HARTFORD, CT — Gov. Ned Lamont announced late Thursday that the Department of Revenue Services has released a new policy statement that reduces the number of items that are subject to the upcoming prepared food tax.
“The original guidance created by DRS was too broadly interpreted and not reflective of what was intended when the budget was passed,” Lamont said.
DRS releases policy statements that help consumers and businesses interpret how to apply new tax changes. Connecticut passed a new law set to go into effect Oct. 1 that raises restaurant and other prepared meals tax from the base sales tax rate of 6.35 percent to 7.35 percent.
DRS’s initial policy statement released in early September included a broad scope of items that fell under the tax, including bags of lettuce that are eight ounces or less and up to five loose cookies bought at one time.
“The DRS has determined that there is an alternative, and defensible, interpretation that more closely aligns with the language of the statute and the clear intent of the Legislature,” wrote DRS Commissioner Scott Jackson in a letter to Lamont.
Below is a section of the new policy statement that details what falls under the tax:
- Catering services performed by a supermarket
- Sales of sandwiches, grinders, coffee, or tea prepared in a supermarket at a delicatessen counter or elsewhere for takeout. The sales of these items sold anywhere in a supermarket are taxable;
- Sales of meals in areas of a supermarket where food is intended to be consumed in the supermarket, such as at snack bars or food courts. The meals sold in these designated eating areas are taxable even if taken off premises by the purchaser.
Legislative Republicans decried the tax and said it would hurt middle class families. They have called for a special session to clarify the law. Republican Senate leader Len Fasano said that Republicans weren’t in favor of the extra one percent tax to begin with, but that it was up to Democrats to fix language in the bill if they wanted to keep it.
Fasano also said that changing policy statements when they become politically unpopular sets a dangerous precedent where laws can be interpreted by a handful of people.
The now-outdated original DRS policy statement interpreted the tax as follows:
· Sandwiches, grinders, and wraps;
· Popsicles, ice cream cones, cups, sundaes, and other individual servings of frozen desserts unless sold in factory prepackaged multi-unit packs; ·
Ice cream, frozen yogurt, and other frozen desserts sold in containers of less than one pint; · Salads sold at salad bars;
· Lettuce or greens-based salads sold in containers of 8 ounces or less;
· Salads that are not greens-based (macaroni, potato, pasta, fruit, etc.) sold in containers of 8 ounces or less; · Donuts, muffins, rolls, bagels, and pastries (5 or fewer);
· Cookies sold loose (5 or fewer when cookies are sold by quantity, or less than 8 ounces when cookies are sold by weight);
· Pies or cakes by the slice;
· Prepackaged or factory-sealed bags or packages of 5 ounces or less of chips, popcorn, kettle corn, nuts, trail mix, crackers, cookies, snack cakes, or other snack foods, unless sold in factory prepackaged multi-unit packs; · Pizza, whole or by the slice; · Cooked chicken sold by the piece, including buckets of chicken, and whole cooked chickens;
· Cooked ribs sold by the piece or portion and whole racks of ribs;
· Hot dogs served on a bun or heated;
· Bagels that are individually prepared; · Soup sold in containers of 8 ounces or less, unless sold in factory prepackaged units;
· Meal replacement bars;
· All beverages provided with the sale of a taxable meal;
· Food sold at a hot buffet;
· Food that is cooked to order;
· Popcorn, kettle corn, nuts and any other snack foods that are kept warm for purchase; and
· Items such as salads, side dishes, and rolls, when sold as part of family pack meals typically including, whole chickens or buckets of chicken, when prepared and sold for immediate consumption, even when the items exceed the weight or quantity limits specified above.