Sales Tax On Soda, Candy Considered In The House

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A tax on sugar sweetened beverages has run into trouble in the House Ways and Means committee. But the panel is seriously considering a plan to impose the state sales tax on soda and candy.

As passed by the House Health Care Committee, the sugar sweetened beverage tax would have imposed a penny per ounce tax on soda, sugary juices and sports drinks.

Thetford Rep. Jim Masland is a member of the Ways and Means Committee. He didn’t like this approach because the tax would be levied at the wholesale level and large retailers would be able to spread the cost around to other products.

So Masland is backing a plan to end the current sales tax exemption for candy and soda.

"At least it’s an honest tax. The consumer will see it and that’s how it is," said Masland. "It’ll maybe marginally affect obesity rates through a consumption of sugar I hope that it would I don’t have any great expectations about that but at least we know what we’re taxing and the consumer sees it."

Vermont is part of a national program known as the streamlined sales tax. The eventual goal of the program is to tax Internet sales.

To be part of the program, states need to adopt similar policies regarding the sales tax.  The program actually defines what a soda is and what candy bar is.

Calais Rep. Janet Ancel is the chair of the Ways and Means Committee.

"I think those definitely issues are much easier than they used to be," said Ancel. "And we’re actually frankly not quite an outlier but we’re in a minority of states in that we don’t apply the sales tax to candy and soda. So there are certainly some good policy arguments for doing it."

Jim Harrison is the head of the Vermont Grocers Association and it’s those definitions that have him scratching his head. For instance, if a candy bar has any flour in it, it’s not considered to be a candy product and juice products that contain less than 50% juice are defined as being a soda.

"Do we want to as a state for the relatively small amount of money, you know the soft drink estimates was $3.5, for a relatively small amount of money do we want to add that confusion and cross the threshold of now taxing food."

Tina Zuk is the Vermont communications director for the American Heart Association – a group that strongly backs the sugar sweetened beverage tax. She doesn’t like this new plan because it won’t significantly raise the price of these drinks and that’s a step she says is needed to reduce consumption of these products.

"Very disappointed we hope this doesn’t come to fruition because the sales tax is different than the excise tax," said Zuk. "In that it won’t provide any disincentive for people to stop drinking the unhealthy products it’s not going to make people healthier."

Ending the sales tax exemption for soda and candy is part of a larger tax bill that’s being drafted by the Ways and Means Committee. The panel is expected to vote on the package in the near future.

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