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HB 5407

AN ACT CONCERNING THE SALES AND USE TAXES IMPOSED ON MEALS SOLD BY AN EATING ESTABLISHMENT, CATERER OR GROCERY STORE.

2025 Regular Session Introduced by John Piscopo

Connecticut bill modifies sales tax treatment for prepared meals from restaurants, caterers, and grocery stores, affecting consumer costs and state revenue with unclear revenue and competitive impacts.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#cateringestablishments #grocerystores #restaurants #salesandusetax
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Bill Summary · HB 5407

Legislative bill overview

HB 5407 modifies Connecticut's sales and use tax treatment for meals sold by eating establishments, caterers, and grocery stores. The bill adjusts which food sales are subject to state sales tax and at what rates, potentially expanding or narrowing the tax base for prepared food purchases depending on specific provisions.

Why is this important

Food taxation significantly affects both consumer grocery costs and restaurant industry competitiveness. Changes to meal tax policy influence household food budgets, business operating costs, and state revenue—with particular impact on lower-income families who spend larger portions of income on food.

Potential points of contention

  • Revenue implications: Expanding tax exemptions on prepared foods reduces state tax revenue, requiring either tax increases elsewhere or budget cuts; conversely, expanding taxation could burden restaurants and consumers
  • Definitional complexity: Drawing clear distinctions between taxable "prepared meals" and tax-exempt groceries creates compliance challenges and potential disputes over product categorization
  • Equity concerns: Different tax rates on grocery stores versus restaurants may advantage one sector over another, and varying meal taxes can disproportionately affect lower-income households dependent on affordable prepared food options

Compiled from official sources — confirm details with the bill’s official record.

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