Most trick-or-treaters have no idea how scary candy tax really is – Wacky Tax Wednesday
I recently asked my 13-year-old daughter if she’s getting too old to trick-or-treat. She replied that she's not because the rest of the year her monstrous mother (that’s me!) keeps a tight lid on candy consumption. Halloween means loads of free candy. She’d be a fool to miss out.
We do funny things for candy in this U.S. Every Halloween, people of all ages spend a lot of money on costumes just to get some for free. This year, Americans are expected to spend more than $6.9 billion on Halloween candy, costumes and decorations. As a society, we seem to be kooky for candy.
Sales tax laws relating to candy are notoriously idiosyncratic and well documented. For example, there’s the whole, “It’s not candy if it has flour as an ingredient” thing. I ask you, where does this leave Twix, Kit Kat, and Red Vines?
Now you tax it, now you don’t
What went down a few years back in Washington state ratchets up candy sales tax silliness. Lawmakers in my home state applied sales tax to candy, which had long been exempt as a grocery staple. Mere months after the tax took effect, on June 1, 2010, the citizens rose up in revolt and passed Initiative 1107, which repealed the tax on candy. As of December 2, 2010, sales tax no longer applies to candy.
For the record, retail sales tax was imposed on candy, gum and bottled water in order “to preserve funding for public schools, colleges, and universities, as well as other public systems essential for the safety, health, and security of all Washingtonians.”
In preparation for the tax on candy, one intrepid Washington Department of Revenue employee devoted what must have felt like a lifetime to researching the ingredients of every candy product sold in the state. Patrick Gillespie compiled a single-spaced candy list spanning 87 pages. He volunteered for the job but later confessed, “I didn’t think it would be this big. I mean, look at how many jelly beans there are. It’s just enormous.” The food industry being what it is, there was no end in sight — he had recently been given a list of 11,000 Washington-sold Asian candies.
Had Mr. Patrick not been saved from his endless task by the passage of Initiative 1107, he might still be working on that list.
Let it be taxed
The Washington candy tax was more about revenue than health, but across America, health has deteriorated since 2010. For the first time ever, obese Americans outnumber overweight Americans, and heavy Americans outnumber those with a healthy weight. Our children are dealing with diabetes and high cholesterol. Some people think that slapping sales tax on high caloric, sugary foods and beverages can help reduce consumption and increase good health.
It may and it may not. The first to know may well be the Navajo Nation, which exempted fresh fruits and vegetables in October 2014 and imposed a 2% tax on all minimal-to-no-nutritional value foods (on top of the 5% sales tax) in November 2014.
The Navajo Nation Council isn’t sugarcoating its message. When signing the legislation into law, President Ben Shelly said, “This administration has advocated for healthy living since we took office…. Today, I am signing this legislation into law to continue our commitment to healthy lifestyles for our people.”
Whether or not it will work remains to be seen.
Full disclosure: I have a weakness for dark chocolate, Snickers, and Candy Corn.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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