Bostonians with a sweet tooth may be in for a nasty surprise. While Devel Patrick is no longer in office the push to lift the sales tax exemption on candy and sugary drinks is still as present as ever. If the handful of Democrats who testified before the Revenue Committee have their way a 6.25% sales tax on candy and soda could become a reality. Sales Tax Support, Some supporters of the new legislature believe that lifting the sales tax exemption from candy and soda will draw attention to the health risks associated with a sugary diet.

Rep. Kay Khan’s bill will direct the new tax revenue, an estimated $52 million, to the state’s Wellness Fund. The sum would finance competitive grants for physical activity programs in public schools. Massachusetts currently has the fourth highest rate of obesity among low-income two- to four-year-olds in the country at 16.4%. That rate is nearly 3% higher than Mississippi, one of 34 other states that tax the sale of candy and soda. “Our legislation is a starting point to changing the dynamic where a product that contributes to poor health is exempt from a tax that could fund preventative measures that would lower our health risks and costs,” Keith Mahoney, senior director of public affairs at the Boston Foundation, said.

Resistance To The Proposed Exemption Lift, In opposition to the proposed change Greg Costa, director of government affairs for the Grocery Manufacturers Association, argues that the “selective taxation of food products” will be confusing for grocers and consumers. “There’s no doubt the intent of the drafters of these bills seems quite appropriate, but this really is about taxing a selection of the population that may not affect everyone,” Costa told the committee. Advocates for the new sales tax law were unable to succeed while Patrick was in office and may not fair any better now that Gov. Charlie Baker is at the helm. Baker opposes new higher taxes, meaning that in order for candy to be taxed supporters will need to amass support from two-thirds of the House and Senate to overcome a likely veto.

To add to the potential confusion Sen. Michael Rodrigues, a Westport Democrat who represents the cranberry industry stakeholders questioned whether the tax would apply to cranberry juice as cranberry juice, which despite having added sugar, can have health benefits. Mahoney stated that regulations to handle products such as cranberry juice would be crafted and that other juices containing natural sugars would remain exempt under the bill.

The above is proof that sales tax laws are always changing and can be hard to keep up with. This is why it is important to look into the sales tax rules of the states in which you have nexus. Sales Tax DataLink offers great products to suit the many needs of our consumers. If you have questions about how our products could help your business take advantage of our free evaluation today!


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