Reinvesting the CT Meals & Beverage Tax Back Into Local Communities

The 2025 Connecticut Legislative Session is well underway, and the Connecticut Restaurant Association is actively monitoring hundreds of bills that could impact the restaurant and hospitality industry.

One key proposal, Senate Bill 739, seeks to change the distribution of sales and use tax revenue from meals sold by restaurants, caterers, and grocery stores. The Connecticut Restaurant Association, local municipal leaders, and state legislators have called for the creation of a new ‘Connecticut Hospitality Fund’ aimed at supporting tourism, workforce development, and local economic development. The proposed program would be funded by utilizing Connecticut’s existing 1% tax on meals and beverages, which generates more than $100 million annually.

In 2019, Connecticut’s meals and beverage tax was increased from 6.35% to 7.35%, with all revenue directed to the State’s General Fund. However, over the last three years, the Governor and legislature have built a budget surplus, and put the state on more stable financial footing. In light of this success, Connecticut is now in a position to make a modest, responsible change to the meals and beverage tax – a change that would pay dividends for the state’s hospitality industry and bolster local, municipal economies in every corner of Connecticut.

The Connecticut Hospitality Fund will:

· Invest in our local Municipalities to support their local hospitality sector, and find ways to build through grants, economic development, target marketing and more.

· Fund the CT Tourism Office at a competitive level to our peer states. Studies have found that every $1 invested into CT Tourism has a return of at least $7.

· Rebuild our sector’s workforce through hospitality specific training. These programs provide the tools and resources needed to attract, promote and maintain our future industry leaders.

Scott Dolch, Presidents & CEO of the Connecticut Restaurant Association said: “Reinvesting the meals and beverage tax back into the hospitality sector through the creation of this new fund will have a significant, positive impact on small businesses, job growth, and the generation of additional tax revenue. Most importantly, it will do it on an ongoing basis, continuing to create economic activity and state revenue into future years.”

State Senator, Derek Slap, said: “Fundamentally, this bill for me is about fairness, basic fairness. The restaurants and the customers who generate the revenue in a particular place, a particular town, they should be able to keep some of that in the community. This is a bill that’s a win-win on so many fronts.”

The proposed Connecticut Hospitality Fund would disperse revenues generated by the meals and beverage tax in the following ways:

· 50% (approximately $45 million annually) would be distributed to Connecticut municipalities based on revenue that each city or town generates through the meals tax. Municipalities would use these dollars to support their local hospitality sector and find ways to build through grants, economic development, target marketing and more.

· 30% (approximately $25 million annually) would be sent to the CT Office of Tourism, allowing our Tourism Office to compete on a regional and national level to attract more visitors to Connecticut.

· 20% (approximately $18 million annually) would be used for workforce development in the hospitality industry, with the goal of providing resources to rebuild the sector’s workforce through hospitality specific training to attract, promote and retain our future industry leaders.

According to the National Restaurant Association’s State of the Industry Report 2025, consumers plan to continue spending in their local restaurants, pushing industry sales nationwide to a projected $1.5T, while restaurant operators will continue to fuel economic growth in their communities by adding a projected 200K jobs, bringing total industry employment to 15.9M. The passage of Senate Bill 739 would ensure that Connecticut’s hospitality industry remains a vital driver of economic growth and community development, supporting restaurants and food service businesses to thrive.

This article was originally published in the March edition of Beverage Journal. Read from the source by clicking here!