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04/28/2020 02:25 PMThe Chester Board of Selectmen voted at a regular meeting held April 22 by videoconference to adopt a three-month grace period for taxes due between April 1 and July 1, without taxpayers having to apply for it.
In explaining her rationale for supporting the deferment, Chester First Selectman Lauren Gister indicated that it would help alleviate any financial pressure on taxpayers due to a change in circumstances as a result of the new coronavirus (COVID-19) pandemic.
“I would suggest that Chester choose a deferment and that we offer it across the board,” Gister said. “First of all, people are really struggling. The people who are struggling are going to be struggling whether we give them a three percent interest rate, or whether we give them an extended grace period.”
Under Governor Ned Lamont’s Executive Orders 7s and 7w, all municipalities in Connecticut were given options to modify town tax deadlines and collection efforts by a deferral of the grace period or providing a low interest rate on delinquent taxes of 0.25 percent a month or 3 percent a year.
The extension of the grace period by three months, as opposed to the usual one-month grace period, covers the sewer and use taxes that are now due and the annual taxes due on July 1—personal property, motor vehicle and real property taxes—according to Gister.
Gister reported that after consulting with the town’s tax collector and treasurer, it was apparent that there would not be “a cash problem with paying the bills” if the deferment option was chosen.
Under the plan, escrow agents are still expected to make payments on behalf of their clients. In Chester, 45 to 50 percent of the taxes are paid by escrow, according to Gister.
“I don’t think that we’re going to have a ton of people, between the escrow and the people that would pay their taxes on time anyway, that won’t pay,” said Gister. “It seems to me almost a psychological argument because if you offer the three percent [rate], it’s still late. It’s still not doing what you’re supposed to be doing and many of these people are in this situation through absolutely no fault of their own.”
Instead of requiring residents to submit documentation that COVID-19 has impacted them financially, or that they are providing relief to others who have been affected financially, Chester opened the eligibility for deferment to all taxpayers, businesses, nonprofits, and residents. The eligibility of landlords is subject to certain criteria and documentation outlined in the governor’s executive order.
“It’s not as if we’re forgiving the taxes,” said Gister. “We’re still expecting to get the taxes, we’re just giving people a little more time to get them because we’re in this unprecedented situation.”
Information provided to the town by the Connecticut Tax Association indicated that, as of April 22, of the 95 towns had made a decision under the governor’s executive orders, 23 percent adopted the deferment option with eligibility requirements, 43 percent adopted the deferment for all, and 34 percent adopted the lower-interest program.