I hadn’t either — until Massachusetts governor Maura Healey unveiled her $62 billion budget proposal last week, which includes an initiative to strip candy from its sales tax exemption. Right now, candy is considered food for human consumption and thus exempt from the state’s 6.25 percent sales tax — same as bananas or flour or eggs. Healey wants to get rid of that exemption, which would generate about $25 million. The two questions I had are — what candies exactly would the tax apply to, and is this really a good idea when better ways to raise revenue are available? And if it is a good idea, well, what’s the logic in stopping there? What about other sugary products, like some types of cereal and breakfast bars, that are practically candy in disguise? For that matter, what about a pound of sugar at a grocery store? “We think that makes sense,” Healey said about levying the sales tax on candy. Massachusetts is reportedly one of 11 states that exempt candy from the sales tax. “This isn’t about a new tax,” the governor said. “What this is doing is simply saying, when you go to the grocery store, instead of having candy treated like a purchase of bread and eggs and milk – you know, essential groceries – that candy is now going to be treated in the same way as when you go to the bakery in the back of the grocery store and pick up cupcakes for your kids.” But defining what qualifies as candy isn’t as straightforward as you’d think. Legally, it’s a sticky situation. “You see states drawing an administrable line,” Hayes Holderness , a University of Richmond tax law professor, told me. “Most states that address candy in their sales tax laws define candy as a sweet treat that doesn’t have any flour content … on the theory that flour has some nutritional value.” Under that definition, Twix would be treated differently than Sour Patch Kids, because apparently a cookie base would give Twix a free pass. Massachusetts, however, takes a broader approach. State law defines candy as any food item “with a sugar or confection base, including breath fresheners, gum, mints, and health foods which consist primarily of sugars, but excluding dietary supplements and adjuncts.” Holderness argues that all these complications are why he generally favors a very broad-based sales tax. “Once you introduce exemptions, that’s where all these problems come into being,” Holderness told me. “If you’re going to do that then you also need accompanying assistance for lower-income individuals who are bearing the regressive nature of the tax.” Those regressive effects are a reason to think twice about the whole idea, especially given the tiny amount of money it will bring in in the context of the state’s $62 billion budget. “What is $25 million bringing to the table” Viviana Abreu-Hernández, the president of the Massachusetts Budget and Policy Center , told me. She was actually surprised to see Healey propose eliminating the exemption. “No one has said that that was a priority for any one of our grassroots organizations or foundations.” Taxing candy, Abreu-Hernández said, “is going to be a regressive tax, because poor people are going to have to pay more for candy than rich people based on the percentage of their income that goes into that tax. We want taxes to be fair.” It’s why Abreu-Hernández’s organization has been constantly pushing for the state to eliminate a different, far more generous tax exemption — the one on the sales of private jets and helicopters, which MassBudget called a “ handout to the ultra-wealthy .” “In our analysis, if you tax aircraft and aircraft parts, you will bring in $27.6 million” in state revenue, she said. That’s more revenue than taxing candy while targeting a much smaller, much wealthier group of people. Perhaps not surprisingly, Big Candy opposes making candy a taxable item. A spokesperson for the National Confectioners Association told me via email that the group opposes “discriminatory tax increases that make food more expensive for consumers at a time when they are already facing sky-high grocery prices.” So, Massachusetts lawmakers have a choice: Do they tax the kid buying a Snickers at the corner store, or the executive flying a private jet to Nantucket?
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