable property, he can pursue one of two courses:

1. Under Section 12-53(b), the assessor may add property to the declaration of taxable property at any time prior to January 31 following the assessment date.

2. If the assessor for any reason does not or cannot act within such time, he may under Section 12-53(c) give notice to the taxpayer within three years of the due date of the filing of a declaration of an audit of personal property required to be declared. The notice may direct the taxpayer to appear before the assessor with his records for examination under oath relating to the omitted property or the valuation thereof. If the assessor discovers at the hearing that property has been omitted, he may add the same to the declaration. The statute expressly provides immunity from criminal prosecution on account of testimony or documentary evidence produced at such a hearing and states that the taxpayer shall not be excused from giving testimony or producing documents on the grounds of self-incrimination.

3. Public Act 99-189 defines "omitted property" expansively to mean "property for which complete information is not included in the declaration required to be filed by law with respect to either the total number and type of all items subject to taxation or the true original cost and year acquired of all such items."

4. Public Act 99-189 added to Section 12-53(c) the following provision concerning the audit: "The methodologies used to determine the value of such property during such audit shall remain consistent with the methodologies requested by the assessor to determine the value of such property for the grand list year to which such audit or audits relate." To that extent the legislation modifies the 1997 Supreme Court decisions which held that assessors have the power to revalue by any method personal property previously listed and included in a filed grand list. United Illuminating Company v. City of New Haven, 240 Conn. 422; Southern Connecticut Gas Co. v. City of Bridgeport, 240 Conn. 469; and Hubbell, Incorporated v. City of Bridgeport, 240 Conn. 475 (companion cases all decided April 22, 1997).

5. Where a taxpayer contests the addition of property to his declaration of taxable property, he may appeal in the same manner as if the assessed value were involved, and if the Board of Assessment Appeals is not in session, the matter may be taken before the next succeeding session of the board. A taxpayer may pay "under protest" any tax resulting from addition of property to the tax list, and no interest will be assessed if at least 75% of the tax is paid and the taxpayer is successful.

E. Penalty for Omission of Property from List.

Where the taxpayer fails to file a declaration or where property is added by the assessor to the declaration of a taxpayer under either subparagraph (b) or subparagraph (c) of Section 12-53, he is required to assess a penalty of 25% of the amount of the added assessment. The penalty does not apply where there has been a change in valuation of previously listed property. Northeast Datacom, Inc. v. Wallingford, 212 Conn. 639, 651 (1989).

F. Increase in Assessment and Notice Thereof.

The assessor is also given the power under Section 12-55 to increase the valuation of property reported in any declaration filed by a taxpayer. If there be any such increase in assessment, the assessor is required to give notice under Section 12-55(b), which must be mailed to the taxpayer before the 10th day immediately following the date on which the Grand List abstract is signed and attested to by the assessor, that is, ordinarily on or before the 31st day of January next after the assessment date. Failure to give a taxpayer notice of an assessment increase invalidates the increase but does not invalidate the entire Grand List. Conzelman v. Bristol, 122 Conn. 218 (1936).

G. Correction of the Grand List.

Under Section 12-57 where tangible personal property has been incorrectly included in the list of property of any person, it may be removed and a certificate of correction issued by the assessor. Public Act 99-189 increased from one year to three years from the relevant tax date the period within which the error may be corrected. The remedy is available whether the error resulted from information supplied by the taxpayer or otherwise.

In addition, "clerical errors" may be corrected under Section 12-60 not later than three years following the tax due date. Use of Section 12-60 is sharply circumscribed in that it is limited to clerical omissions only and does not permit correction of errors of substance such as adding property to the Grand List. Reconstruction Finance Corporation v. Naugatuck, 136 Conn. 29 (1949). Notwithstanding, Section 12-60 was recently interpreted to allow an assessor retroactively to assess as separate parcels land which he had previously assessed as a single parcel at a lower valuation. Cov-Mill Estates v. Coventry Board of Tax Review, 3 Conn. Ops. 1225 (Superior Court 1997).

II. PROPERTY EXEMPT FROM TAXATION UNDER SECTION 12-81

A. Classes of Exempt Property.

Under Section 12-81, there are described 74 classes of property which are exempt from taxation. The issue of tax exemption is probably litigated more than any other issue in property taxation except for valuation. Here I will discuss only those classes of exempt property which one is likely to encounter in his practice.

1. The Charitable and Educational Exemption.

Under paragraph (7) of Section 12-81, property held by or in trust for a corporation organized "exclusively" for scientific, educational, literary, historical or charitable purposes and used exclusively for carrying out one of more of such purposes is exempt. Note that the corporation in question must be organized "exclusively" for one of the exempt purposes and also the property in question must be "used exclusively" for carrying out one or more of such purposes. Problems arise in this area where a charitable organization owns real property and leases a portion of it for a non-exempt purpose. Section 12-88 expressly denies the exemption where any part of real property is "leased, rented or otherwise used" for non-exempt purposes. However, an organization may claim exemption for a portion of a lot or building actually used for exempt purposes. With respect to property used for educational purposes, it is not necessary that the real or personal property be used for instruction; the exemption extends to all property of the corporation, the use of which is incidental to education, such as campuses and playing fields. Arnold College v. Milford, 144 Conn. 206 (1957). Perhaps the broadest reach of that principle was applied to the Harvard boat house and related facilities in Red Top, Inc. v. Board of Tax Review, 181 Conn. 344 (1980). Related to the exemption under Section 12-81(7), is the exemption under paragraph (58) for any real or personal property "leased to a charitable, religious or non-profit organization, exempt from taxation for federal income tax purposes." That section requires that such property be used exclusively for the purposes of such charitable, religious or non-profit organization, as in the case of property owned by such a corporation. However, the exemption is permitted only where authorized by ordinance of the municipality. The provision for such an exemption is important where an educational or charitable organization wishes to finance the construction of facilities by a sale and lease back agreement with a lender. Also closely related to the exemption under Section 12-81(7) is the exemption for college property under paragraph (8). There it is provided that the "funds and estate" of specified educational institutions shall be exempt. The institutions in alphabetical order are Berkeley Divinity School, Connecticut College, Hartford Seminary, Trinity College, Wesleyan University and Yale College. The express exemption for such college property has long been a part of the Connecticut statutes and contains the quaintly anachronistic provision that none of the institutions named shall hold real estate free from taxation affording an annual income of more than $6,000.

