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State Senator

Christine Cohen

Representing Branford, Durham, Guilford, Killingworth, Madison & North Branford

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Sen. Cohen Releases Statement Calling for Department of Revenue Services to Change Interpretation of Sales Tax Application to Meals

HARTFORD, CT – Today, state Senator Christine Cohen (D-Guilford) expressed disapproval of the Department of Revenue Services’ (DRS) Policy Statement issued on September, 6, 2019. Sen. Cohen joined her colleagues in the Senate Democratic Caucus, signing onto a letter to DRS Commissioner Scott D. Jackson requesting the DRS revise the Policy Statement. The letter is below.

The department’s interpretation of the budget broadens the base on meals and beverages covered by the sales tax, which is not the legislative intent of the budget and goes against the interpretation of all three nonpartisan offices. This interpretation would lead to a different fiscal note from the Office of Fiscal Analysis. DRS did not provide any feedback when the budget was heard in committee, nor did they when the language was included in the tax package that was voted out of the Finance Committee. Sen. Cohen noted her reservations with this portion of the budget upon the proposal’s release in June.

“The Department of Revenue Services’ interpretation of the budget is far outside the scope of intention and acceptability,” said Sen. Cohen. “When I voted for this budget, I did so knowing that portions of it were necessary and would create positive forward moment for our state. While as a small business owner in the food business, I thought that an additional tax on prepared food would be overly burdensome to businesses and residents, I recognized the compromise required in passing a budget. There were many items within the document that warranted its passage. However, the department’s Policy Statement is not reflective of the original purpose, regardless of my agreement of the content. I know how cumbersome another tax would be and am aware of the impact this will have on working families across the state. For these reasons, I am emphatically against this additional taxation and I am asking that the DRS review the original intent and revise their Policy Statement. Should that not occur, I will work with like-minded colleagues and constituents to seek a repeal of the provision.”

September 16, 2019

Commissioner Scott D. Jackson
Department of Revenue Services
450 Columbus Boulevard
Hartford CT 06103

Dear Commissioner Jackson:

We are writing in reference to the recent Department of Revenue Services Policy Statement (PS 2019(5)) that was issued on September 6, 2019.

We were shocked to see that DRS has somehow interpreted the language in the budget (PA. 19-117) to significantly broaden the base on what meals and beverages would be covered by the sales tax. This interpretation goes against the legislative intent of the new law and against the interpretation of the new law by all three of our nonpartisan offices.

As you may be aware, this language was incorporated in Raised Bill 7408 that was heard by the Finance, Revenue and Bonding Committee on April 10, 2019. Unfortunately, as has become commonplace, DRS did not testify on this bill, so if DRS did think this language would drastically increase the base of taxable items, that opinion was not shared with the General Assembly.

Subsequently, when this language was included in the tax package that was voted out of the Finance Committee (SB 877), again we were not given any DRS input on this interpretation.

Furthermore, during our extensive budget negotiations, and discussions of the fiscal implications of this language in the final budget, never did DRS or the Office of Policy and Management indicate that their interpretation of this language was any different than that of our Office of Fiscal Analysis or Office of Legislative Research.

This unexpected interpretation from DRS would lead to a drastically different fiscal note from OFA and a significant change to our budget assumptions currently adopted, something that was never intended by the General Assembly or the administration.

We are asking that DRS, in consultation with OPM, revise this Policy Statement to more accurately reflect the legislative intent that was clear to all parties during our budget negotiations.

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