HARTFORD, CT — Republican legislative leaders aren’t letting the Democratic majority off the hook when it comes to the 1% meals tax scheduled to go into effect on Oct. 1.
The new tax, according to guidance from the Department of Revenue Services, may impact some items at grocery stores that currently aren’t taxed. Democratic lawmakers and Gov. Ned Lamont said some of the items DRS put on its list to tax at 7.35% were never intended to be included with the new meals tax.
On Monday, Lamont asked DRS to review the guidance they issued last week.
“The Department of Revenue Services (DRS), in consultation with colleagues at the Office of Policy and Management, has started the process of reviewing policy guidance concerning meals, as directed by Governor Lamont. DRS plans to issue a revised document by the end of the week,” a DRS spokesman said.
Republicans held a press conference Wednesday at the Legislative Office Building and asked lawmakers to sign a petition and call themselves into special session to fix the language, which was adopted as part of the state budget.
Lawmakers can call themselves into a special session by submitting petitions to the Secretary of the State. A majority of lawmakers, 76 in the House and 19 in the Senate, would need to submit petitions to call a special session.
None of the Republicans present Wednesday were able to recall a time when the legislature successfully called itself back into special session, but they did it as recently as Dec. 2017.
Senate Republican Leader Len Fasano, R-North Haven, said they can’t fix this by having four or five people get into a room together and ignoring the words of a statute.
“The Democrats passed a budget that said they’re absolutely taxing groceries,” Fasano said. “But you can’t say with a wink and a nod we’re going to change it.”
House Minority Leader Themis Klarides, R-Derby, said the only way to fix this is with a special session.
Klarides, whose family used to own grocery stores, said businesses have to make a decision about what will be taxed on Oct. 1 and she would advise them to add tax to everything.
“I wouldn’t take any chances,” Klarides said,
She said that’s going to hurt consumers, seniors and the middle class and that’s “the shame of this.”
In their letter to lawmakers, Fasano and Klarides said businesses need certainty and simply reinterpreting the guidance “does not provide them with the certainty they need.”
Klarides said it’s clear based on guidance offered in 2002 that prepared foods ready for consumption are already taxed, but the DRS guidance expanded that based on the new definition in the Democratic budget.
A side-by-side comparison shows that additional items like hot dogs served on a bun, bagels that are individually prepared, meal replacement bars, soup sold in containers of 8 ounces or less, smoothies, food sold at a hot buffet, food that is cooked to order, and all beverages provides with the sale of a taxable meal will be taxed at 7.35% on Oct. 1 unless DRS changes its guidance.
Klarides said Democratic lawmakers can’t go on social media and say they’re “shocked” by the DRS guidance and then not agree to special session.
She said they can’t have it both ways.
“Leave it to the Republicans to show up yet again to make unfounded and wild accusations, and criticize our fair and balanced budget even though they failed to offer any budget of their own during the legislative session,” House Speaker Joe Aresimowicz, D-Berlin, said. “Our members have been very clear on what the intent of the budget is and our position on DRS’ policy guidance. Based on the remarks from Governor Lamont and his administration, we expect that they are going to move quickly to fix this misinterpretation. Should this issue not be resolved efficiently, then we will take the necessary steps in the legislature to ensure that our legislative intent is followed.”
Senate President Martin Looney, D-New Haven, sent a letter to DRS Wednesday asking them to have a conversation with the co-chairs of the Finance, Revenue, and Bonding Committee.
“As you know, budget negotiations are difficult, sometimes complicated, and sometimes even contentious. What is critical in these negotiations is the faith we place in our own nonpartisan staff, our partisan staff, and the staff of the governor and the Office of Policy and Management,” Looney said. “We think it is important that the committee better understand how this process broke down to the point that there may have been opinions not expressed at critical junctures in our deliberations.”
Looney said Wednesday in a phone interview that he’s confident that DRS will issue new guidance and eliminate any need for a special session.