2. Veteran's Exemptions. In general, a veteran is entitled under Section 12-81(19) to exempt property to the amount of $1,000 from the tax. Other sections allow increased exemption for the families of veterans and disabled veterans. The relevant sub-divisions are (20), (21), (22), (23), (24), (25), and (26). I will not detail the requirements which must be examined carefully.

3. Exemption for Household Goods and Personal Effects. Under paragraphs (31), (32), (33), (34) and (35) of Section 12-81, there are exempt a variety of household furniture, furnishings, books, musical instruments, jewelry and wearing apparel of individuals.

4. Inventories. Under paragraph (50), the inventories of any manufacturing business, including raw materials, purchased parts and supplies acquired for consumption in the manufacturing process, are exempt; and, under Paragraph (54), the goods of any "wholesale and retail business" are also exempt. The Supreme Court has held that personal property that might otherwise be considered inventory under Section 12-81(54) would lose its exemption during any period of time that it was out on lease. Tyler Equipment Corporation v. Wallingford, 212 Conn. 167 (1989). The decision raises interesting and unresolved questions of enforcement, where moveable, tangible personal property, such as the construction equipment involved in that case, has been leased to users in two or more towns during a tax year, or where the lease terms require all leased property to be returned to the lessor just prior to October 1 in each year.

5. Computer Software. While not exempt from taxation under any paragraph of Section 12-81, computer software is in effect exempt by having been excluded from the kinds of personal property subject to taxation. (Section 12-71(e), added to the General Statutes by Public Act 89-251, sec. 193.)

6. New Machinery and Equipment. Public Act 90-270, Section 28, added a new paragraph (72) to Section 12-81 providing for exemption of certain new machinery and equipment. The exemption is applicable to assessment years commencing on or after October 1, 1991. The exemption was expanded by Public Act 92-193 to cover used machinery and equipment acquired on or after July 1, 1992. In general, the machinery and equipment exempt is tangible personal property installed in a manufacturing facility which is either five year or seven year property as defined in Section 168(e) of the Internal Revenue Code, the predominant use of which is manufacture, research and development or servicing, overhauling or rebuilding machinery or other products. The exemption is limited to the four full assessment years following the assessment year in which the machinery or equipment is acquired. In order to be able to claim the exemption, a taxpayer must file annually on or before the first day of November in each year a claim on Form M-65, containing a list of the machinery and equipment claimed to be exempt. Failure to file the claim is deemed to constitute a waiver of the right to exemption unless an extension of time is allowed under Section 12-81k of the General Statutes. The statute appears to require a taxpayer claiming the exemption to pay back any taxes lost to a municipality as a result of its application if the taxpayer ceases manufacturing operations or moves from the state within four years after the last year within which the exemption was claimed, and a lien is created against the equipment as security for the obligation.

B. Claiming the Charitable Exemption.

In order for an organization, exempt under the terms of Section 12-81 (7) as an organization exclusively for scientific, educational, literary, historic or charitable purposes, to qualify, it is required to file a statement on forms prescribed by OPM before the last day required by law for the filing of an assessment return, normally November 1 in the year for which exemption is claimed. The report is required to be filed thereafter quadrennially, and therefore is generally referred to as the "quadrennial report". If an organization should fail to file its quadrennial report, there is provision in Section 12-87a for an extension of time of up to 60 days, upon proof of substantial compliance with the requirements concerning submission of the statement.

1. Change of Ownership. If property subject to a tax exemption is purchased by an organization that does not qualify for tax exemption, the purchaser is liable for taxes from the date the conveyance is placed on the land records. (Section 12-81a). If an organization that qualifies for exemption acquires property, the exemption under paragraphs (7)-(16) of Section 12-81 shall be effective as of the date of acquisition, provided that a municipality has enacted an ordinance to so provide. (Section 12-81b). Because few municipalities have enacted such ordinances, it is generally prudent for a charitable organization that acquires property to file an application for exemption prior to November 1 following the date of acquisition.

2. New Construction. If real property belonging to an organization qualifying for exemption as charitable, and certain other exempt organizations, is not in actual use for charitable or other exempt purposes by reason of the absence of suitable buildings and improvements, the exemption will apply so long as construction of buildings or improvements is in progress. (Section 12-88).

Two recent cases have discussed the requirement for exemption that the construction of buildings or improvements be "in progress." In Grace N'Vessels of Christ Ministries, Inc. v. Danbury, 53 Conn. App. 866 (1999) the Appellate Court affirmed the trial court's denial of exemption for an unimproved parcel of land where the taxpayer's only claim of a religious use was that "prayer walks" were occasionally conducted on the property. In Sacred Heart University, Inc. v. City of Bridgeport, 24 Conn. L. Rptr. No. 13, 457 (Superior Court July 12, 1999) the Superior Court was faced with the taxpayer's claim that the work "in progress" requirement was satisfied when building permits were taken out for construction on the land in question. The Court rejected that claim but found that demolition of a building on the premises in preparation for new construction satisfied the test.

3. Recent Issues in Claiming the Charitable Exemption. Health care organizations, such as nursing homes, that are nonstock corporations exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code, have been claiming local property tax exemption as well under Section 12-81(7). In many cases the organizations are principally funded by Medicaid reimbursements. Some exemption applications have been granted, some denied and others compromised by agreements to have the organization make payments in lieu of taxes. There are no definitive court decisions on whether such organizations are "charitable."

III. CLASSIFICATION OF PROPERTY AS FOREST, FARM AND OPEN SPACE

A. Classification as Farm Land under Section 12-107c.

Farm land is defined to mean "any tract or tracts of land, including woodland and wasteland, constituting a farm unit." (Section 12-107b(a)). The statute does not specify any minimum acreage, but the assessor is given guidance in the statute as to what factors should be taken into account in determining whether a parcel should be classified as farmland. The factors include "the acreage of such land, the portion thereof, and actual use for farming or agricultural operations, the productivity of such land, the gross income derived therefrom, the nature and value of the equipment used in connection there-with, and the extent to which the tracts comprising such land are contiguous." (Section 12-107c(a)).

