You’ll still pay tax on candy and bottled water for a few more days

Published 11:13 pm Tuesday, November 2, 2010

Don’t be surprised to see sales tax added to your purchase of bottled water and candy today.

While voters overwhelmingly backed Initiative 1107 to repeal those taxes Tuesday night, it doesn’t kick in until all the votes are counted and the election results certified.

Department of Revenue spokesman Mike Gowrylow provided some background on what will happen and when.

The tax changes will become effective on Dec. 2 which is 30 days after the election.

On that day, sales tax on candy, gum and bottled water will be repealed. So too will the two cents per 12 ounce can of carbonated beverages charged to bottlers.

A business and occupation (B&O) tax credit for in-state candy manufacturers (that was tied to the sales tax on candy will be eliminated.

It also brings back a tax break for businesses that manufacture food products that contain perishable meat. They will be able to once again pay a lower .138% B&O tax rate for instead of the general manufacturing rate of 0.484%.

And, just in case you were wondering, all the taxes you have paid (and might pay in the next month) are not refundable.

What will this mean for the state budget?

According to Gowrylow:

“The estimated fiscal impact of the rollbacks is expected to be $54.8 million for the remainder of Fiscal Year 2011 and $217.6 million for the 2011-2013 biennium. An additional $8.7 million could be lost in Fiscal Year 2011 due to taxpayer noncompliance and confusion following the vote, according to OFM estimates.”