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Understand Sales Tax for Food & Beverage
Is food taxable in Connecticut?
byAugust 10, 2020
Every US state makes their own rules and laws around the taxability of certain products. Many states, Connecticut included, treat certain food, like groceries, a little differently than other items when it comes to how much sales tax a business should charge.
This post will explain grocery, meal and beverage taxability in Connecticut.
Are groceries taxable in Connecticut?
In Connecticut, grocery items are exempt from sales tax.
Are meals taxable in Connecticut?
Food in Connecticut is taxable when it meets this criteria: “food products that are furnished, prepared, or served in such a form and in such portions that they are ready for immediate consumption, and includes food products that are sold on a ‘take out’ or ‘to go’ basis and that are actually packaged or wrapped.”
As of October 1, 2019, sales of meals and certain beverages are subject to tax at both the standard 6.35% rate and an additional 1% tax, for a total effective tax rate of 7.35% for meals. This rate is also effective for all meals sold by grocery stores, which previously taxed meals in a different manner than other eating establishments.
Click here for more information on what is taxable in Connecticut.
Are beverages taxable in Connecticut?
The sale of all soft drinks, sodas, and all other beverages that are of a type ordinarily dispensed at bars and soda fountains, are subject to sales and use taxes at the rate of 6.35% for sales occurring on and before September 30, 2019, and at an effective rate of 7.35% for sales occurring on and after October 1, 2019.
For a comprehensive list of beverages that are taxable in the state of Connecticut, click here.
How to Always Collect the Correct Amount of Sales Tax in Connecticut
Do you sell groceries, meals or beverages? Are you required to collect sales tax in Connecticut? Then this may sound like a huge headache.
That’s where TaxJar can help.
With the TaxJar API, you can be sure you’re collecting the right amount of sales tax on every transaction. Our product tax codes ensure you do collect sales tax on that soft drink but don’t collect sales tax on that plain coffee drink.
Not to mention, most eCommerce businesses have nexus in multiple states. For example, groceries are taxable in some states, but non-taxable in others. Or, like Alabama, where food purchased in a vending machine is taxed at a different rate than other food items. With TaxJar, you’ll collect the right amount of sales tax from every customer, in every state, every time.
Further food and meal taxability resources:
- Sales Tax by State: Are grocery items taxable?
- Sales Tax by State: To-Go Restaurant Orders
- Is the food I sell on my food truck taxable?
- Connecticut Sales Tax Guide for Businesses
Ready to automate sales tax collection, reporting and filing? Click here for more on how TaxJar can take the headache out of sales tax in your food & beverage business.