On October 1, shoppers will be paying a 7.35% tax on some groceries, but not others. In the latest budget, the tax exemption for groceries was quietly altered. When some Democrats proposed raising the tax by one percent on meals at restaurants, they justified the increase as a luxury tax.
Eating out is a choice, and if people can afford to go to a restaurant, they should not feel the impact of a one percent tax on meals. When the language was drafted, however, they included “grocery stores” as one of the entities that sell meals subject to additional taxation. Meals unfortunately is defined as all “food products which are furnished . . . in a form and in such portions that they are ready for immediate consumption.” Every food product, therefore, in a grocery store is now subject to tax scrutiny.
So what foods at a grocery store are in a form that is immediately consumable? The Department of Revenue Service has issued a non-binding, advisory opinion which lists some examples, such as five or less muffins, doughnuts and bagels, salads in packaging 8 ounces or less, cans of soup, nutrition bars, cooked rack of ribs or rotisserie chickens, sandwiches, and Popsicles. Because this opinion is advisory only, grocery stores are left to determine what items will be subject to tax. With a possible tax audit over their shoulder, grocery stores are going to err on the side of caution and put a 7.35% sales tax on any items that might fall under this definition.
…five or less muffins, doughnuts and bagels, salads in packaging 8 ounces or less, cans of soup, nutrition bars, cooked rack of ribs or rotisserie chickens, sandwiches, and Popsicles.
To add more confusion, if a shopper purchases any of these items along with sodas, bottled water or other beverages, those beverage items will now become taxable at 7.35% whereas if purchased alone, they’d be subject to no taxation. Why? Because the new law taxes all “meals” sold by a “grocery store” “and spirituous, . . . soft drinks, sodas or beverages . . . in connection therewith.” So now the new taxation may impact other items in your cart because of something else in your cart.
Because this 7.35% tax on groceries targets small portioned food items, I am concerned for what this means for the people and families of Connecticut. What will be the impact on our senior citizens, empty-nesters and young men and women living alone? Over the last decade, Connecticut’s tax policy has crept into every moment of our daily lives and driven long-time residents to move out of state. I share the public’s frustration with these regressive taxes and the government’s continued need for more of your hard- earned tax dollars. Please call your legislators and tell them exactly how these taxes will impact the lives of you and your family.
Themis Klarides is Republican Leader of the Connecticut House.