Paul L. Caron
Dean




Thursday, September 3, 2009

The Twix Tax Test Brings Twisted Results

Chicago Sun-Times, The Twix Tax Test Brings Twisted Results:

A quick check of how retailers are applying Illinois' new sales tax law that took effect Tuesday shows that knowing what to count as candy vs. food will be a bit of a challenge.

Candy used to be considered food and taxed at a lower rate than other merchandise, but it no longer is exempt from the state sales tax. Now it is taxed the full rate -- 10.25% in downtown Chicago. But what counts as candy vs. food?

The law's definition of candy is simple, but it contains this exception: "Items that contain flour or require refrigeration are not considered candy."

A quick test of the law Tuesday produced mixed results. While Twix, the chocolate-covered, caramel "cookie bars" carried in the candy aisle of most stores, lists flour as its third ingredient, it was taxed differently at different stores.

On Tuesday, four downtown retailers taxed Twix as candy, and four taxed them as food. ... Twix isn't the only tricky item. KitKat bars and some other candy-aisle confections also contain flour. Yet treats containing peanut butter, a popular "food," are still, by law, candy.

(Hat Tip: Steven Szydelko.)

https://taxprof.typepad.com/taxprof_blog/2009/09/the-twix-tax.html

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