Soon, the Breakfast of Champions may be a bowl of candy.  Not that the ingredients will have changed in Wheaties, only the way the state determines it should be taxed.  Your childhood favorites: Cheerios, Rice Krispies, and Lucky Charms?  Candy.  Raisin Bran?  Candy.  Oh, but Cookie Crunch?  That’s definitely cereal.

This month, the Streamlined Sales Tax Project (SSTP), a closed-door cartel of state policymakers that essentially writes the tax code for over 20 states, will determine whether certain cereals that meet SSTP’s definition of candy should be taxed accordingly. This is a legitimate question for a group whose mission is to simplify the tax code, but often does anything but.
Under SSTP’s definition, candy is a combination of sweeteners and other ingredients that does not contain flour. Cookie Crunch and Wheaties both have sugar, but since Wheaties does not have flour (sorry, whole grain flakes) it fits under SSTP’s definition of “candy.” The request for SSTP to clarify their definition raises another good point:
Lucky Charms contains oat pieces and marshmallows. The oat pieces contain flour while the marshmallows do not [and are candy].  The oat pieces and marshmallows are sold mixed together…Should Lucky Charms be taxed as candy?
Meanwhile, candy is excluded from SSTP’s definition of food (along with soft drinks), meaning that SSTP compliant states can place targeted, higher taxes on these products. If SSTP expands “candy” to include what the rest of the world calls “cereal," that means more money for tax-and-spend politicians who raise the “candy” tax. And, in case you missed it, last month we reported on how SSTP helped lawmakers in Illinois do exactly that.
(photo by galapogos)