Colorado retailers may soon feel a pinch from a recently approved 2.9-percent tax hike on candy sales.
Defined as “any preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings,” the bill effectively includes candy bars, drops and pieces found in many natural product stores.
“This is a not very well thought out and shallow tax,” said James Garland, assistant manager of Vitamin Cottage in Aurora, Colo. “People who buy natural and organic already pay a premium to avoid synthetic, artificial ingredients. To pass legislation that further burdens them I think is unfair.”
Cookies, brownies, doughnuts, granola bars and pretzels, even when chocolate-coated, will be exempt from the tax. “There’s a fine line between candy and a healthy treat,” Garland said. “The Senate seems to be treating some sweetened things as candy and not others, which is unfortunate. Taxing foods with artificial flavors, sweeteners, artificial colors or refined sugar—I think that would make the tax fairer. It’s well documented that things like dark chocolate, honey and agave aren’t that bad for you and may actually have health benefits.”
Others argue that selective food taxes specifically put smaller retailers at a competitive disadvantage.
“Proper collection of these confusing taxes requires sophisticated programmable scanning devices. Even large retailers can have trouble in determining which items should be taxed at a different rate than other food products,” the Grocery Manufacturers Association said in a letter in opposition to a proposed New Hampshire candy tax.
The bill, proposed by Gov. Bill Ritter is intended to address Colorado’s $1.5 billion state budget deficit and will also include an increased tax on soda.
“This is a common-sense, fair and balanced proposal that keeps the budget balanced, protects public safety and maintains critical programs that promote private-sector job creation and economic growth,” said Ritter in a release outlining his plan.
Currently, Illinois subjects candy and soft drinks to increased sales tax and San Francisco is considering a soda tax.
The Colorado bill is expected to return to the House for revisions and be signed by the governor next week.