Connecticut Meals Tax and Room Occupancy Tax for Restaurants, Hotels and Rental Hosts
Connecticut Meals Tax and Room Occupancy Tax for Restaurants, Hotels and Rental Hosts
If you sell meals, rent rooms or host overnight guests in Connecticut, two state taxes may apply to you: the sales tax on meals and certain beverages, and the room occupancy tax on overnight stays. The Connecticut Department of Revenue Services (DRS) administers both. Restaurant owners usually deal only with the first tax. Hotel and inn operators deal with the second. Many people who rent a spare room or a whole home through a booking platform never realize the room tax applies to them. This guide covers the rates, who collects what, how registration works, and the mistakes operators make most often.
This guide is informational content, not legal or tax advice. It explains general rules as of 2026. Tax rules and town ordinances change, and your situation may differ. For complex operations, such as several properties, a restaurant inside a lodging business, or an arrangement with a booking platform, talk with a certified public accountant (CPA) or a Connecticut tax attorney before you file.
The Two Taxes at a Glance
| Tax | Applies to | Rate | Who collects and remits |
|---|---|---|---|
| Sales tax on meals and certain beverages | Restaurant, cafe, food service and similar sellers | 7.35% | The seller |
| Room occupancy tax | Hotels, motels, lodging houses and short-term home rentals | 15% | The operator |
| Room occupancy tax | Bed and breakfasts | 11% | The operator |
Connecticut has no local sales tax, so the 7.35% meals rate is the same in every town. Room occupancy tax is also a state tax. Confirm current rates on the DRS pages listed at the end of this guide before you set prices or build your billing system.
Sales Tax on Restaurant Meals and Beverages
Connecticut's sales tax on meals and certain beverages is 7.35%. If you sell prepared food or qualifying beverages to customers, you need a Sales and Use Tax Permit from DRS before you start selling. The permit carries a $100 registration fee, and you must display it at each location where you sell.
Restaurant owners tend to run into four issues:
- Collecting is your job. You charge the 7.35% to the customer and remit it to DRS. The tax is not a cost you absorb unless you choose to, and it must be reported accurately on your returns.
- Separately stated charges can still be taxable. A separate line on the check does not automatically make an amount exempt. Ask DRS before you assume that a listed charge falls outside the sales tax base.
- A permit is not a license. Connecticut has no general state business license. The sales permit is a tax registration. Your right to operate depends on your trade and on local approvals.
- Confirm your filing schedule when you register. DRS sets the reporting and payment requirements for your account, so check them on the sales tax pages instead of relying on what a friend or a previous business did.
Local approvals may also apply. Restaurants commonly need zoning sign-off from the town and approval from the local health department or health district. Connecticut has no county government, so the local health authority is a town-level department or a multi-town district, not a county office. The Business.CT.gov New Business Checklist and the eLicense system are good starting points for finding the agencies that apply to your trade.
Room Occupancy Tax for Hotels, Inns and Lodging
Room occupancy tax is 15% on hotels, motels, lodging houses and short-term home rentals. Bed and breakfasts pay 11%. Operators collect the tax from guests and remit it to DRS.
The tax applies to the first 30 consecutive days of occupancy. It does not apply from the 31st day onward. A guest who stays 40 nights is taxed on the first 30 nights only. Keep a dated record of each guest's arrival, departure, nightly rate and tax collected, so you can show when each 30-day count started and stopped. Operators who lose track of the count tend to either undercharge or overcharge long-stay guests, and both errors create cleanup work later.
Registration runs through myconneCT, the state's online tax registration system. The $100 registration fee covers sales tax and room tax together, so you do not pay a separate registration fee for each tax. If your property also serves meals, such as an inn with a dining room, you are dealing with both taxes and should track them separately in your books, even though one registration covers both.
Short-Term Rental Hosts
A short-term home rental, whether a single room or an entire home rented to guests for a short stay, falls under the 15% room occupancy rate. Whether you personally owe the tax depends on how the booking reached you.
