Washington State repeals candy tax

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Peanut butter cups, Tax

Washington State voters have elected to repeal a tax on candy, soft drinks and bottled water that took effect earlier this year.

The tax on candy in particular had caused controversy, as it was not applied to candy that contained flour, meaning that Reese’s Peanut Butter Cups and Three Musketeers, for example, were subject to the tax, while Kit Kat and Milky Way bars were exempt. It came into effect on June 1, as part of the state’s effort to plug its budget deficit.

The National Confectioners Association (NCA) and its members in the Washington State Confectionery Coalition welcomed the news, having collected nearly 400,000 signatures to put the repeal on this month’s ballot.

NCA president Larry Graham said in a statement that the coalition’s work was a model for confectioners in other states to follow.

“NCA and its members sent a clear message to public officials in Washington and beyond that it is not acceptable to avoid making hard but necessary budgetary choices by instituting taxes that discriminate against certain business and burden all consumers,” ​he said.

Washington State was not alone in its plan to tax candy in an effort to reduce the gap between spending and income. Last September, Illinois consumers started paying higher taxes on candy that does not contain flour, as well as some soft drinks, 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.

The Washington State sales tax on bottled water, which also came into effect on June 1, and a tax on soda that took effect a month later, have also been repealed.

Commenting on the election results, Governor Chris Gregoire said in a statement:

“There’s no doubt I’m disappointed that voters decided to repeal the temporary sales tax recently imposed on soda and candy. We are currently closing a $520 million budget gap and going into the next biennium we face at least a $4.5 billion shortfall. The additional cuts we will have to make due to this loss of revenue will have significant consequences.”

The taxes will continue to be collected until December 1.

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