Members of some generations may well-remember those five-and-dime stores that offered “penny candy” for, well, mere pennies. Confections may cost more now than they did back then, but such products have remained an affordable luxury, for the most part, even in these difficult economic times.
That said, many of today’s consumers find themselves pinching pennies like never before.
And very soon, residents of the state of Illinois (such as myself) will be forced to choose between that stress-relieving chocolate bar they’ve been craving and precious extra cents in their pockets.
As journalists Bob Secter and Ameet Sachdev this week reported in the Chicago Tribune, the state of Illinois has approved a new tax on grocery items previously counted as “food” by retailers. Under new legislation (which goes into effect Sept. 1), taxes on a number of mainstream candy products (such as Butterfinger) could run as high as 10.25% here in Chicago, the writers noted. (Tax rates outside of Chicago will vary.)
Yes, a number of mainstream candy products will be affected … but not all. As the Tribune explained, any item made with flour (such as Twix, Kit-Kat and Twizzlers) will remain under the “food” banner and, as such, remain exempt from increased taxation.
This new tax law (like most other tax laws) is confusing, to say the least. Unless consumers are provided with a list of which of their favorite confectionery products contain flour or are looking to read every ingredient statement in the candy aisle, they’re likely in for a surprise at the checkout when their receipts total more than they counted on. An additional eight cents for a single Hershey’s chocolate bar is one thing, but anyone purchasing more than a few pieces of chocolate or non-chocolate candy NOT containing flour is certain to notice a difference in their spending, especially in the long-term. (Pennies add up.)
If the kids get wind of this, all hell could break loose. Lucky for new Governor Pat Quinn, most children don’t follow the news. Plus, Mom and Dad are the ones buying most of the candy for young consumers, including teens – more so now that the part-time jobs once worked by high schoolers have been taken by adults in need of spare cash following paycuts and layoffs.
While we Illinoisans may not miss the negative media attention brought on our state by former Governor Rod Blagojevich (and his sweeping bangs), we’re less than thrilled by gratuitous tax changes such as these by Governor Quinn … especially confusing ones. And not only is this new legislation confusing, it seems a bit unfair, doesn’t it?
Just ask Mars, Inc. When I asked the manufacturer to comment on the issue, it responded that the recently passed Illinois tax "singles out and discriminates against confectionery products without justification, creating arbitrary and inconsistent categories of food products. In addition to being discriminatory, the tax is burdensome and confusing both to consumers who must pay it and to retailers who must collect it."
Although the National Confectioners Association (NCA) did not respond to Illinois’ actions directly, it did issue me its general stance on state taxes on candy: “Periodically, state legislatures consider enacting sales taxes that single out certain foods. The National Confectioners Association and it members oppose these discriminatory taxes for many reasons. First, tax policy should not interfere with the marketplace by creating competitive disadvantages for arbitrarily created food classifications. Furthermore, varying tax rates for different types of foods create confusion and compliance problems with retailers and others who are charged with collecting the taxes. Additionally, food taxes hurt lower and middle income American families who spend a larger portion of their income on food purchases.
“Occasionally, legislators claim that the aim of these discriminatory taxes is to help curb the obesity epidemic in the U.S. However, food taxes do not address the myriad of issues that lead to weight gain and can create an atmosphere of blame that is counterproductive to the real issues of overweight and obesity.”
As an NCA spokesperson added, “It’s hard to imagine a legitimate rationale as to why a dark chocolate covered almond would be taxed, for instance, while a doughnut would not.”
Looks like I might have to follow the advice of one Tribune reader, who at the end of the aforementioned article suggested heading to Indiana for candy from now on. That and some fireworks, of course. Both cost mere pennies in Illinois’ neighboring state.