Wednesday, May 12, 2010
Why isn't licorice taxable?
The State has spent considerable time identifying candy and deciding if it is taxable or exempt. They have issued an 84 page spreadsheet that defines for us which items are or are not actually "candy".
The State has defined "Candy" as: 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 include any preparation containing flour and does not require refrigeration.
Licorice gets off the tax hit list because it is typically made with a binder that is more often or not flour. Make your licorice with gluten free starch and you're going to pay an extra 9.5%. So all we have to do to avoid the dreaded taxman is dredge our Mars Bar through some flour or stick it in the fridge!
I think it is going to be mighty complicated for retailers. It turns out that TWIX, Milky Way, and Wonka Bars are exempt, but Abba Zabba bars are taxable. I doubt the corner grocery really going to account for these nuances in their point of sale system? I wonder if we, as consumers will be forced to carry our pocket tax guide with us so that when we pick up a package of licorice we can argue with the clerk that it is not a taxable item. I think big stores will get it right, but the little guy... not so much. Do we get a double tax credit when we are charged taxes for a TWIX bar that we shouldn't have been charged for? Oh, it is going to be so very complicated come April.
For the record, I thought these items already WERE taxable so I don't mind this 'sin tax' on these items with little to no nutritional value. I'd rather pay an extra 9.5% on my snickers than lose a social worker or a police person. I don't think this tax unfairly targets a specific group - although those damned diabetics never pull their own weight. It does seem that the kids with Celiac disease (a serious condition where the lining of the stomach is damaged by gluten including wheat) will pay dearly for their candy treats because they won't be able to opt for the exempt licorice or Wonka Bars... they'll have to stick with the taxable Milk Maid Caramels.
I do think that the tax on cigarettes is way crazy. Tax it yes, but each package of 20 cigarettes nets our state $3.025. If you're a smoker, cigars are the way to go - to pay less taxes. According tho the May 2010 Legislative Tax Update tax on large cigars cannot exceed 65 cents per cigar, whereas moist snuff is taxed $2.526 per can. My lord...why are cigars less taxable than cigarettes? They are stinky and icky too... WHY?
No matter... the candy tax doesn't go into effect until June 1, so you have 17 days to stock up!