NEW HAVEN, Conn. (WTNH) — Restaurant owners across the state are lining up to oppose a state budget plan that would create a new “Dining Tax.” As News 8 first reported last week, Democratic leaders in the House are pushing the plan as part of the budget stalemate solution.
Even at lunchtime in the middle of July, there’s a very active restaurant scene in New Haven. However, restaurant operators across the state are watching the state budget stalemate in Hartford very closely because of a potential financial and confusing impact on their customers.
Speaker of the House Joe Aresimowicz of Berlin and House Majority leader Matt Ritter of Hartford are actively pushing for a boost in the state sales tax to 6.99%, plus a local option dining tax that could increase the sales tax to 7.99% in some communities for food and beverages served at restaurants and bars. The extra penny would be to raise cash for financially strapped cities.
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New Haven Mayor Toni Harp, who points out that over fifty percent of the real estate in the Elm City is property tax exempt, likes the idea. “Yes, I would love to see there be an increase in the overall sales tax for food, for beverages and to have it redistributed to our cities,” she stated.
Matt Bailey is a partner in two New Haven restaurants; Olives and Oil and Elm City Social. He says he and other restaurant operators are opposing this to watch out for their customers. “We want to make sure if they want to go out to eat that they’re not faced with another tax on top of the sales tax,” Bailey stated.
Because the proposal would allow the cities to set the additional sales tax rate, it could be different from one community to the next.
Adds Bailey, “There’s going to be customer confusion no doubt. With chain restaurants, a customer could go to one location in one town and possibly pay a different total on their bill than they would pay in another town because of the tax being different town by town.”
Bailey also says that could have a big impact on the event and party business as well. Restaurant owners say they are sympathetic to the plight of city leaders but are hoping to halt this idea before it ever gets to your check.
Rep. Aresimowicz says the proposed dining tax would apply to all bars and restaurants including fast food.