Connecticut business property owners have until Nov. 1 to submit their annual personal property declarations or suffer a 25 percent penalty added to the assessed value of the undeclared assets.
The risk goes beyond the penalty: failing to file subjects the property to a different depreciation schedule than the one that would apply on Nov. 1, and, if the property is tax-exempt, the status may be lost.
Here’s everything you need to know:
Who needs to file?
Those who own tangible personal property in a Connecticut municipality for at least three months out of the year that is not taxed in any other Connecticut municipality and that is used for business or other valuable purposes.
There are exemptions under state law, many of which are codified in Chapter 203 of the Connecticut General Statutes. Personal property tax declarations filed with municipal assessors are the operative documents for this purpose. Be aware, however, that even if the property is exempt, it still may need to be declared, in addition to filing the application for exemption or exemption renewal.
Why do I need to file?
The process of preparing and filing this documentation is not merely a formality or an optional submission to obtain beneficial tax treatment; it is a legal obligation codified in state statutes and other laws. If a taxpayer fails to meet the filing obligation without justifiable excuse, it could have penal consequences. Failing to comply not only incurs penalties for the year in question, but the failure could lead to additional costs in later grand list years and could compound both inaccurate assessments of the property and incorrect information in the assessor’s files.
Whom do I file with?
Declare the property with the town’s or city’s assessor. Those who have previously filed may receive an M-15 filing form in the mail prior to the due date. New filers, and those who have not been mailed the form, can obtain it from the local assessor’s office, either by downloading it at the website or personally requesting it.
What Types of Property May be Exempt?
Be sure to check for the latest exemption application forms used by the local assessor. These oftentimes are posted on the assessor’s website, but are always available upon request. These forms are updated frequently, so don’t assume last year’s form is still operative. Also, be sure to include all necessary supporting documentation.
Some of the assets that might be exempt include:
- Machinery or equipment used in the production of tangible retail products; computers used for business purposes; business furniture, fixtures, and equipment (“FFE”) used in day-to-day operations; and equipment used to service or repair this property.
- Motor vehicles, especially those used for commercial purposes, as well as certain farm machinery and livestock.
- Manufacturers’ inventory held for resale by businesses may be eligible for exemption under certain circumstances.
- Certain renewable energy systems or other sources, such as solar panels, fuel cells or wind turbines.
It cannot be taken for granted that the municipality will treat these assets as exempt. Most of the operative exemption statutes impose additional procedural requirements on the property owner, all of which they typically must meet first before the assessing authority will approve exemption status.
What Happens if I Miss the Nov. 1 Deadline?
If the declaration is not filed on time, the assessor is required to estimate the value of the property and apply an additional 25 percent assessment penalty. This can lead to significant tax liability, especially for businesses with large portfolios of business property in a particular town or city. There is even Connecticut Supreme Court precedent providing that if a personal property owner does not furnish the assessor with adequate documentation and other information to support their declaration or exemption application, then the assessor typically is permitted to use the best information available to him or her in order to place an assessment value on the property.
Can I Get an Extension Beyond the Nov. 1 Deadline?
The law allows for an extension of up to 45 days, but the request must be made in writing before Nov. 1. Be sure to check the town or city for ordinances that relate to this procedure, as different towns may have specific filing requirements or additional exemptions.
What if I am No Longer in Business?
If your business has closed or moved, don’t ignore the declaration filing requirement. Instead, complete the section on the form that provides confirmation that the business has terminated or moved, and return the form to the assessor’s office. This prevents the assessor from assuming your business is still active, which would lead to an estimated assessment and penalty.
Take Action Before Nov. 1, 2025
Harris Beach Murtha urges Connecticut businesses to review their records and ensure personal property declarations are submitted by Nov. 1, or submit an extension request as soon as possible.
If you need assistance or want more information, our Commercial Real Estate Practice Group can help. Please contact attorney Nicholas W. Vitti Jr. at (203) 653 -5435 and nvitti@harrisbeachmurtha.com; attorney Joseph D. Szerejko at (860) 240-6186 and jszerejko@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York state in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains, as well as in Boston, Massachusetts, and Newark, New Jersey.