B. Classification as Forest Land under Section 12-107d.

Forest land is defined by Section 12-107b(b) as a tract or tracts of land aggregating 25 acres or more in area, bearing tree growth in such quantity and so spaced as to constitute in the opinion of the state forester, a forest area. The definition also permits two or more non-contiguous parcels aggregating 25 acres or more to constitute forest land so long as no single component tract shall consist of less than 10 acres. In order to qualify as forest land, the owner must make application to the state forester and obtain his determination that the tract constitutes forest land. (Section 12-107d(a)).

C. Classification as Open-Space Land under Section 12-107e.

Open-space land is defined in Section 12-107b(c) as any area of land which would:

. . .(1) maintain and enhance the conservation of natural or scenic resources, (2) protect natural streams or water supply, (3) promote conservation of soils, wetlands, beaches or tidal marshes, (4) enhance the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations or sanctuaries or other open spaces, (5) enhance public recreation opportunities, (6) preserve historic sites or (7) promote orderly urban or suburban development;

In order to qualify as open-space land, the town planning commission must have designated on its plan of development areas which it recommends for preservation as areas of open space, and such designation must also have been approved by a majority vote of the legislative body of the municipality. Open space land may be productive of income. For example, several golf courses in the State have been so classified.

D. Procedure for Classification and Appeal.

In order for a property owner to have land classified as farm, forest or open-space land, an application must be made to the assessor not earlier than 30 days before nor later than 30 days after the date of the assessment list, which would in each town be October 1. In the case of an application for classification as farm land, however, there is a further period of time within which an application may be made in a year in which there is a revaluation of all real property of the town, in which case the application may be filed not later than 90 days after the assessment date in such year. If there is denial of classification as applied for, the owner has the same rights of appeal as are provided by the General Statutes for taxpayers claiming to the aggrieved by action of the assessor or a board of assessment appeals. These appeal procedures will be hereafter discussed.

E. Special Exemption for Open-Space Land Owned by Tax-exempt Organizations under Section 12-107f.

Open-space land held in perpetuity for "educational, scientific, aesthetic or other equivalent passive uses, for the benefit of the public in general" is exempt under Section 12-107f from state or municipal assessments or taxes for improvements or betterments serving such land, such as water-lines, sidewalks, streets and sewers. In order to qualify, an organization must have received a determination letter from the Internal Revenue Service as to its tax-exempt status, presumably under Section 501(c)(3) of the Internal Revenue Code. Application for such exemption is to be made to "the authority making such assessment, not later than 90 days after such assessment."

F. Valuation.

While there is no express provision providing guidance on valuation of property classified as farm, forest or open-space land, there is an indication from the Declaration of Policy under Section 12-107a as to how the land should be valued. There it is declared in the public interest to encourage the preservation of farm land, forest land and open-space land, and it is further in the public interest to prevent the forced conversion of farm land, forest land and open-space land to more intensive uses as the result of economic pressures caused "by the assessment thereof for purposes of property taxation at values incompatible with their preservation as such farm land, forest land, and open-space land." OPM has, from time to time, developed schedules of recommended use values for land classified as farm, forest or open-space land.

G. Conveyance Tax When There is Change in Use and Classification.

A special conveyance tax is imposed under Sections 12-504a to 12-504h where property formerly classified as farm, forest or open-space land is sold or the use changed within ten years of the classification. The tax is imposed upon the grantor in a sale at a declining rate of the total sales price ranging from 10% if sold within the first year following the date of classification down to 1% if sold in the tenth year. A like tax is imposed under Section 12-504e if the use of the land is changed by the owner within a period of ten years from the date of classification. The classification of land as farm, forest or open-space land continues under the provisions of Section 12-504h until the use of the land is changed to a use other than that described in the application, or the land is sold by the record owner. A mere change of ownership not constituting a sale does not terminate forest land classification. Timber Trails Associates v. New Fairfield, 226 Conn. 407 (1993). Similarly, a devise of land by will does not trigger the conveyance tax, the holding period running from the date of classification of the land by the decedent. Ramsay v. Town of Southington, 2 Conn. Ops 2067 (Superior Court 1996). The same principle should apply to other classifications.

IV. PERIODIC REVALUATION OF REAL ESTATE AND PERSONAL PROPERTY

A. Required Revaluation.

Formerly Section 12-62 required that all real estate in a town be revalued for assessment purposes no later than 10 years following the immediate prior revaluation. Public Act 96-218 amended Section 12-62 to require each municipality to implement a physical revaluation every 12 years and a statistical revaluation every four years. Many assessors confessed doubt about what the General Assembly meant by a "statistical revaluation." Accordingly, CAAO supported and there was passed in the 1997 Session of the General Assembly P.A. 97-24, which makes important changes in the revaluation process. First, the Act sets forth a schedule of revaluations for each town, beginning for the 1997 list. That schedule appears in Section 12-62(b). For example, the schedule requires revaluations in Bridgeport in 1999 and in New Haven and other towns in this area, such as Hamden, West Haven and Milford, in 2000. Second, each town will after the first revaluation specified in the schedule be required to revalue all real estate every four years, a dramatic departure from the decennial revaluation rule that has applied for many years. Third, the assessor is only required to make a physical inspection of the property no later than twelve years following the preceding inspection. While the statute refers to the revaluation being performed by the assessors, generally towns engage the services of a revaluation company to perform the work. Under Section 12-2b, the Secretary of OPM is required to develop regulations setting forth standards for certifying revaluation companies and to assist municipalities in drafting contracts with revaluation companies. The revaluation company may satisfy the physical inspection required of the assessor by statute.

