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Sales Tax Exemptions

Two Sales and Use Tax Exemptions for Purchases or
Leases of Fuel-Efficient Passenger Motor Vehicles


UPDATED:  For more current information on this exemption, please go to
IP 2009(27), Sales and Use Tax Exemptions for
Purchases or Leases of Fuel-Efficient Passenger Motor Vehicles

Guidance for Both Exemptions: The two sales and use tax exemptions described below apply to purchases or leases of fuel-efficient passenger motor vehicles.

Passenger motor vehicles are frequently offered in different configurations (such as different choices of engine, transmission, and other major options) and the configurations may impact whether a particular passenger motor vehicle qualifies for exemption. 

The exemptions apply to the purchase or lease of a new or used qualifying passenger motor vehicle from a motor vehicle dealer and to the purchase of a used qualifying passenger motor vehicle directly from a non-dealer owner.

In determining whether passenger cars have a certain United States Environmental Protection Agency (USEPA) mpg rating (and, thus, whether their purchase or lease is exempt from Connecticut sales and use taxes), the Department is utilizing the improved methodology that USEPA put into place, beginning with model year 2008, to determine MPG ratings. The improved methodology results in MPG ratings that more accurately represent real world driving conditions. For most vehicles, the improved methodology will mean a lower MPG rating than would have resulted from utilizing the old methodology. The Department is utilizing the improved methodology for all vehicles purchased or leased on or after January 1, 2008, including pre-model year 2008 vehicles.   

The Department will update this list of qualifying vehicles as new vehicles are made available for purchase.