Plans are afoot to reduce the impact of the new sales tax surcharge on prepared foods, with Gov. Ned Lamont reaffirming his belief that the Department of Revenue Services has misinterpreted what the surcharge – due to go into effect Oct. 1 – is meant to include.
Lamont said his administration is working with Revenue Services to eliminate some of the items included in the tax. For now, those items include doughnuts, bagels, pizza slices, and pre-packaged bags of salad, as well as beer, wine, hot chocolate, and coffee and tea if already prepared for drinking.
The governor said the agency published its list of taxable items without first presenting it to his office. The tax adds a 1% surcharge to the base rate of 6.35%.
“The unilateral decision by the agency to expand the sales tax to additional food items is not consistent with the intent of the budget,” House Democrats said in a statement.
Senate Republican Leader Len Fasano, R-North Haven, repeated his call for a special session to rectify the situation.
“The only way to fix the Democrats’ grocery tax blunder is through a special legislative session,” Fasano said. “When a new governor comes in, a new legislature, a new DRS commissioner, there’s no way to guarantee any side agreements will be honored. How will grocery stores be protected in future tax audits if the legislation is unclear? Changing the law is the only way to ensure the tax policy is clear not only today, but for all future years to come.
“If Democrats no longer want to tax groceries, they need to acknowledge what their budget did and make the changes to fix it in a special session,” he continued. “I appreciate that (Office of Policy and Management Secretary Melissa) McCaw admitted the legislation could have been written with greater specificity. That is exactly why the legislature needs to return to specify what should and should not be taxed. Anything short of that is foolish and ridiculous.”