B. The Purpose of Revaluation.

Periodic revaluation represents an effort to provide fairness in the tax process by changing assessments to reflect current values. Were all properties to increase or decrease in valuation at the same rate, no revaluation would be necessary. Revaluation is intended to address the reality that properties appreciate or depreciate at different rates. If there are dislocations between periodic revaluation dates caused by different rates of appreciation or depreciation, there appears to be no remedy based on use of the average ratio approach. Uniroyal, Inc. v. Board of Tax Review, 182 Conn. 619 (1981). However, where a taxpayer claims to be aggrieved by a failure of a town to have revaluation within the prescribed ten-year period, he may seek the remedy of mandamus by which a court will direct the town to proceed with revaluation. Chamber of Commerce of Greater Waterbury, Inc. v. Murphy, 179 Conn. 712 (1980).

C. Assessment between Revaluation Dates.

Where real estate first becomes subject to tax between revaluation dates, the assessed value of the property as of the immediate prior revaluation date is the basis for the current assessment. Newbury Commons Limited Partnership v. Stamford, 226 Conn. 92 (1993). In that case the Supreme Court affirmed a decision in favor of the taxpayer whose appraiser had trended back a valuation of the property in 1991 (the year of the trial) to 1981 (the year of the last prior revaluation) by means of sales/assessment ratios, records of which are maintained by OPM.

D. Phase-in of Increase in Real Estate Assessments.

In rising real estate markets, such as those experienced during the 1980s, there was pressure on the General Assembly to provide some relief from sudden increases in property taxes which might result from increases in valuation. The response was an Act that provided for graduated increases in assessed values of real property, providing that the legislative body of the town so voted. The phase-in statute was held not to violate the equal protection clauses of the U.S. and Connecticut Constitutions. United Illuminating Co. v. New Haven, 179 Connecticut 627 (1980). The phase-in authority is now contained in Sections 12-62a(e) and 12-62c.

E. Residential Property Tax Credits.

Under Section 12-62d, where there has been a general revaluation for assessment years commencing October 1, 1988 a municipality may adopt a program for residential property tax relief under a formula spelled out in Section 12-62d(e). However, the same municipality may not also elect phase-in of assessment increases under Section 12-62c.

F. Personal Property Revaluation.

Under Section 12-55, an assessor may (but is not required to) revalue personal property in any year between decennial real estate revaluations. Stop & Shop Companies, Inc. v. Town of East Haven, 210 Conn. 233 (1989). In fact, in most towns there are annual revaluations to reflect additions and depreciation. This produces an anomalous situation: real property having a value of $100,000 added to the grand list of 1990 would have its value "rolled back" to the last year of revaluation, say 1985, when its value was $40,000, whereas personal property having a value of $100,000 added to the 1990 list would be valued at $100,000.

G. Relief from Revaluation: Constitutional Issues.

The U.S. Supreme Court has suggested that states have broad discretion in attempting to alleviate perceived hardships of revaluation. In Nordlinger v. Hahn, 505 U.S. 1, 112 S. Ct. 2326 (1992), the Supreme Court upheld California's Proposition 13, which effective in 1975, capped real estate taxes at 1% of a property's value, limited to 2% annual increases in assessed valuations, and allowed revaluation up to current value only where there was new construction or a change of ownership. The Court rejected constitutional equal protection claims despite the fact that the plaintiff, who had purchased her house after 1975, was paying more than 5 times more taxes than her neighbors in virtually identical houses in the same residential development. In fact, there were cases cited where homeowners were paying as much as 17 times more than their similarly-situated neighbors.

The Connecticut Supreme Court has recently embraced the reasoning in Nordlinger in upholding the constitutionality of Public Act 94-4, which authorized municipalities to postpone implementation of required periodic revaluation of real property. In Stafford Higgins Industries, Inc. v. Norwalk, 245 Conn. 551 (1998) the Court, in a 3-2 decision, supports the view that especially in the context of tax legislation there is no equal protection infirmity in a statute that does not infringe upon a fundamental right or affect a suspect group so long as the taxpayer classification in the statute is rationally related to a legitimate public interest. Here the court conceded that it was proper for the legislature to have enacted the challenged statute to protect single-family homeowners, even if in so doing, it causes commercial real estate, such as that of the plaintiffs, to bear a greater tax burden.

V. VALUATION ISSUES

A. General Rule.

The general rule of valuation is stated in Section 12-63: "The present true and actual value of all other property [other than farm, forest and open-space land, to which reference is earlier made] 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." It has been held that the best test for determination of value is ordinarily market sales. Burritt Mutual Savings Bank v. New Britain, 146 Conn. 674 (1959). However, by the provisions of Section 12-63d (added by Public Act 88-321) the assessor may not make a change in the assessed value of a parcel of real property as compared to the immediate preceding assessment list "solely on the basis of the sale price of such parcel in any sale or transfer of such parcel."

B. Uniform Valuation of Personal Property.

Public Act 99-290 provides for a uniform method of valuing and depreciating personal property. The methods apply, however, only if a municipality adopts the applicable provisions of the Act. Specifically, valuation must be based on cost of acquisition, including installation, less depreciation determined in accordance with separate schedules for electronic data processing equipment, business and medical testing equipment, machinery and equipment and all other tangible personal property (except livestock).

C. Assessment Rate.

Under Section 12-62a(b), each municipality is required to assess all property at a uniform rate of 70% of present true and actual value.

D. Special Valuation Situations.

1. Where fair market value cannot be determined by actual sales, other methods must be resorted to and courts have held that it is proper to determine value by replacement cost less depreciation. Connecticut Light & Power Co. v. Monroe, 149 Conn. 450 (1962); National Folding Box Co. v. New Haven, 146 Conn. 578 (1959).

