License Plate Fraud Costs Connecticut Towns Millions

License plate fraud is quietly draining millions of dollars from Connecticut municipalities every year, and the state agency best positioned to stop it has repeatedly walked away from the fight.

Jennifer Lineaweaver, the Stonington tax assessor who also serves as president of the Connecticut Association of Assessing Officers, pulls no punches about the scope of the problem. “This is the number one form of tax evasion in Connecticut,” she says. “Connecticut is losing millions annually and our DMV does not care.”

Lineaweaver is talking about Connecticut residents who register their vehicles in other states, chiefly to dodge local property taxes. The workarounds are not complicated. Maine plates are notoriously easy to obtain without ever setting foot in the state or establishing a real address there. Montana registrations have become a popular scheme among expensive motor home owners who want to sidestep taxes on big-ticket vehicles.

The numbers, even at the low end, are striking. Vermont admitted in recent years that 3,600 cars were registered there by Connecticut residents. Maine logged 1,400. And the problem is not confined to wealthy suburbs. In Bridgeport, City Councilman Alfredo Castillo was caught with five cars registered in neighboring Shelton, where tax rates were lower, in an attempt to save himself $1,300.

Lineaweaver says those figures almost certainly undercount the true scope of evasion. “I am absolutely certain that those numbers are extremely low,” she says.

Connecticut law is actually clear on this point. Vehicles “garaged” in a municipality, meaning regularly parked overnight, even on a public street, must be taxed in that municipality regardless of where they are officially registered. Spend your winters in Florida, come back to Greenwich every spring, and your car belongs on the Greenwich grand list.

The trouble is enforcement, or the near-total absence of it.

The Division of Motor Vehicles has shown little appetite for helping assessors close the gap. Lineaweaver recounts a particularly frustrating chapter: assessors successfully pushed for a law requiring DMV to look up any out-of-state plate upon an assessor’s request. The agency refused to comply during the single year the law was in effect, then lobbied to have it repealed. It was repealed.

DMV Commissioner Tony Guerrera points to the complexity of residency determinations. Drivers who claim legal residence in Florida or another state, and who spend at least six months and a day there, have a legitimate legal argument. But that carve-out does not cover the many drivers who plainly live and park their cars in Connecticut full time and are simply gaming the registration system.

With the state agency unwilling to act, some cities have gone looking for help elsewhere. Danbury contracted a private firm called Capital Tax Recovery to scan license plates across the city. The arrangement cost Danbury nothing upfront. The firm collected 40 percent of whatever additional tax revenue its work recovered. More than 8,000 vehicles ended up under investigation. Waterbury ran a similar effort and flagged roughly 4,000 cars. Stamford caught nearly 8,000 vehicles and recovered $1.3 million in additional tax revenue.

Those results suggest the problem is widespread across income levels and community types, from working-class neighborhoods to affluent corridors where owners of luxury vehicles or recreational vehicles are especially motivated to minimize their tax exposure.

Many towns have also opened anonymous tip lines, allowing residents to report neighbors with suspicious out-of-state plates. There is also a blunter enforcement tool available at the local level: towns can require proof of local residence before issuing a dump sticker or beach pass. A driver who cannot produce that proof while sporting Montana plates may find the informal perks of Connecticut residency are harder to claim than the tax savings.

The broader picture Lineaweaver describes is a structural failure. Local assessors have the legal authority and the motivation to pursue this revenue. They lack access to the data that would make enforcement practical at scale. Until the state DMV either reverses course or faces serious legislative pressure to cooperate, municipalities across Fairfield County and beyond will keep absorbing losses that a determined tax evader can create in an afternoon with an out-of-state registration form.