A new Illinois candy tax is already causing confusion, a whole month before it is set to hit customers, the Chicago Tribune reported.
The state candy tax, slated to go into affect on Sept. 1, is being put into affect to help pay for a $31 billion public works program Illinois Gov. Pat Quinn recently signed into law. The new tax rules demote candy and soft drinks from the “food” group, making them subject to the full sales-tax freight, which can run as high as 10.25% in Chicago. A $1 candy bar that now sells for about $1.02 with tax will cost about $1.10. under the new rules.
But just what constitutes candy under the law has c-store operators and consumers alike scratching their heads. While a Hershey’s bar is considered candy under the new tax law, it’s Cookie’s ‘n’ Crème spinoff is not. Meanwhile a Butterfinger counts as candy, but Butterfinger Stixx with its wafer center is not. In addition, Twix, Kit Kat and Twizzlers are not considered candy under Illinois law even though they have been staples of the candy aisle for years.
“Good luck explaining this to customers,” Art Potash, owner of the Potash Bros. chain of neighborhood food marts in Chicago told the Chicago Tribune. “Then we’re the bad guy because we can’t explain it to them sufficiently. It’s a nightmare on many levels.”
Just what are lawmakers thinking? Sweets containing flour as an ingredient-and there are a lot of them-are not legally allowed to be called candy, even if common sense and taste say otherwise, which is why licorice-based products such as Twizzlers, which contain flour, won’t be affected by the candy tax.
The new definition could force retailers to study the fine print on ingredient labels for hundreds of common products and then make difficult judgment calls on their taxability. Some legal experts say the complexity built into the law could make it a candidate for a legal challenge.
What’s more, outside of Chicago the tax will vary from town to town and county to county. So, while interpreting the new rules may not be a problem for the Wal-Marts and Walgreens in the state, which have large staffs of legal and product experts on the payroll, small grocers and mom-and-pop c-stores are going to face a tough challenge.