2. For rental real estate, the comparable sales approach is the preferred method of valuation. See Carol Management Corp. v. Board of Tax Review, 278 Conn. 23, 40 (1993). Where there is insufficient data on sales of comparable property, Section 12-63b(a) mandates consideration of three methods of appraisal: "(1) Replacement cost less depreciation, plus the market value of the land, (2) the gross income multiplier method as used for similar property, and (3) capitalization of net income based on market rent for similar property." In Newbury Commons Limited Partnership v. Stamford, 226 Conn. 92 (1993) the Supreme Court refused to disturb a finding of the trial court that rejected the appraisal of the City Assessor which, in violation of Section 12-63b (a), had based valuation of rental real estate solely on a cost method. For purposes of determining the method of valuation by capitalization of net income, there are express directions contained in Section 12-63b(b). There it is provided that "market rent" shall be "the rental income that such property would most probably command on the open market as indicated by present rentals being paid for comparable space. In determining market rent the assessor shall consider the actual rental income applicable with respect to such property under the terms of an existing contract of lease at the time of such determination." The Supreme Court and Appellate Court have recently discussed the application of Section 12-63b(b) in First Bethel Associates v. Bethel, 231 Conn. 731 (1995); Heather Lyn Limited Partnership v. Town of Griswold, 38 Conn. App. 158 (1995) and Griswold Ashland Limited Partnership v. Town of Griswold, 38 Conn. App. 165 (1995).

3. Where buildings are damaged and required to be demolished, under Section 12-64a the assessed valuation of a parcel of real property may be made on the basis of the value of the land exclusive of the value of the buildings so demolished, effective on the date the demolition is completed.

4. Where the assessor determines that it would be appropriate to value real property on the basis of capitalized net income, it may, under Section 12-63c, require that the owner of the property submit annually rental and expense information applicable to the property. However, the information may only be sought under 12-63c(b) "in relation to the last three income years of the owner of such property immediately preceding a revaluation of all real property in such town as required under Section 12-62." If an owner fails to make available such information, the assessor may subject the taxpayer to a penalty equal to a 10% increase in the assessed value of the real property for the assessment year in question.

5. The impact of environmental laws on valuation in property tax matters is a subject in its early stages of development. Connecticut appears to recognize that an environmentally hazardous condition on property may affect value by the enactment of Section 12-63e, which in effect directs assessors not to reduce the value of any property due to an environmentally hazardous condition if (a) the condition was caused by the owner or (b) a successor to the owner acquired the property after notice of the condition was filed on the land records of the town where the property is located. Under the statute an owner will be deemed to have caused the condition if the Connecticut Department of Environmental Protection, the U.S. Environmental Protection Agency or a court has so determined. There are two Connecticut Superior Court cases on the subject. In Lehigh Petroleum Supply, Inc. v. Board of Tax Review, City of Norwich, 5 Conn. L. Rptr. No. 10,270 (1991), the Superior Court appeared to recognize that pollution could affect value for tax purposes, but denied relief because the plaintiff had failed adequately to demonstrate the diminution in value attributable to the pollution and furthermore found that the owner or its related predecessors in title had caused some of the pollution so as to bring Section 12-63e into play. In Burnette v. Town of Somers, 20 Conn. L. Rptr. No 1, 33 (1997), the Court refused to find that the plaintiffs' properties had no value because of contaminated water wells on the properties, listed on the State's Superfund List, and the widespread publicity of the pollution. The Court commented in rejecting plaintiffs' claim principally on failure of proof that there is "a big difference between property that is worth less and property that is worthless." A sampling of cases in other jurisdictions suggests (i) that environmental problems should be taken into account in determining assessed value; (ii) that as long as the property is being used by the taxpayer, the property will not be found to be valueless; and (iii) that proof of impaired value may be difficult. The discussion of "value in use" adopted in Appeal of Camel City Laundry Company, 472 S.E. 2d 402 (Ct of Appeals, North Carolina 1996) is helpful. Boekeloo v. Board of Review of City of Clinton, _____ Iowa _____, 529 N.W. 2d 275 (1995) supports the Burnette decision that contamination does not necessarily reduce value to zero. The companion cases of Inman Associates v. Borough of Carlstadt and GAF Corporation v. Borough of South Bound, 112 N.J. 593, 54 A.2d 38 (1988) acknowledge that value for assessment purposes may be affected by environmental factors, but leave open how the impacted property should be valued. Both rejected the valuation technique of simply deducting the cost to cure the environmental condition from value arrived at absent the condition. A New York Appellate Division case (which the New York Court of Appeals denied review) has found that the presence of asbestos in an office building would justify a reduction in assessed value to take into account the need to remove asbestos as improvements or repairs were made to the building. Bass v. Tax Commission of the City of New York, 179 A.D. 2d 387, 578 NYS. 2d 158 (Jan. 1992).

VI. PROCEDURE AND STRATEGY ON APPEALS FROM ASSESSMENTS

A. Appeal to Board of Assessment Appeals.

1. Essential First Step. If a taxpayer desires to contest the assessment of his property, he must first take an appeal to the board of assessment appeals of the town under Section 12-111.

2. Appeal Procedure. Public Act 95-283 amended Section 12-111 to require appeals to the Board of Assessment Appeals to be taken in writing on or before February 20 (unless there has been an extension granted by OPM for filing the grand list, in which case the date is pursuant to Section 12-117, as amended by Public Act 96-1, extended to March 20). This is a change from prior procedure which merely required that a taxpayer show up at a session of the former Board of Tax Review. The written appeal (on forms supplied by the town) must include the following information: a. name of property owner; b. position of signer; c. description of the property; d. name and mailing address of person to be sent all correspondence by the Board; e. reason for the appeal; f. appellant's estimate of value; and g. signature of property's authorized agent. The Board is required to notify each appealing taxpayer not later than March 1, and not less than 7 days prior to the hearing date of the date and time of a hearing. However, the Board may elect not to hold a hearing, and thus in effect deny the appeal, where the property is commercial, industrial, utility or apartment property having an assessed value greater than $500,000. A timely appeal is important, because Section 12-112 expressly provides that no relief from the doings of assessors is available unless there has been a proper appeal to the Board of Assessment Appeals; and Section 12-113 provides that the Board of Assessment Appeals has no power to reduce an assessment except through the appeal process.

3. The Board Hearing. The procedure before the Board of Assessment Appeals is informal. However, the Board will accept and may consider a taxpayer's appraisal. Keep in mind that members of the Board are laymen, most of whom have limited knowledge of valuation methods. This means that relief is rare for substantial properties or when sophisticated valuation analysis is required.

