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New candy tax is a grab bag of exceptions

Mon., May 10, 2010, 6:54 p.m.

OLYMPIA – Tax protestors with a sweet tooth, rejoice. Even after the sales tax hits candy on June 1, you’ll still find plenty of sweet treats that are tax-free.

But unless you know what’s in your favorite candy, you may have trouble figuring what’s on the state Department of Revenue’s list of taxable treats. The department’s preliminary list is just out, and in each of the following pairs of items, one is taxable and one is exempt. Guess which is which:

•A box of Good ‘n’ Plenty or a box of Mike and Ikes.

•A Milky Way bar or a 3 Musketeers bar.

•A Kit Kat or a Baby Ruth.

In each pairing, the first item is exempt and the second taxable. The main difference is the use of grain-based flour in creating the treats, said Mike Gowrylow, a Department of Revenue spokesman. Those that use grain-based flour aren’t candy under the new tax law passed last month.

State and local sales tax, which is not applied to food in Washington, is being levied on candy and gum starting June 1 as one of the taxes to help close an estimated $2.8billion gap in the state’s biennial budget. The department was ordered to come up with a list of taxable candy before the tax takes effect.

Many of the “not candy” items on the department’s exempt list are licorice: black or red, bits, nibbles, whips or sticks. Licorice is made with flour.

Licorice Jelly Bellys, however, are made with peanut flour, not grain flour, and therefore fall under the candy category, Gowrylow said. But some Jelly Belly products are exempt because they are made with grain flour.

To help ease the potential confusion, the department has posted a list of some 3,000 commercial sweets and their tax status. The list is being refined through the rest of the month, Gowrylow said, and tied to the Universal Product Code for each item so retailers – or at least their cash register scanners – will know which is which and apply the sales tax appropriately.


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