I want to clarify a few things about the grocery tax that has been in the news lately.

When we passed the state budget in June, there were indeed a few tax increases—small and incremental—that were needed in order to save money elsewhere and improve middle class families’ lives in other aspects. For example, we eliminated the income tax on seniors’ Social Security here in Connecticut, and we eliminated the business entity tax as a way to spur economic growth. These changes (and others) were made possible, in part, because of the small taxes applied to a limited number of certain items in grocery stores.

However, as you may have heard, the Department of Revenue Services (DRS), which handles tax collection, unilaterally expanded the one percent increase on certain grocery items without the legislature’s approval. The new tax was applied to many items my colleagues and I had no intention of taxing when we voted on the budget.

Once the DRS overreach was brought to our attention, however, our Democratic leadership asked for the expansion to be redacted. Thanks to our pressure, DRS rescinded the policy overreach that would have led to more items being taxed than we originally intended. Only items currently taxed as a ready-to-go meal at 6.35 percent, will be taxed with an additional one percent.

One reason I was OK with this budget item is that I believe that by adding a very small tax (one percent) to ready-to-eat items meant for consumption outside the store (not produce, meat, bread, milk, or other staples) we would help level the playing field for small businesses. For example, if you already pay a tax on a grinder you buy at a local restaurant, but not on one you buy in the grocery store, that exemption is detrimental to the restaurant. So adding a small one percent tax to certain items in grocery stores is the fair thing to do.

In truth, all budgets involve a lot of compromise. There is always a push-and-pull between intent and consequence. While increasing the grocery tax by one percent on certain items was not my ideal policy, it was far better than some of the other budget alternatives we were faced with, such as cutting funding to critical programs in education or eliminating programs that support our seniors.

Please feel free to contact me by email at Christine.Palm@cga.ct.gov or by phone at 800-842-8267 with any questions or concerns.