Next year when you bite into that leftover Halloween candy, the discomfort won’t only be from the calorie count but also increased cost due to taxes if Colorado Gov. Bill Ritter’s proposal to tax candy and soda-pop sales is adopted. Colorado would become one of a growing number of states and localities going after candy bars and soft drinks.
And, like cigarettes and liquor, sweet treats would achieve a special status as items whose consumption is discouraged by the very governments that become dependent upon the revenue the products provide. Ritter’s office estimates that eliminating the sales-tax exemption for candy and soft drinks would generate $17.9 million and help avoid deeper cuts to schools and colleges.
Illinois recently subjected candy and soft drinks to sales tax, San Francisco is considering a soda tax, and candy and soda tax proposals have been considered this year in Massachusetts and Pennsylvania. Even President Barack Obama said recently he was interested in the idea of taxing soda, saying kids were drinking too much of it.
Colorado’s Department of Public Health and Environment has produced a 154-page Colorado Physical Activity and Nutrition Program plan for 2010 that, among other things, advocates that businesses create a healthier environment by not setting out trays or bowls of candy. And groups such as LiveWell Colorado, which promotes healthier eating and lifestyles, applaud Ritter’s idea to tax the foods as well.
Polling from the Kaiser Family Foundation this year has shown only narrow majority support for taxing “junk” food and soft drinks, usually polling in the low to mid-50 percent ranges for both ideas.
The so-called candy tax was among 13 tax credits and exemptions Gov. Bill Ritter proposed repealing to generate $131.8 million to help balance the 2010-11 state budget, which is facing a $1 billion shortfall.
A legal opinion last year said that while lawmakers cannot raise taxes without voter approval, they can eliminate tax exemptions and tax credits without asking Coloradans as long as the new revenue generated doesn’t exceed limits under the Taxpayer’s Bill of Rights in the state constitution. Critics say doing so still would violate TABOR, but the matter hasn’t been put before a court yet.
Since 1980, the state has not imposed sales tax on food purchased for home consumption, with a few exceptions that include vending-machine beverages, chewing gum and certain deli items. Ritter proposes applying the state’s 2.9 percent sales tax to “candy” and “soft drinks” sold everywhere, not just vending machines.
According to Ritter’s office, at least 16 states tax candy along with all food, while 14 exempt all food except candy. A 2006 report from the Grocery Manufacturers Association said 20 other states imposed either a sales tax or special tax on soft drinks and/or candy. Ritter officials say the fact that other states have been doing it shows such a tax could be workable in Colorado despite industry concerns it would be unwieldy.