HARTFORD – Today, Senate President Martin M. Looney (D-New Haven), Senate Majority Leader Bob Duff (D-Norwalk), and fellow Democratic state senators called on the Connecticut Department of Revenue Services (DRS) to change its interpretation of the sales tax application to meals. The Democratic Senators believe this unexpected interpretation from DRS does not reflect the legislative intent that was clear to all parties during budget negotiations.
In the letter the Democratic Senators state:
“We were shocked to see that DRS has somehow interpreted the language in the budget (PA. 19-117) to significantly broaden the base on what meals and beverages would be covered by the sales tax. This interpretation goes against the legislative intent of the new law and against the interpretation of the new law by all three of our nonpartisan offices.”
Full text of letter:
September 16, 2019
Commissioner Scott D. Jackson
Department of Revenue Services
450 Columbus Boulevard
Hartford CT 06103
Dear Commissioner Jackson:
We are writing in reference to the recent Department of Revenue Services Policy Statement (PS 2019(5)) that was issued on September 6, 2019.
We were shocked to see that DRS has somehow interpreted the language in the budget (PA. 19-117) to significantly broaden the base on what meals and beverages would be covered by the sales tax. This interpretation goes against the legislative intent of the new law and against the interpretation of the new law by all three of our nonpartisan offices.
As you may be aware, this language was incorporated in Raised Bill 7408 that was heard by the Finance, Revenue and Bonding Committee on April 10, 2019. Unfortunately, as has become commonplace, DRS did not testify on this bill, so if DRS did think this language would drastically increase the base of taxable items, that opinion was not shared with the General Assembly.
Subsequently, when this language was included in the tax package that was voted out of the Finance Committee (SB 877), again we were not given any DRS input on this interpretation.
Furthermore, during our extensive budget negotiations, and discussions of the fiscal implications of this language in the final budget, never did DRS or the Office of Policy and Management indicate that their interpretation of this language was any different than that of our Office of Fiscal Analysis or Office of Legislative Research.
This unexpected interpretation from DRS would lead to a drastically different fiscal note from OFA and a significant change to our budget assumptions currently adopted, something that was never intended by the General Assembly or the administration.
We are asking that DRS, in consultation with OPM, revise this Policy Statement to more accurately reflect the legislative intent that was clear to all parties during our budget negotiations.