4. Where Property Added. If property is added to the list of a taxpayer or revalued under Section 12-53, which as previously indicated, might be as long as three years after the day on which the list is required to be filed, an appeal may be taken from action of the assessors to the next succeeding session of the board of assessment appeals.

B. Appeals from the Board of Assessment Appeals to the Superior Court.

1. Jurisdiction and Venue. Under Section 12-117a, a taxpayer aggrieved by action of the board of assessment appeals, may take an appeal to the Superior Court for the Judicial District where the property is located.

2. Time for Appeal. The appeal must be taken within two months from the date of mailing notice by the Board of Assessment Appeals of its action on the appeal. However, the limitation period for filing the appeal does not begin if the Board fails to send notice to the taxpayer's agent, as specified by the taxpayer. Trapp Falls Realty Holding Company v. City of Shelton, 29 Conn. App. 97 (1992) cert. denied 224 Conn. 911 (1992). That case was cited with approval in the recent case of Mary Catherine Development Co. v. Town of Glastonbury, 42 Conn. App. 318 (July 1996). Thus it would appear that the Board must in order to start the appeal time give written notice to the person and at the address specified by the taxpayer in its written appeal to the Board.

3. Procedure on Appeal.

a. Refer to Form 204.4 of the Connecticut Practice Book for the suggested form of application, citation and recognizance.

b. The municipality making the assessment is a necessary party. An appeal naming only the board of tax review (as the board of assessment appeals was formerly known) as defendant may be amended to name the municipality as defendant under the liberal interpretation of Section 52-123 by the Supreme Court in the recent case of Andover Limited Partnership I v. Board of Tax Review, 232 Conn. 392 (1995)

c. Appeals by taxpayers owning separate pieces of property may not be joined in a single appeal. Purple v. Town of East Hampton, 7 CSCR 743 (June 1992). Also, a condominium association may not bring an appeal on behalf of all unit owners. Candlewood Landing Condominium Association v. Town of New Milford, 1 Conn. Ops. 1233 (Superior Court 1995). However, a taxpayer may join in a single appeal several pieces of property on the same tax list. Mueller v. Board of Tax Review, 5 Conn. L. Rptr. 204 (Oct. 1991).

d. If, during the pendency of the appeal, a new assessment year begins, as is commonly the case, the applicant may amend his appeal as of right to include the new tax year without appearing again before the board of assessment appeals. The right to amend is not lost even when there is new construction or improvements in the property since the year of appeal. Arnold Foods Co. v. Town of Greenwich, 5 Conn. Ops. 79 (Oct. 4, 1999).

e. The Superior Court conducts a trial de novo; i.e. the proceedings before the board of assessment appeals are not considered. Yale University v. New Haven, 169 Conn. 454 (1975).

f. By Section 12-117a the Court is given the power to grant such relief "as to justice and equity appertains" and if the assessment is reduced by the Court, the applicants shall be entitled to be reimbursed for any overpayment of taxes, "together with interest and any costs awarded by the court," and the amount to which the assessment is so reduced shall continue to be the assessed value of the property on the grand list for succeeding years until the tax assessor finds that the value has increased or decreased. Taxable costs do not include the cost to the taxpayer for his appraiser's report. M. DeMatteo Construction Co. v. City of New London, 236 Conn. 719 (1996). The City did not contest the allowance as costs of the fee of the appraiser for his testimony at trial, expressly provided for by Section 52-260(f). As to interest, the Supreme Court has recently held that Section 12-117a does not mandate an award of interest to a successful taxpayer who has overpaid. Sears Roebuck & Co. v. Board of Tax Review, 241 Conn. 749 (1997). The Court there reversed the trial court, which held the taxpayer was entitled to 10% interest, the rate provided by Section 37-3a. The Supreme Court went on to say that an award of interest and the rate was within the discretion of the trial court. The Court concluded that the rate prescribed by Section 37-3a (10%) could not be exceeded, and that the trial court should hear evidence on the proper rate, including evidence relative to the rate available during the period of overassessment. Without mandated interest or cost of an appraisal report facing a municipality the leverage of a taxpayer in settlement discussions is obviously diminished

g. No Increase in Valuation. In an appeal brought by a taxpayer under Section 12-117a or an action under Section 12-119 a municipality may not counterclaim for an increase in assessed value. F.W. Woolworth v. Town of Greenwich, 44 Conn. App. 494 (1997). This holding is confirmed in Konover v. Town of West Hartford, 242 Conn. 727, 743 (1997).

h. Scope of Judicial Review. In defining the role of the Superior Court in an appeal from doings of the then board of tax review, the Connecticut Supreme Court has said, "The court must determine judicially whether the appellant has been aggrieved by such action on the part of the Board as would result in the imposition of an unjust tax. If it determines that he has, it must proceed to exercise a broad discretionary power to grant relief." National Folding Box Co. v. New Haven, 146 Conn. 578, 585 (1959), where the court was paraphrasing language originally contained in its decision in Sibley v. Middlefield, 143 Conn. 100, 105 (1956). As to methods of valuation to be applied by the court, the Supreme Court has said, "As a rule, however, '[no] one method is controlling; consideration should be given to them all, if they have been utilized, in arriving at the value of the property' Sibley v. Middlefield, supra., 107," New Haven Water Co. v. Board of Tax Review, 166 Conn. 232, 237 (1974). In fact, the Superior Court may, even without articulating its precise basis, come up with a "compromise figure" which will most accurately reflect fair market value in the view of the court. New Haven Savings Bank v. West Haven Sound Development, 190 Conn. 60, 70 (1983). Moreover, the Supreme Court has said that the Superior Court is, "not bound by the opinion of expert witnesses." Birgel v. Heintz, 163 Conn. 23, 30 (1972); see also Fox v. Mason, 189 Conn. 484, 489 (1983). However, the Appellate Court has recently held that the Superior Court may not rely on an appraisal that is inconsistent with the statutory mandate of Section 12-63b on the method of valuation to be employed for rental real property. Heather Lyn Ltd. Partnership v. Griswold, 38 Conn. App. 158 (1995).

