Tax on candy: Sticky situation or sweet deal?

VANCOUVER, Wash. – A Washington state representative is backing legislation to add candy to the state’s sales tax to help fill a $2 ½ billion budget hole.

Rep. Jim Moeller, D-Vancouver said a few cents a bar would add up to $30 million a year. He said it would go to health care and would replace the money the state lost when it did away with the automobile excise tax.

“Candy is not something you have for dinner,” Moeller said. “Candy is a treat. For years there’s been this loophole in the law that has allowed candy to evade the sales tax.”

A tax on candy, however, wouldn’t be straight forward. Buyers would pay a tax on Snickers bars but not on a Twix. The tax would apply to a Reese’s Peanut Butter Cup but not on a Reese’s Peanut Butter Stick.

It’s because some candy has flour in it and that, according to tax guidelines, classifies it as food. According to Washington state's retail tax policy, "food products for human consumption" are exempt from state retail tax. (King County, however, does have its own food/beverage tax: ½ percent on purchases from restaurants, taverns and bars.)

Some Washington residents think all candy should be treated the same.

“Are you kidding me? They’re going to differentiate on that?” asked Erich Gordon, a resident of Vancouver. “I think if it’s all candy it should be done the same. That’s like a loophole, but if that’s the way they want to work it.”

Washington candy companies said the tax would eat away at profits and could end up costing jobs. But Moeller, who’s a big candy eater himself, said he doesn’t see the demand going down.

“I don’t think it will change behaviors at all,” he said. “People look at candy as a treat. It’s a comfort. They’ve grown up with it.”

The bill is currently in committee. Moeller said it’s possible the potential revenue generated by the tax would be directed to areas other than health care, but he said he hopes that doesn’t happen.