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    Friday, May 10, 2024

    Doughnuts, cooked chicken, salads to be taxed at grocery stores come Oct. 1

    If you're reaching for a small container of pasta salad at the grocery store in a few weeks, it might cost you more.

    Single-serving sundaes, doughnuts and bagels sold in quantities of five or less, salads sold in containers of 8 ounces or less, pie or cake by the slice, meal replacement bars, rotisserie chicken and more will be taxed at 7.35 percent at grocery stores come Oct. 1, the Connecticut Department of Revenue Services indicated in a policy statement issued Friday.

    This stems from a provision in the state budget that meals "sold by an eating establishment, caterer or grocery store" will be taxed an additional percentage point, bringing the rate from 6.35 to 7.35 percent.

    DRS said in its policy statement the rate is "effective for all meals sold by grocery stores, which previously taxed meals in a different manner than other eating establishments."

    State Rep. Vincent Candelora, R-North Branford, said at a news conference Thursday that many people were surprised by DRS' interpretation of the meal tax.

    The policy statement lists taxable meals and drinks, and varieties of eating establishments, but says the changes are not limited to those listed, potentially creating confusion for grocery stores.

    Candelora argued that by adding grocery stores — rather than just eating establishments and caterers — to the budget language, Democrats are subjecting every item in a grocery store to scrutiny for taxation, to determine whether that item constitutes a meal.

    "What grocery store, in their right mind, is going to run the risk of breaking the law and be subject to penalties for not paying the appropriate tax?" he questioned.

    DRS spokesperson Jim Polites said in an email, "The recently updated DRS policy statement is designed to provide guidance to taxpayers. Existing sales tax laws are complex, and include a number of statutory exemptions. DRS encourages taxpayers to contact the agency with their specific questions, which often serve the added benefit of informing future guidance."

    Senate Minority Leader Len Fasano, R-North Haven, called the tax a "money grab," and he criticized DRS' inclusion of "all beverages provided with the sale of a taxable meal" as an example of a taxable meal.

    "If you were to walk out with this chicken and a soda today, you would not be taxed on either," Fasano said at the news conference, at which he had a rotisserie chicken and other foods. "After Oct. 1, because they're going to deem the soda as part of the chicken, you're going be taxed on the chicken and the soda."

    Pointing to the taxation of smaller amounts of pastries and salad greens, Fasano said the people who will be hurt most by the taxation are single moms, the elderly and those who are on budgets and buy in small quantities.

    He said he asked the Office of Fiscal Analysis to see if the numbers from DRS' definition line up with what was in the budget, and he expects to have that analysis Friday.

    Max Reiss, director of communications for Gov. Ned Lamont, responded by saying, "The Governor has consistently said that due to years of instability in the state's finances along with slow growth and volatility in our economy — we had to adopt solutions such as modernizing our sales tax and leveling the overall playing field. Why should the price of a bagel vary from Stop & Shop to your local neighborhood Dunkin?"

    He also said it's "apparently easier" for the state GOP to criticize than do the work of presenting their own budget, a sentiment shared by Sen. Cathy Osten, D-Sprague, who co-chairs the legislature's Appropriations Committee.

    Osten told The Day that DRS' inclusion of items such as single-serving sundaes, salad greens and doughnuts was not what Democrats intended with the budget.

    "This is not a grocery tax," she said. "This is 1 percent on prepared foods, and quite frankly, I think that the DRS memorandum is a little bit confusing."

    Osten said that DRS' reading is "not something that is written in stone" and she has asked her colleagues in Senate leadership to correct the interpretation.

    e.moser@theday.com

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