i. Burden of Proof. The taxpayer bears the burden of establishing that the assessor has overassessed its property. Once the taxpayer has met that burden, the court then must arrive at its own conclusion of value "by weighing the opinion of the appraisers, the claims of the parties in light of all the circumstances in evidence bearing on value, and his own general knowledge of the elements going to establish value." Xerox Corp. v. Board of Tax Review, 240 Conn. 192 (1997). Under the circumstances, there is no presumption in favor of the assessor's valuation. Carol Management Corp. v. Board of Tax Review of Greenwich, 228 Conn. 23 (1993); Stamford Apartments v. Stamford, 203 Conn. 586 (1987). However, the Supreme Court has recently held (in a 3-2 decision) that if the taxpayer has not met its initial burden, the town has no obligation to present evidence in support of its assessment, and the court may give "controlling weight to the assessor's valuation ...." Ireland v. Wethersfield, 242 Conn. 550 (1997). How this will affect trial tactics is still uncertain but it invites a municipality to use only a review appraiser to attack the taxpayer's appraisal, without presenting its own expert opinion of value, with the hope that the court will uphold the assessed valuation solely on the basis that the taxpayer has not met its initial burden.

C. Other Remedies.

Section 12-119 provides taxpayers a remedy where it is claimed property is not taxable in the municipality in whose tax list the property is set or where the tax was computed on an assessment "manifestly excessive" and could not have been arrived at except in disregard of the law. Claims under Section 12-119 may be brought to the Superior Court within one year of the date the property was "last evaluated for purposes of taxation." That date has been held to mean the October 1 assessment date. Capitol Center LLC v. City of Hartford, 20 Conn. L. Rptr. No. 15, 525 (Superior Court 1998). An action under Section 12-119 is not an alternative to an appeal from a board of assessment appeals where the claim is exclusively one of overvaluation. Reynaud v. Town of Winchester, 35 Conn. App. 269 (1994); Cohn v. Hartford, 130 Conn. 699 (1944). Instead, there must be a claim of an illegal tax. Claims under Section 12-119 may be joined in a single action with an appeal from a board of tax review under Section 12-117a. Harvard College v. Town of Ledyard, 32 Conn. Supp. 139 (Court of Common Pleas 1975).

D. When Appeal Situations Arise

1. Generally, when a town revalues its real property, as it is required to do periodically under Section 12-62, there is a flurry of activity before the board of assessment appeals. These sessions are often attended by members of the staff of the revaluation company which was involved in the revaluation process and an opportunity is provided to review the data used by the revaluation company in arriving at the revised valuation. Section 12-62(c) requires that all data used by the assessors or revaluation company must be kept on file and made available to taxpayers. Because the methods used in a revaluation may not have treated a taxpayer's property fairly because of its special characteristics, appeal opportunities may be presented.

2. Assessors will add to valuation on account of new construction or major improvements or alterations to property under Section 12-53a. A taxpayer should be advised carefully to examine the method by which the assessor has made his valuation so as to determine whether a basis for appeal exists.

3. The taxpayer may have an appeal opportunity where there has been substantial damage to a building that requires total reconstruction or demolition. The assessment of the property may be changed under Section 12-64a.

4. In a depressed real estate market such as Connecticut experienced in early 1990s, questions will be raised as to whether property tax relief is available. In a year of revaluation, the answer seems clear: the valuation should reflect current market conditions because of the requirement of Section 12-62 that the assessment be at the rate of 70% of present true and actual value. However, under Section 12-63, forced sale prices are not to be applied. The General Assembly and the Courts have attempted to deal with the effect on assessments of changes in value between revaluations. Section 12-63d, added to the General Statutes by P.A. 88-321, prohibits the assessor from making a change in assessed value of a parcel of real estate "solely on the basis of the sale price of such parcel in any sale or transfer of such parcel." The legislative history of P.A. 88-321 suggests that the enactment was intended to reverse the decision of the Supreme Court in 84 Century Ltd. Partnership v. Board of Tax Review of Rocky Hill, 207 Conn. 250 (1988), which held that the assessor had the power to increase the value for assessment of a large apartment complex from about $23 million to its sale price of about $57 million.

A decline in fair market value due to market conditions, even if greater than other properties in the municipality, may not be a basis for relief, based on the principles set forth in Uniroyal v. Board of Tax Review, 182 Conn. 619 (1981); Ralston Purina Co. v. Board of Tax Review, 203 Conn. 425 (1987) and very recently in DeSena v. Waterbury, 249 Conn. 63 (June 1999). In the DeSena case the Court was called up to address claims of the taxpayer that the Ralston Purina case had created judicial exceptions to the usual rule that no interim assessments are permitted between periodic revaluations, specifically "the destruction or expansion of property, a substantial change in its use or zoning classification, or a decision of the taxpayer to go out of business." The Court concluded that such dicta in the Ralston Purina case were not intended to create exceptions to the usual rule and that in light of the statutory scheme for property revaluation, which is thoroughly outlined in the opinion, there are no exceptions to the rule except those expressly provided by statute, specifically damage to the property requiring complete destruction or total reconstruction (Section 12-64a); and new construction completed on the property (Section 12-53a.) The Court also confirmed that Section 12-55 (discussed herein at page 7) does not mandate the assessor to reduce an assessment based on a valuation change, but only permits him to do so. The new statutory scheme for revaluations every four years (if carried out) should mitigate the problems created by dramatic revaluation changes between revaluation dates.

5. In Jupiter Realty Company v. Town of Vernon, 242 Conn. 363 (1997), the Supreme Court reversed a Superior Court decision to the effect that failure to take an appeal in a revaluation year constituted a waiver of appeal rights for the period ensuing until the next periodic revaluation. It is now clear (as it appeared to be before the doubtful Superior Court decision) that an appeal may be taken in any year.

VII. PROPERTY TAX RELIEF AND ABATEMENT

A. Agreements to Fix Assessments.

With the approval of its legislative body, a municipality may enter into agreements to fix assessments for real property taxes.

1. A housing project of more than three units located in a redevelopment area, community development area or neighborhood strategy area may have its assessment fixed by agreement at not less than the assessment immediately prior to improvements for a period not to exceed 15 years from the date of completion of the project or 16 years from the date of the agreement, whichever is less. Section 12-65. A State Referee must approve the agreement as "fair and reasonable" under Section 12-65a.

