Lawmakers hope candy tax could be sweet charity for budget

May 25, 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 Legislators also repealed the sales tax exemption for bottled water.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.

By Dona Mokin

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.

Issaquah icon Boehm’s Candies could also feel a pinch from the increase. Owner Bernard Garbusjuk has spoken against the increase and touted the health benefits of chocolate.

Gowrylow said officials took steps to differentiate between candy and candylike items. The state used the definition of candy set by the Streamlined Sales Tax Governing Board. The board, a national organization based in Nashville, works to simplify sales tax and tax collection nationwide. Washington became a full member of the organization in July 2008.

“This is the best definition tax experts across the country could up with,” Gowrylow said. “Is it perfect? No.”

On the Web

Find a complete list of candies subject to — and exempt from — sales tax at the state Department of Revenue website.

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