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Confectioners say proposed candy tax will harm iconic brands, tourism

Contact: Susan Whiteside
202-534-1440
susan.whiteside@CandyUSA.com

Confectioners say proposed candy tax will harm iconic brands, tourism

State Senate considers new tax increases passed through the House

Washington, DC – This Friday, May 3, candy makers from across the state will sponsor a coffee, chocolate and candy break for members of Vermont’s legislature in an effort to voice opposition to a proposed change to the state tax code that would remove the exemption for confectionery products. Earlier this month the National Confectioners Association, on behalf of its 660 member companies including three headquartered in Vermont, submitted testimony to the state’s Senate Committee on Finance opposing H. 528, a comprehensive and regressive tax bill that would, among other things, apply a discriminatory tax on some confectionery items. Joining NCA and its members from Vermont will be several members of Retail Confectioners International, a trade group representing the interests of those companies who both manufacture and sell candy at retail in hundreds of locations throughout the country, including Vermont.

“While we are sympathetic to the state’s budget challenges, NCA opposes the removal of the sales tax exemption on candy as a means to increase state revenues,” said NCA President Larry Graham. “The adoption of a discriminatory tax on candy will have a huge impact on many small Vermont confectionery businesses and could make it more difficult for them in this tough economic climate.”

The tax was included in the draft budget passed the state’s House of Representatives, but not included in the budget put forth by the state Senate Finance Committee, noted Graham. The bill now awaits consideration on the Senate floor where it will likely remain without a candy tax. The issue will then be decided in conference between the House and Senate, with the governor already on record as opposing the measure to expand the state sales tax of 6 percent to include products such as candy, bottled water and soft drinks.”

“The inconsistent nature of the proposed legislation makes it exceptionally challenging for small retailers,” Graham added in reference to the provision that excludes products containing flour. “For example, under the bill currently being considered, chocolate-covered strawberries will be taxed, while chocolate-covered pretzels will not. Big retailers rely on sophisticated scanning capabilities to sort out the confusion, but small retailers, including those represented by Retail Confectioners International, will have a significant burden placed on them when it comes to figuring out all these intricacies.” 

 

Graham also pointed out that Vermont is a state that thrives on tourism and is very proud of its distinctive and locally-made foods, like the handmade maple candies found in hundreds of locations around the state. "Choosing to levy taxes on Vermont’s most notable and unique products harms tourism and may lead to lost revenue for the state," he said.

NCA, as well as the Vermont candy industry, strongly opposes this regressive tax that will affect not only retailers and consumers, but also the state’s small, family-owned confectionery manufacturers and suppliers who employ around 1,000 people. NCA will meet Vermont confectioners this week to highlight the products they make and speak with state officials about the potential impact of this tax on local small businesses.

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About the National Confectioners Association (NCA) - The National Confectioners Association fosters industry growth by advancing the interests of the confectionery industry and its customers. Serving as the voice of the industry, the Association advocates for the needs of the industry before government bodies, helps the industry understand and implement food safety and other regulations, provides information to help members strengthen business in today’s competitive environment and creates relationships between all sectors of the industry including manufacturers, brokers, trade customers, suppliers to the industry and our consumers.