In 2009, the state of Illinois implemented a series of tax increases on several items, including alcohol, soft drinks, personal hygiene products, and candy.
The Candy Tax is one of many examples of the government interfering in the lives of Americans by trying to influence what they may choose to purchase. In doing so, politicians have interfered where they shouldn’t– making the tax code unmanageable for both retailers and consumers.
The Illinois Tax Code defines candy as:
“a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. Candy does not include any preparation that contains flour or requires refrigeration.”
Mike Wynne, a former counsel for the Illinois Department of Revenue, explains the frivolous nature of the tax, “If you put yogurt on a piece of fruit, it becomes a candy, but if you put it on a pretzel [which contains flour], it’s food.”
“Candy” Tax seems to be all the rage among states in recent years. Similar efforts have been made in Washington, Colorado, and Connecticut. Because of how the term candy is defined, confusion has ensued for retailers across the country. In Washington State, Butterfingers are taxed while Kit Kats are not. In Colorado, Kit-Kats are also untaxed, but Twix bars are subject levies.
“More than a dozen states have passed or proposed some sort of candy or soda tax in the 2010 legislative session, and most of them are bound to face some sort of confusion.”
Perhaps the most concerning part of this confusing code is that retailers are expected to implement the tax increases appropriately. Because of this “candy” tax, small business owners will be forced to commit their limited resources to correctly following the law. These ridiculous tax increases are not just bad for consumers, they are bad for business in general.
Arthur Paris, owner of Carnival Foods in Lincoln Park, explained how he predicted his small business would suffer:
“I anticipate having to make some arbitrary choices about what a high tax is and what a low tax is. It is virtually impossible for a one-horse shop like me to get this right.”
Art Potash, another small business owner, added:
“Good luck explaining this to customers. Then we’re the bad guy because we can’t explain it to them sufficiently. … It’s a nightmare on many levels.”
Because of this excise, Illinoisans are taxed an additional 5.25% on certain items, which adds up to 10.25% in sales tax for a candy bar. Certainly, it is practices like this one that have earned Chicago the title, “highest taxed city in the nation.”