The Homa Files

Punch line: States want to cut deficits by taxing candy. That’s not as easy as it sounds …

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Excerpted from WSJ: Candy Taxes Struggle to Define Candy, May 17, 2010

Many states don’t tax food – which  considered is essential.  Taxing food might push the poor toward malnourishment or unhealthy eating.

The food exemption has traditionally extended to candy and soda.

As they struggle with budget deficits, states from New York to Washington are looking to candy and soda taxes to help bridge the gap. .

More than a dozen states have passed or proposed some sort of candy or soda tax in the 2010 legislative session, and most of them are bound to face some sort of confusion.

The hard part: defining candy.

The distinction between candy and food can be hard to pin down.

• In Washington, a new candy tax will apply to Butterfinger candy bars, yet Kit-Kat wafers remain excise free (this because the law exempts foods with flour in them).
• in Colorado, Kit-Kats go untaxed, but Twix bars face levies.
• In Illinois, retailers in Chicago are unsure if Twix Bars — some of which contain flour and peanut butter — are food or candy.

Bottom line: one man’s food is another man’s candy …

Full article:
http://blogs.wsj.com/economics/2010/05/17/candy-taxes-struggle-to-define-candy/

This entry was posted on May 21, 2010 at 6:57 am and is filed under Food & Drink, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.