2. Other types of real estate development defined in Section 12-65b.(b) may also be the subject of assessment fixing agreements under Section 12-65b.(a). The period of time for which the assessment may be fixed depends on the cost of the project. The maximum period for fixing an assessment is seven years for projects where the cost of improvements is not less that $3 million. A project is eligible if the improvements are for (i) office use; (ii) retail use; (iii) permanent residential use; (iv) transient residential use; (v) manufacturing use; (vi) warehouse, storage or distribution use; or (vii) multilevel parking in connection with mass transit.

B. Agreements to Defer Assessment Increases.

Under Section 12-65d. a municipality may designate a part thereof as a "rehabilitation area" where increased assessments attributable to rehabilitation or new construction may be deferred. Under Section 12-65e. the assessment may be fixed by agreement during the period of construction (but not to exceed seven years) and then the increase in assessment attributable to the construction may be phased-in over a period not to exceed eleven years at the rate of ten percent per year after the first year following completion.

C. Exempt or Partially Exempt "Development Property

"Development Property" may be wholly exempt under Section 7-498 for a period up to 20 years. Under the same section a municipality may enter into an agreement with a developer for payments in lieu of taxes or for payment of a part of taxes otherwise due. Section 7-498 is part of the City and Town Development Act (Ch. 114 of the General Statutes) which in general allows municipalities to acquire property, real or personal, and sell it to developers for improvement.

D. Agreements in Regard to Personal Property.

Under Section 12-65h. a municipality may enter into an agreement with the owner or lessee of a "manufacturing facility" to fix the assessment of personal property located in the facility for a maximum period of seven years when the increase in assessed value of the personal property is not less than $3 million.

E. Public Act 98-242 added provisions permitting a municipality to grant up to one hundred percent tax abatements for "information technology personal property" and real or personal property of any "communications establishment."

VIII. PROPERTY TAX RELIEF FOR ELDERLY HOMEOWNERS AND OTHERS

A. Chapter 204a of the General Statutes (Sections 12-170d through 12-170cc) provides for certain relief for elderly homeowners, renters and persons with permanent total disability. There is additional relief provided to eligible elderly property owners under Section 12-129.

B. Under Section 12-170aa, there are provisions for tax reductions for the following classes of owners of real property, namely, a person age 65 or over, or whose spouse domiciled in the same household has attained the age of 65, a person 50 years of age or over and the surviving spouse of a homeowner who at the time of his or her death was qualified for tax relief under the section, or a person who has not attained the age of 65 but is eligible in accordance with applicable federal regulations to receive permanent total disability benefits under Social Security. The amount of tax reduction provided for is allowed only with respect to a residential dwelling which is the homeowner's primary place of residence. In order to be eligible for tax reduction, a homeowner must have an income less than $20,000 per year. The tax reduction under Section 12-170aa(c) ranges from 10% to 50% of total property tax, depending upon the income of the homeowner, with stated minimums and maximums of tax reduction. Application for tax reduction benefits should be made to the assessor at any time from February 1 through May 15 of the assessment year in which the tax reduction is claimed.

C. In addition to the relief provided under Chapter 204a, an elderly taxpayer may be entitled to relief under Section 12-129b. In order to qualify, the same age requirements apply as are applicable under Chapter 204a, but the income requirements are substantially lower. Specifically, a single taxpayer must have income of not more than $3,000 per year, and a married couple less than $5,000 per year. The benefit accorded under Section 12-129b is a freezing of the tax at the level in effect for the first year in which a claim for tax relief is filed and approved.

D. In addition to tax relief for the elderly provided under Chapter 204a and Section 12-129b, a municipality, by vote of its legislative body, may under Section 12-129n provide additional tax relief to elderly taxpayers.

IX. LEVY, COLLECTION AND TAX LIENS

A. Tax Bills.

Under Section 12-142, the legislative body of each municipality shall determine whether the tax is to be due and payable in one payment, two semi-annual installments or four quarterly installments. With few exceptions, towns provide for semi-annual installments due on July 1 and January 1 of a fiscal year, which ends on June 30.

B. Interest.

Interest on delinquent taxes is provided under Section 12-146 at the rate of 18% per annum from the time the tax becomes due and payable.

C. Municipal Tax Liens.

1. A lien is created by operation of law under Section 12-172 on taxable real estate from the first of October of the year previous to which the first installment of tax becomes due until one year after the tax or first installment became due. Section 12-172 expressly provides that the lien "shall take precedence of all transfers and encumbrances in any manner affecting such interests in such item, or any part thereof." If the lien is to be continued for a period after the year following the due date of the first installment, the tax collector must file in the land records a certificate containing the name of the taxpayer, a description of the real estate and certain other information required by Section 12-173. P.A. 97-91 now permits that certificate to be filed not later than two years after the first installment of the tax is due.

2. Personal property liens are provided for by Section 12-195a et seq. If any personal property tax is not paid by the due date, the municipality shall have a lien upon "the goods situated in this state and owned by the taxpayer upon the date of perfection, or upon the goods thereafter acquired by the taxpayer." The lien shall attach and become perfected at the time when notice of the lien is filed pursuant to the filing provisions of the Uniform Commercial Code. There is provision for the protection of liens of lenders in commercial transactions for future advances under Section 12-195f.

D. Collection of Taxes.

The collector of taxes of a Connecticut municipality has a wide range of weapons at his disposal. Among them are the following:

1. A tax warrant may issue under Section 12-135 authorizing the collector of taxes or any deputy sheriff or constable to demand and collect taxes and seize property of a taxpayer.

2. A tax collector may either proceed under Section 12-157 to sell real estate on which he has levied a tax warrant, or the tax collector may proceed to foreclose a tax lien on the real property under Section 12-181.

3. In addition to all other remedies, it is provided under Section 12-161 that all taxes properly assessed shall become a debt due from the person or corporation against which they are assessed and may be recovered by an action in the name of the municipality in whose favor they are assessed.