Bookings through a platform
Under CGS 12-407, short-term rental facilitators and marketplace facilitators are treated as retailers. In practice, a platform that facilitates the booking and collects payment generally handles collection and remittance of the room tax on those bookings. Read the platform's tax settings and help pages to confirm which taxes it collects for your listing and which it leaves to you.
Direct bookings
If a guest books directly with you, whether through your own website, a phone call, an email or a personal referral, the platform is not collecting the tax. You need your own DRS registration and must collect and remit the room tax yourself. DRS Special Notice 2019(9) addresses how this applies, so read it before you take your first direct booking.
Many hosts list on a platform and also take direct bookings from repeat guests. If you do both, keep a record that shows which bookings came through which channel. Without that record, you cannot prove what the platform handled and what you were responsible for.
Town rules come on top of state tax
There is no local sales tax in Connecticut, but that does not mean towns stay out of short-term rentals. Towns set their own short-term rental ordinances, and those rules differ from one town to the next. They can cover zoning, registration requirements and permitted uses. Before you list a property, check with the town hall or the planning and zoning office, because a state tax registration does not authorize a use that the town restricts.
Common Mistakes to Avoid
- Assuming a platform handles everything. Platform collection covers the bookings that run through the platform. Your direct bookings remain your responsibility.
- Treating the tax registration as a business license. The DRS registration lets you collect tax. It does not approve your building, your food service or your use of the property.
- Losing track of the 30-day count. Long-stay guests are taxed for the first 30 consecutive days only. Keep dated records so the count is provable.
- Skipping the permit display. The Sales and Use Tax Permit must be displayed at each location where you sell.
- Skipping the town check. State registration and town approval are separate. Both are required where local rules apply.
Steps to Get Started
- Define what you sell. Meals and beverages, overnight rooms, or both. Each activity can trigger a different tax.
- Register with DRS through myconneCT. The $100 registration fee covers sales tax and room tax together.
- Display your Sales and Use Tax Permit at each location.
- Set up collection. Charge 7.35% on taxable meals and beverages. Charge 15% on hotel, motel, lodging house and short-term home rental stays, or 11% for bed and breakfast stays, for the first 30 consecutive days only.
- Confirm local approvals. Check zoning with the town and food service approval with the local health department or health district. Use the Business.CT.gov New Business Checklist to identify other agencies that apply to your trade.
- Clarify platform responsibilities. Read the platform's tax settings and confirm which bookings it collects on.
- Keep records. Save dated guest and sales records, filing confirmations and your DRS account details in one place.
Items to Confirm With DRS or Your Town
Some details depend on your exact setup, and this guide does not settle them. Confirm the following directly with the agency before you rely on an answer:
- Your sales tax reporting and payment schedule, which DRS assigns when you register.
- How any separately stated charges on your bills are treated for sales tax.
- How the room tax applies if you run both a lodging operation and a food service operation.
- Whether your town's short-term rental ordinance permits your property and requires any additional registration.
Official Resources
- Connecticut Department of Revenue Services: https://portal.ct.gov/drs
- DRS sales tax information, including the Sales and Use Tax Permit: https://portal.ct.gov/drs/sales-tax/tax-information
- Business.CT.gov, for the New Business Checklist and eLicense system
When to Talk to a Professional
A straightforward restaurant or a single rental property can often be set up with the DRS guidance above. Get professional help sooner if you operate several properties, mix food service with lodging, use more than one booking platform, have a long-stay tenant population, or have received a notice from DRS or your town. A CPA can advise on your filing and bookkeeping, and a Connecticut attorney can advise on how local ordinances and contracts apply to your operation.
Reminder: This guide is informational content, not legal or tax advice. Confirm current rates, deadlines and requirements with the Connecticut Department of Revenue Services and your town before you act on them.