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Candy tax due in Washington next month

By Caroline Scott-Thomas , 12-May-2010

A sales tax on certain candy and gum products is due to come into effect in Washington State on June 1, as part of the state’s effort to plug its $2.8bn deficit.

According to a definition posted on the state’s department of revenue website: “Candy is a preparation of sugar, honey, or other natural or artificial sweeteners combined with chocolate, fruits, nuts, or other ingredients or flavorings and formed into bars, drops, or pieces. Candy does not require refrigeration. Candy does not include any preparation containing flour.”

But this last part is expected to cause some controversy. It means that Reese’s Peanut Butter Cups and Three Musketeers, for example, are subject to the tax, while Kit Kat and Milky Way bars are exempt.

The department said: “Any product that lists flour as an ingredient on the nutritional facts label is not taxable as candy…Flour is made from grain, such as wheat, rice, corn, rye, oats, and barley.”

The revenue department has posted a list of about 3,000 products that will be subject to the tax on its website, but has said that others could be added.

Other taxes to come into effect in Washington on June 1 include a sales tax on bottled water and beer. A soda tax is due to take effect on July 1.

Washington State is not alone in its plan to tax candy in an effort to reduce the gap between spending and income. Illinois consumers started paying higher taxes on candy that does not contain flour, as well as some soft drinks, in September under new rules from the Illinois department of revenue; and the Colorado State Senate passed a bill in February to remove a tax exemption on candy and soda.

Further information on Washington State’s candy tax, including the list of products affected, can be found here .

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