Savor those candy canes now. Come next Christmas, they and other treats might be a bit more expensive.
As if cavities weren’t enough, Washington residents with a sweet tooth could have another problem on their sticky hands if a proposal introduced ahead of the Jan. 11 start of legislative session becomes law: a tax on candy.
The idea has been floated before without success – and might have a tough time again as opponents raise the specter of tots taxed out of their allowance. But this year’s $2.6 billion budget shortfall could give state lawmakers more appetite for it.
Candy, like most food, is exempt from Washington’s 6.5 percent sales tax and local add-ons. Supporters of ending the exemption say it encourages eating unhealthy sweets, but Brown & Haley Chief Executive Pierson Clair said a candy tax would cut into sales of its Almond Roca and other products and hurt its roughly 300 Tacoma workers.
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“Candy is merely a small celebration in life,” Clair said. “To put a tax on a simple celebration which will yield not a lot of dollars seems rather silly to me.”
Extending the sales tax to candy and gum would raise $28 million in its first year, the Department of Revenue estimates.
“I don’t think that candy and gum are foods,” said Rep. Jim Moeller, a Vancouver Democrat who introduced the proposal. “I think (the tax) gives us an opportunity to kind of change some of the cultural thinking about it, and at the same time raise some money.”
Twenty-nine states tax candy and gum, according to the Economic Opportunity Institute, which supports the tax.
Under Moeller’s proposal and a similar measure introduced last session by Sen. Jeanne Kohl-Welles, any money collected wouldn’t help fill the state’s budget gap. Instead, it would pay for public health care.
A tax should be related to the revenue raised from it, said Kohl-Welles, a Seattle Democrat who plans to revive her measure next year. She would dedicate the money to dental and medical services by awarding competitive grants to community health centers. Moeller’s plan calls for spreading the money out to all local health jurisdictions for them to use as they see fit to improve public health.
But legislators may prefer to apply any candy tax to the state’s bottom line. Sen. Debbie Regala, D-Tacoma, said she wants to consider removing sales-tax exemptions for certain foods, but only as one solution among several for the budget crunch.
“We need to look at the general fund, and how we fill that $2.6 billion gap,” she said, “and it has to be things that are going to solve that problem.”
A member of the Legislature’s Republican minority, Rep. Ed Orcutt, questioned whether taxes dedicated to public health would be merely a way of taking existing money from health care to fill the budget shortfall. He prefers balancing the budget using cuts alone.
“We’re going to be putting a tax on 5- and 6-year-olds? I mean, come on,” said Orcutt, of Kalama. “I think it’s a downright shame that we’ve gotten to the point where we actually have to tax kids to balance our budget.”
But the nonprofit Economic Opportunity Institute says candy is contributing to those same children’s bulging waistlines. Their parents, too: 25.4 percent of Washington adults are obese, according to the federal Centers for Disease Control and Prevention.
“We should not be encouraging the consumption of candy and gum. It’s unhealthy, as we know,” said John Burbank, executive director of the institute.
Clair begs to differ: His candy is made of healthful almonds and other all-natural ingredients, he’ll have you know, and is perfectly fine when eaten in small amounts.
Other states have wrestled with how to define candy. For example, when you’re breaking off a piece of that Kit Kat bar, are you eating a piece of candy with a cookie center, or a cookie with a candy shell?
It’s a cookie for tax purposes, said Scott Peterson. He’s the executive director of the Streamlined Sales Tax Governing Board, which has written a definition of candy that many states now use and that both the Senate and House proposals borrow. No sweets containing flour would be taxed, nor would anything needing refrigeration.
When Illinois adopted the definition this year, it confused retailers trying to figure out what to tax, said Susan Smith, spokeswoman for candy-maker trade group the National Confectioners Association. But Marilyn Watkins, policy director for the Economic Opportunity Institute, said the tax is easy for retailers now that there is a uniform definition and a list of which foods qualify.
However they define it, legislators would be taxing a staple of Washington snack breaks. Even Kohl-Welles, the senator proposing a tax, acknowledges she loves snuggling up in bed with a good novel and some nice chocolate.
“It’s a comfort food,” she said.
The holidays are Johnson Candy Co.’s busiest time of year, as shoppers load up on boxes of bon-bons at the Tacoma shop. It’s an annual pilgrimage for Martha and Allen Crandall of Federal Way, who panned the idea of a tax.
“I think it’s just another way for them to get their hands in your pocket,” Allen Crandall said.