Published: Tuesday, January 26, 2010
Lawmakers propose candy tax to help fill budget hole
A House bill would extend the sales tax to some kinds of candy, raising an estimated $32 million a year in the future.
OLYMPIA — Taxing chocolate bars to fund public health programs and nibble away at the state's budget deficit may be something Gov. Chris Gregoire can stomach.
On Monday, she said extending sales tax to candy won't harm the state's economic recovery — a key criteria she will use in deciding what taxes she'll back to help fill the $2.6 billion hole in the budget.
“I'm more than willing to look at candy and gum,” she said without specifically endorsing a House bill that would extend the tax to those sweets.
Moreover, buying candy is a choice for consumers, she said, acknowledging a point made by supporters of the tax who argue such sweets should no longer be deemed food and thus untaxed.
“When was the last time you turned on the TV and heard, ‘Skittles, it's what's for dinner?'” Rep. Jim Moeller, D-Vancouver, author of the proposed legislation, said at a hearing last week.
Yet under House Bill 2388, consumers could still find tax-free sweets. The bill exempts any item made with flour or requiring refrigeration.
Ann Haley, an executive of candymaker Brown & Haley in Tacoma, makers of Almond Roca, said that definition is “confusing at best.”
“Butterfingers would be subject (to the tax) and Butterfinger Stixx would be exempt,” she testified.
While some lawmakers are concerned by the bill's definitions, others are focused on the rewards it may reap.
The sales tax would vary depending on where the candy is bought. If enacted, the tax would take effect later this year and generate about $17.7 million in the remaining months of this budget and $32 million a year in the future.
Those dollars would be much welcomed by the Snohomish Health District and other providers of public health services throughout the state.
At a legislative hearing last week, Snohomish County Councilman Dave Gossett told of layoffs and service cutbacks at the health district because of a lack of funding. He encouraged lawmakers to find a dedicated source of dollars for the programs.
The bill pledges a minimum of $100,000 to each district with the remainder of the funds distributed on a per capita basis.
House Bill 2388 is awaiting action in the House Health Care and Wellness Committee.
Meanwhile, on Monday, Rep. Sharon Tomiko Santos, D-Seattle, introduced a bill to tax bottled water and use the proceeds for public health. As proposed, the tax would amount to about a dime for a liter of water.
A hearing on that bill had not been scheduled as of Monday evening.
Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.
On Monday, she said extending sales tax to candy won't harm the state's economic recovery — a key criteria she will use in deciding what taxes she'll back to help fill the $2.6 billion hole in the budget.
“I'm more than willing to look at candy and gum,” she said without specifically endorsing a House bill that would extend the tax to those sweets.
Moreover, buying candy is a choice for consumers, she said, acknowledging a point made by supporters of the tax who argue such sweets should no longer be deemed food and thus untaxed.
“When was the last time you turned on the TV and heard, ‘Skittles, it's what's for dinner?'” Rep. Jim Moeller, D-Vancouver, author of the proposed legislation, said at a hearing last week.
Yet under House Bill 2388, consumers could still find tax-free sweets. The bill exempts any item made with flour or requiring refrigeration.
Ann Haley, an executive of candymaker Brown & Haley in Tacoma, makers of Almond Roca, said that definition is “confusing at best.”
“Butterfingers would be subject (to the tax) and Butterfinger Stixx would be exempt,” she testified.
While some lawmakers are concerned by the bill's definitions, others are focused on the rewards it may reap.
The sales tax would vary depending on where the candy is bought. If enacted, the tax would take effect later this year and generate about $17.7 million in the remaining months of this budget and $32 million a year in the future.
Those dollars would be much welcomed by the Snohomish Health District and other providers of public health services throughout the state.
At a legislative hearing last week, Snohomish County Councilman Dave Gossett told of layoffs and service cutbacks at the health district because of a lack of funding. He encouraged lawmakers to find a dedicated source of dollars for the programs.
The bill pledges a minimum of $100,000 to each district with the remainder of the funds distributed on a per capita basis.
House Bill 2388 is awaiting action in the House Health Care and Wellness Committee.
Meanwhile, on Monday, Rep. Sharon Tomiko Santos, D-Seattle, introduced a bill to tax bottled water and use the proceeds for public health. As proposed, the tax would amount to about a dime for a liter of water.
A hearing on that bill had not been scheduled as of Monday evening.
Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.
Story tags »
• State • Taxes • Governor • Legislature • FoodWhat would be taxed?
This is how House Bill 2388 defines candy: “Candy means a preparation of sugar, honey or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops or pieces. Candy does not include any preparation containing flour and does not require refrigeration.”
Would be taxed: Butterfinger, Hershey’s Milk Chocolate bar, Almond Roca
Would not be taxed: Milky Way, Kit Kat, Nestle Crunch, licorice,
Butterfinger Stixx
Source: Testimony of Ann Haley, chairwoman of Board of Directors, Brown & Haley
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