New sales tax hits gum, candy and more

June ended with Wahkiakum shoppers paying a higher sales tax on candy, gum, bottled water and some snack foods and non-micro beers.

Labeled “candy tax” by the media, the tax is part of $800 million tax package Washington Democrats approved early this year to help close a nearly $3 billion dollar hole in the state budget. The state budget office says tax represents about a one-fifth of a down payment on what the state needs to balance the budget.

The Washington Department of Revenue said it created a database for Washington retailers that outlines more than 6,000 items the tax would apply to. It said the trick was defining what the new law covers. If a product has flour in it as an ingredient it’s not taxable under the new tax.

The tax also includes a 28-cents per six-pack increase on some beer sold in the state. It also includes a tax on bottled water.

Now jump ahead one month. Last Friday the “Stop the Food and Beverage Tax Hikes” coalition submitted its I-1107. The initiative is designed to repeal the new “candy tax”. On July 2, the group, sponsored by the American Bottling Association, turned in 395,000 signatures to place it on the November ballot.

Tim Martin is president of the Washington State Beverage Association and told the media, “We’re submitting 150, 000 more signatures than the required. Voters have clearly shown they want the opportunity to vote out these costly and arbitrary food and beverage tax hikes voted in without adequate public input or public hearings. Initiative 1107 will give voters their say.”

The Stop the Food and Tax Hikes website says the coalition is opposed to the “candy tax” because it is expected to cost Washington consumers and businesses more than $300 million in just the next three years. The tax is also likely to impose new bookkeeping requirements on local grocery stores statewide. It also says the tax will eventually include businesses that make and handle food and beverage products.

The Stop the Food and Tax Hikes collation says their initiative would repeal the recent candy tax passed during the 2010 legislative session. Their website says if the tax is left in place it will eventually increase the price on thousands of other common food and beverage products as well.

The Washington State Wire Service included a report that said I-1107 would also restore certain business and occupation tax break for the processors of canned meats and vegetables. State Legislature reduced a tax break for the food producers early this year.

Martin said his organization views the “candy tax” as a national threat. “We feel very strongly this is not a tax that we’re willing to accept or take lying down,” he told the media.