CT Department of Revenue Services updates policy on grocery tax

The Department of Revenue Services has updated its guidance on how the recently adopted law on adding a tax surcharge on prepared foods sold in grocery stores will be applied.

The revised policy statement maintains that grocery stores should apply the new 7.35% sales tax rate on prepared foods, due to go into effect Oct. 1, only to items already subjected to the sales tax, as state lawmakers say was their intention. Examples include prepared foods served as part of a supermarket catering service; a takeout meal bought at a deli counter; and a meal purchased for consumption on premises.

The original DRS guidance cast a wide net over the definition of “prepared meal,” including the likes of doughnuts, beer, wine and hot chocolate.

“The original guidance created by DRS was too broadly interpreted and not reflective of what was intended when the budget was passed,” Gov. Ned Lamont said. “Businesses and residents depend on the guidance from these policy statements to better understand the real-world impact of legislation, and the update provided today gives a more accurate indication of how the statute on prepared foods should be applied.

“I felt it important to act swiftly, but thoughtfully and thoroughly to ensure that what was enacted was implemented,” Lamont said.

Senate Republican Leader Len Fasano, R-North Haven, who has called for a special session to examine the new tax, continued to express his general displeasure over the matter.

“I appreciate the revised guidance, but this is nothing more than a temporary pause,” Fasano said. “This whole process has been defined by an abuse of power by Democrats and the bullying of a commissioner into changing his interpretation of the law, all to cover up a tax policy Democrats passed without considering the public outrage that would follow.

“The fact that the DRS commissioner admits that there are different interpretations of how the tax can be imposed demonstrates the need to fix the law,” he said. “If Democrats won’t call a special session to actually repeal their grocery tax now, it must be addressed in the regular legislative session next year. Otherwise all taxpayers are still at risk in all future years depending on which ‘interpretation’ state leaders choose to follow.

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