SOUTHINGTON - Speaker of the House Joe Aresimowicz, D-Berlin, Southington, has introduced legislation to aid Volkswagen diesel model owners victimized by the German automaker’s emissions circumvention scheme.
Though VW is providing monetary settlements for affected customers that can go toward a new vehicle, consumers are subject to state sales tax on the full retail price of a replacement car. Aresimowicz’ bill would consider any settlement used for a purchase of a replacement as “trade-in” value, thus significantly lowering the purchase price subject to sales tax.
Bruce Truax, a Southington resident and constituent of Aresimowicz, brought the concern to the Speaker last year. Truax paid about $2,000 in sales tax on his $32,000 2015 VW. By using his expected settlement of about $30,000 to purchase a new 2017 model, he would have to pay another $2,000 in sales tax under current law.
“In effect consumers are getting penalized for the wrongdoings of Volkswagen Corporation and no fault of their own,” Aresimowicz said. “I’ve always said some of the best ideas come from constituents, and this is another example. Mr. Truax deserves credit for this bill that could help thousands of Connecticut residents.”
Almost 12,000 diesel VWs were sold in Connecticut during the affected years 2009-2015. Connecticut’s portion of Volkswagen’s U.S. settlement is about $15 million, which is in addition to the company’s payments to individuals.
Truax testified before the legislature’s Finance Committee on the bill (H.B. No. 7315) Tuesday afternoon.
“Unfortunately, we will be given a check from VW and when we use that check to purchase another car we will be responsible for paying sales tax on the entire purchase price,” Truax testified. “We just paid sales tax in 2015 for this car. Since we are not ‘trading in’ this car, we will be responsible for paying the tax for a second time in a couple of years.”