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February 3, 2025

CT Restaurant Assoc. proposes using meals/beverage tax revenue to support hospitality industry

HBJ PHOTO | DAVID KRECHEVSKY The State Capitol in Hartford.

The Connecticut Restaurant Association said Monday it is supporting legislation to reinvest a portion of the state’s 1% meals and beverage tax into municipalities and workforce development for the state tourism and hospitality industries.

The association will hold a news conference at 1:30 p.m. at Zohara Mediterranean Kitchen in West Hartford Center to announce the plan and will be joined by members of the hospitality industry, West Hartford Mayor Shari Cantor and other local municipal leaders.

The association said that in 2019, the state’s meals and beverage tax was increased from 6.35% to 7.35%, with the additional revenue from the 1% increase being placed into 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,” the association said.

The state ended the 2023-24 fiscal year with a more than $400 million surplus in the General Fund, the sixth consecutive year the state has reported a budget surplus.

“In light of this success,” the association said, “Connecticut is now in a position to make a modest, responsible change to the meals and beverage tax.”

That change it proposes would be to use the additional revenue from the 1% tax to create a Connecticut Hospitality Fund and reinvest the revenue. 

Connecticut’s hotel and hospitality industry was one of the sectors hit hardest by the pandemic, but is slowly returning to pre-COVID levels, industry experts say.

The association said the proposed hospitality fund would be used to:

  • Invest in municipalities to support the local hospitality industry and find ways to build through grants, economic development, target marketing and more.
  • Fund the Connecticut Tourism Office at a level competitive with other states. The association said that every $1 invested in tourism generates at least $7 in return.
  • Rebuild the hospitality sector’s workforce through training. 

The association said it would divide the revenue from the 1% meals and beverage tax in the following way: 50% for funding to support the local hospitality industry; 30% for the Connecticut Tourism annual fund; and 20% for hospitality industry workforce development.
 

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