When Is Candy Not Candy?

The answer to that question has been answered by politicians in Cook County, Illinois. Starting today, September 1, 2009, any item in Illinois classified as candy will have an increase in sales tax to a whopping 10.25%, up from the 2.25% charged just yesterday.

But, wait a minute! If the item that sure looks and tastes like candy is manufactured using flour as an ingredient, it will continue to be taxed as "food" at only 2.25%. Does that make any sense? A Butterfinger candy bar will see a huge tax increase, while a Butterfinger Stixx (which contains flour) will see no tax increase and remain at the 2.25% tax level. What seems to have happened is, after deciding it was a great idea to increase taxes on candy to raise more revenues to help close an enourmous budget gap, they got stuck when it came time to define the word "candy". Their brilliant solution was to pick one ingredient as the determining factor..."does an item contain flour?"

Not only is this a totally artificial differentiation, think of the problems this will pose for merchants. The "big" chains will not have too big a problem as their computerized system can be programmed to separate the items and apply the correct tax, but the smaller merchants will be living a checkout nightmare as they try to correctly apply the new tax. Will they be forced to look at the ingredients list to see if a particular item contains flour? Once again, the small business person will suffer due to the shortsightedness of the political class.

On top of that, will we see manufacturers changing their formulas to add a smidgen of flour to avoid the tax increase and gain a competitive advantage?

I think I'm going to go out this afternoon and stock up on my favorite Snickers bars. I don't suppose I will find "flour" listed on the ingredients list….. at least for now.