By Keith M. Phaneuf and Mark Pazniokas

Gov. Ned Lamont’s administration late today unveiled tax guidelines that narrowed the Department of Revenue Service’s original interpretation of a budget provision that adds one percentage point to the 6.35% sales tax on meals and prepared foods on Oct 1.

In a memo aimed at grocery stores, DRS essentially advises them to apply the new 7.35% sales tax rate on prepared foods only to items already subjected to the sales tax, as legislators have said was their intent.

“The DRS initially interpreted the 2019 legislation to add certain circumstances where the tax would be applied,” Scott Jackson, the commissioner of revenue services, wrote to Lamont.

“However, when the entire statute is read as a whole, it becomes clearer that the General Assembly did not expand the applicability of the tax, but simply increased the existing tax.”

By Keith M. Phaneuf

Senate Democrats today backed away from the new sales tax surcharge on prepared foods, saying Gov. Ned Lamont’s administration made it far broader in scope than lawmakers intended.

The announcement comes on the heels of objections raised last week by House and Senate Republicans, as well as new cost projections from nonpartisan staff that showed consumers will pay $44 million more than originally projected over the next two years.

[In a tweet tonight Lamont said: “I want to ensure that the budget that was approved by lawmakers is enacted in the spirit in which it was passed. With that in mind I’ve directed the OPM Secretary & DRS Commissioner to review the @CTDRS guidance & interpretation of the prepared foods law and do so in short order.]

“We were shocked to see the DRS has somehow interpreted the language in the budget to significantly broaden the base on what meals and beverages could be covered by the sales tax,” Senate President Pro Tem Martin M. Looney, D-New Haven, and Senate Majority Leader Bob Duff, D-Norwalk, wrote in a letter to Department of Revenue Services Commissioner Scott Jackson.

By Keith M. Phaneuf

A controversial tax hike on prepared foods will hit Connecticut shoppers much harder than legislators thought, raking in $158 million over this fiscal year and next — nearly 40% more than lawmakers anticipated.

That’s according to a new revenue forecast today from nonpartisan analysts that also shows the tax hike will collect more than $90 million annually from consumers by the 2020-21 fiscal year.

Minority Republicans in the Senate and House asked the Office of Fiscal Analysis on Thursday to revise revenue projections after the Department of Revenue Services (DRS) released guidelines showing the tax would hit a much broader range of products than many lawmakers anticipated.

“I think this is egregious behavior by the Democrats,” said Senate Minority Leader Len Fasano, R-North Haven, referring to the sales tax surcharge on prepared foods enacted last June by the legislature’s Democratic majority and signed by Gov. Ned Lamont, also a Democrat. “For the elderly, for the single mom, for the people struggling every day, this is going to tax them to death.”