September 23, 2019

Department Of Revenue Services Changes Interpretation Of ‘Grocery Tax’ After Pressure From Senate

Today, State Senator Will Haskell (D-Westport) applauded an announcement made late last week by the Department of Revenue Services, stating the department was revising its initial interpretation of language included in the 2019-2020 biannual state budget.

Recently referred to by members of the media as a “grocery tax,” the language in question intended to increase the 6.35 percent tax levied on prepared foods in restaurants and grocery stores to 7.35 percent. After the DRS broadened the scope of the language to include many items never intended to be taxed, the department made revisions in response to queries from government officials.

“My colleagues and I passed a budget that did not impose this new tax, and we told the administration to follow the letter and the spirit of the law. In response to our letter and other activism across the state, the administration fixed this error and called off the tax,” said Sen. Haskell. “Connecticut is not in the business of taxing most groceries. Since the sales tax was enacted in 1947, nearly every single one of the groceries my constituents buy in the local supermarket have not been subject to the sales tax. That’s because we know families work hard to put food on their table, and we’ve got to make sure every generation can afford to live in Connecticut. On top of that, we all know regressive taxes hit low-income families and seniors on a fixed income the hardest.”

Earlier this year, legislators worked to develop a slight increase in the “meals tax,” increasing the charge on prepared meals from 6.35 percent to 7.35 percent. This language was intended to only increase that charge on a meal or product sold at an eating establishment, caterer or grocery store. When reviewed by DRS, the language was misinterpreted due to the use of the word “grocery store” and applied to a wider group of food products than intended. According to a letter sent by DRS Commissioner Scott D. Jackson on September 19, the DRS misread the intent, as the General Assembly “did not expand the applicability of the tax.”

This is the second time this year Senator Haskell fought back against a proposed “grocery tax.” Late last year, the bipartisan Commission on Fiscal Stability and Economic Competitiveness made a recommendation to the Governor’s office of taxing groceries 2 percent. This is a proposal that Senator Haskell does not support.