HARTFORD, CT — Following public pressure and a campaign for a special session from Republican lawmakers the Department of Revenue Services rescinded its previous guidance on the meals tax Thursday.
Earlier this week, Gov. Ned Lamont asked DRS to review its guidance on the meals tax. The interpretation based on language in the state budget expanded the scope of items that could be taxed in a grocery store.
Lamont and Democratic lawmakers said expanding it to items in the grocery store that previously weren’t taxed was not what they intended. They simply sought to increase the sales tax rate by 1% on grocery store items that were already taxed, such as catered services or food served in an area where it could be consumed on-site.
“The DRS has determined that there is an alternative, and defensible, interpretation that more closely aligns with the language of the stature and the clear intent of the Legislature,” DRS Commissioner Scott Jackson wrote in a letter to Gov. Ned Lamont.
Republicans lawmakers were the first to point out how the guidance expanded what has been taxed under guidance issued in 2002. The public swiftly condemned the expansion of the tax and Democratic lawmakers joined Lamont in asking DRS to review its guidance.
“The original guidance created by DRS was too broadly interpreted and not reflective of what was intended when the budget was passed,” 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.”
Republican Senate Leader Len Fasano said he appreciates the revised guidance but doesn’t believe it’s anything more than a “temporary pause.”
“The grocery tax passed by Democrats remains law and can still be imposed on taxpayers by future governors or legislatures until the statute is changed, which can only be done by the legislature when in session,” Fasano said. “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. 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.”
House Minority Leader Themis Klarides, R-Derby, maintained they need to have a special session to address the issue.
“The Democrats passed this law in June to tax groceries – it is in their budget that was signed by the governor. Now, 10 days before these tax increases on food and groceries are about to hit consumers and taxpayers at the cash register, the Democrats are stuck,” Klarides said. “They want to ignore state statutes that they voted for in the dark of the night and now think they can undo them by bureaucratic fiat when voters and taxpayers are not paying attention.’‘
Republicans in the House dropped off 54 petitions calling for a special session and their colleagues in the Senate dropped off 14. But that’s not enough for a special session.
In order for that to happen Democratic lawmakers would have had to agree to a special session to revise language they adopted as part of the state budget. They didn’t.