Connecticut's 7.35 percent meals tax: what restaurants collect

Connecticut taxes restaurant meals at a higher rate than most other goods. If your business sells prepared food in the state, whether in a dining room, at a counter, from a truck or for delivery, you collect the meals rate and send it to the Department of Revenue Services (DRS). This guide explains the rate, how it came about and how to avoid the common mistakes. Check the DRS site for the current rate before you set up, because rates can change in any budget.

What is the rate?

The Connecticut General Assembly's Office of Legislative Research reports in a 2025 backgrounder that meals sold by restaurants and caterers are taxed at 7.35 percent, and that the rate was raised from 6.35 percent on October 1, 2019 (Public Act 19-117), a date the Department of Revenue Services confirms in its notice. There are no local sales taxes on top, so the rate is the same across the state. Bills that would change where meals tax revenue goes were discussed in 2026, so confirm on portal.ct.gov that 7.35 percent is still the rate before you rely on it.

Why does item classification matter?

The meals rate applies to prepared food that was already subject to sales tax, and the Office of Legislative Research notes it also covers meals sold by grocery stores and some beverages. If your business sells food at a deli counter, a bakery or a market, the classification of each item can affect the rate. Ask the Department of Revenue Services (DRS) in writing how to treat borderline items, such as a whole cake against a slice, and keep the answer on file.

Which sales are taxed at the meals rate?

In general, the meals rate applies to food and drink sold by restaurants and similar eating places for immediate consumption, including takeout. Bars and cafes selling prepared food and drink are in the same position. The rate also applies to catered meals and to prepared food delivered to customers. It applies to alcoholic drinks served in a restaurant as part of the sale. The treatment of mandatory service charges, delivery fees and gratuities should be confirmed, so ask DRS in writing; the usual rule is that a charge the customer must pay is part of the price and a voluntary tip is not.

How do you set up your register?

1. Register with DRS for a sales and use tax permit before you sell.
2. Set a meals tax category at the current rate, and apply it to food, drink, takeout, delivery and catering.
3. Set up a separate category, with the correct treatment, for any grocery items you sell.
4. Show the tax as its own line on receipts.
5. Run a sample order of each type and compare the result with a hand calculation.
6. Recheck your settings whenever the state changes the budget.

How do you file and pay?

Connecticut businesses file sales and use tax returns electronically through the DRS online system, with filing frequency assigned by DRS based on the amount of tax. Returns are due at set dates, and late filing triggers penalties. The tax you collect belongs to the state, so keep it in a separate account. If you are short of cash, call DRS before the due date, since they offer payment plans.

How do you stay current on rule changes?

DRS issues bulletins and notices that change how restaurants handle tax, from filing dates to special relief. Subscribe to DRS email updates. Doing so takes a few minutes and puts bulletins about rate changes, filing dates and relief programs in front of you. Share the updates with whoever sets your menu prices, since a change in tax can move the final cost to the guest, which affects how you display prices.

What about gift cards, deposits and delivery apps?

A gift card is generally not taxed when sold; the tax is due when it buys taxable food. A deposit for a private event is a liability until the event, and the final bill is taxed. If you sell through a third-party delivery marketplace, ask the platform how it handles collection of tax on your orders, and check your statements to confirm that the tax you owe is being remitted correctly. See our guides to gift cards and card surcharges, because 2026 guides to state surcharge rules list Connecticut as banning credit card surcharges (General Statutes section 42-133ff). Confirm with the Department of Consumer Protection before you add any card fee.

What should you keep on file?

Keep copies of your permit, your returns, your register tax settings, any DRS bulletins that affect you and any written replies you get from DRS. If you are audited, these documents show that you tried to comply. Review them each January. Build a short monthly routine: compare tax collected in your register with the tax on your sales report, check that the amount you remit matches the amount you collected, and note any variance. Small differences add up over a year, and a monthly check catches a wrong setting before it becomes a large correction. If you use a bookkeeper or an accountant, give them read access to the register reports so that nothing depends on one person's memory.

More guides for your business:

• Connecticut minimum wage and tipped wages for restaurants
• Connecticut certified food protection manager rules for restaurants
• Connecticut paid sick leave for restaurants: the 2026 and 2027 changes

More in the US guides for food businesses.