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Candy tax approved in US city as levy for other foods ditched

By Oliver Nieburg+

03-Sep-2012

Tax on candy remains while levy goes on other foods
Tax on candy remains while levy goes on other foods

The city of Lakewood in Colorado has implemented state laws to tax candy and soft drinks at 3% while repealing earlier rules to tax a wider variety of foods.

The Lakewood City Council previously taxed food marketed for ‘immediate consumption’ at 3%, which included items such as potato chips, soda and other single-serving goods.

Candy was also taxed under the previous rules, but the latest council action means that single-serve items are no longer taxed, but the levy on candy and soda remains.

The decision was taken to align the city’s taxation to legislation set by the state of Colorado in 2010 that taxes candy and soft drinks at 2.9%.

It follows a similar move by the city of Aurora in June.

Colorado’s state tax on candy has been met with hostility by the confectionery industry since it came into effect.

Bid to repeal state candy tax

Republican Rick Enstrom, an executive for family firm Enstrom Candies and member of the National Confectioners Association (NCA) is running for the Colorado state house and is expected to overturn the state candy tax if elected.

He says on his website: “By increasing the burden on Colorado businesses we ensure that even more jobs are lost, that entrepreneurs will forego opening their doors, and that we ultimately bring in less revenue to provide the services that every citizen needs, like good schools and safe roads.”

“The solution is not to tax our way to prosperity but to make it easier for businesses to operate in our state and begin hiring again. By doing this we can bring in adequate tax revenue without raising taxes.”

Enstom is running for an uncontested seat in State District 23. The elections are due in November.

Definitions

Under the revised Lakewood tax code, "candy" is a preparation of honey, sugar or natural artificial sweeteners in combination with chocolate, fruit, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces.

Goods containing flour are excluded from the definition.

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