Lawmakers hope candy tax could be sweet charity for budget
June 2, 2010
By Warren Kagarise
The latest measure to close a $2.8 billion state budget gap could hit consumers in the sweet tooth.
Consumers will pay sales tax for candy, gum and soda starting June 1. Lawmakers imposed a 2-cents-per-12-ounces tax on carbonated beverages last month. Legislators also repealed the sales tax exemption for bottled water.
But the impending candy tax — with more exemptions than a Whitman’s Sampler has chocolates — has attracted the most attention.
The state does not levy sales tax on food. Lawmakers decided to no longer consider candy as a food. Instead the state will consider candy as, well, candy. Not all candy, however.
Products made with flour derived from grain will not be considered candy. The exempt items include both the chocolatey — Twix and other cookie-based bars — and the gummy — Twizzlers and other licorice.
Confused? The state Department of Revenue has posted a list of more than 3,000 sweets online to help consumers tell the difference between taxable and exempt indulgences.
Candy manufacturers may receive a business-and-occupation tax credit of $1,000 for each employee position maintained for a year. Department of Revenue spokesman Mike Gowrylow jokingly referred to the credit as “the sweetener” for unhappy confectioners.
Snoqualmie Falls Candy Factory could feel a pinch from the increase. Co-owner Sharon Sorstokke said the factory would not be taxed on the wholesale items it sells to other businesses to prevent the candy from being taxed twice, but the factory will have to charge a tax on the candy it sells at street and county fairs.
“I’m not real thrilled about it,” Sorstokke said. “It is somewhat of a hassle to collect the tax. It does take business owners time and expense to collect the tax.”
Once the candy tax begins, “Kit Kat bars are suddenly going to become very popular,” Sorstokke predicted.
Suzy Cassidy, who operates Chocolate 2 Die 4 out of her North Bend home, said the tax was more of a headache than anything. If one of her gift baskets contains a candy item, she’ll have to tax the whole thing, even if the other items don’t qualify as candy, she said.
“It just makes the accounting harder,” Cassidy said. “I don’t think it will hurt sales.”
Warren Kagarise: 392-6434, ext. 234, or email@example.com. Laura Geggel: 392-6434, ext. 221, or firstname.lastname@example.org. Comment at www.snovalleystar.com.
- Find a complete list of candies subject to — and exempt from — sales tax at the state Department of Revenue website, www.dor.wa.gov.