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Connecticut Vendors Report Progress Toward Maintaining Exemption As New Gov's Budget Plan Looms

Posted On: 2/3/2011

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Connecticut Vending Association, CVA, Connecticut vending machine tax exemption, vending machine, vending machine operator, vending product tax, Gov. Dannel P. Malloy, vending machine foods, Gov. Dannel P. Malloy, Mark Lathrop, Lathrop Vending, Uncasville CT, Eric Mueller, United Snack Group, Cheshire CT, Sen. Eileen Daily (D-Westbrook), Rep. Patricia Widlitz (D-Guilford)

HARTFORD, CT -- The vending machine business is one of many industries in Connecticut striving to maintain its current sales tax exemption as legislators look to balance the state budget.

The Connecticut Vending Association said it met with state lawmakers to emphasize the industry's sizable contribution to the economy and the hardship higher taxes would impose. The association reported that the response has been encouraging.

The exemption for vending machine food purchases is among more than 200 tax breaks that total an estimated $5.3 billion a year. With the state deficit for the upcoming fiscal year estimated at $3.6 billion, the budget shortfall for the following year tops $3 billion. This has reportedly prompted Gov. Dannel P. Malloy and his budget team to look closely at tax breaks as they ready a budget for the Legislature's consideration.

The governor said he will propose a combination of spending cuts and new taxes to balance the two-year budget. The governor outlined during his election campaign last year, and recently reiterated, that before considering tax increases, he will first look to repeal tax breaks and incentives. The resulting revenues, he emphasized, would reduce the need to raise money from other sources, such as income, sales and corporate taxes.

The governor is due to present his two-year budget plan to the legislature on Feb. 16.

The Nutmeg State exempted from sales and use taxes certain food products, and foods assembled as meals, sold through coin-operated vending machines on July 1, 1997. Off the hook are sandwiches, canned foods, salty snacks, granola and cereal bars, bakery goods, dairy items and fruit (canned, dried or individual pieces), along with coffee, tea, cocoa, fruit juices, and mineral water and other noncarbonated, nonalcoholic drinks. Nonprescription medicines are also exempt.

Not exempt are candy and confectionery goods, including chocolate and chewing gum; candy-coated items like nuts, raisins, popcorn, cereal bars and granola bars; soda and other carbonated beverages; cigarette and tobacco products; and items not intended for human consumption. Additionally, effective July 1, 2000, all vended items 50¢ or less are exempt from sales tax.

Visit Connecticut's Department of Revenue Serviceto learn more.

On Jan. 31, CVA president Mark Lathrop, Lathrop Vending (Uncasville), and legislative director Eric Mueller, United Snack Group (Cheshire), met with state Finance Committee chairs Sen. Eileen Daily (D-Westbrook) and Rep. Patricia Widlitz (D-Guilford) to inform them of the industry's substantial contributions, including employment. CVA estimates that Connecticut's vending industry employs 3,650 people, with a payroll of $14 million, and generates $67 million in annual sales. "We emphasized that the exemption clearly works, based on the ratio of payroll to gross sales," Mueller told VT.

In addition to urging lawmakers to maintain the existing sales and use tax exemption enacted in 1997, Lathrop and Mueller asked that they consider matching the Massachusetts exemption of all vended product sold for $3.50 and under, which would adjust Connecticut's current 50¢ exemption for inflation.

"Sen. Daily and Rep. Widlitz were extremely attentive and eager to learn about our industry," reported Mueller. "Both of the Finance Committee chairs were genuinely concerned about our small businesses and the jobs that we provide. Overall, we are extremely excited, and don't think this meeting could have gone any better. Nobody has a crystal ball, but we gave it our best."