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Businesses brace for new taxes on candy, gum and water

Lynne Lynch<br | Hagadone News Network | UPDATED 15 years, 7 months AGO
by Lynne Lynch<br
| May 14, 2010 9:00 PM

MOSES LAKE — The June 1 start of the state-imposed sales tax on candy, chewing gum, and bottled water drew criticism from Columbia Basin business owners.

“I think the state should have balanced the budget without taxes,” said Mike Townsend, owner of Cascade Grocery in Moses Lake.

He expects one of his employees will work a full day scanning candy a second time and resetting prices to comply with the new tax.

The recent cigarette tax increase of $1 per pack creates criminals because some people say they’ll leave the state to buy cigarettes, he says.

Others may go without necessities like food to pay for cigarettes.

He commented how the government says it wants to help the poor, but ends up taxing them.

Scott Ramsden, owner of Midway Beverage, explained the bottled water tax is a sales tax paid by the consumer on the retail level.

Carbonated beverages see a price increase because “it is a tax, a tax on the average Joe,” he says.

“The main thing I would impress on, is that it’s apparently another sin tax,” Ramsden said. “If you drink soda or carbonated beverages, you’re being penalized.”

Candies containing grain based flour are not taxable, said Mike Gowrylow, a spokesperson with the state Department of Revenue.

The flour must be grain-based, not nut-based, and listed on the ingredient label, he explained.

Bottled water was subject to sales tax until 2003. The bottled water tax was removed to be consistent with taxable definitions established by a national consortium of tax agencies

“We do have a very regressive tax system and sales taxes fall more heavily on low-income people,” Gowrylow commented.

He didn’t deny the taxes were a burden for low-income people, but pointed out soda and gum aren’t items people buy for nutrition.

The Washington State Beverage Association filed two initiative measures this week to repeal the tax increases on some food and beverage products.

“These tax hikes amount to hundreds of millions of dollars in higher costs for Washington consumers and businesses in the years ahead,” stated Tim Martin, association president. “They are bad for Washington families, food processors, bottlers, grocery stores and our state’s economy … We think voters should have the opportunity to vote out the costly and arbitrary food and beverage tax hikes that the Legislature voted in.”

The association filed two versions of the measure. One version requests the repeal of tax increases on beer and one does not.

The association has not decided which version to pursue.

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