Yo Peeps! Kamala Harris proposes candy tax

In a surprise announcement today, California Attorney General Kamala Harris issued a statement that candy and chewing gum will be subject to sales tax effective July 1, 2011. A written statement issued by the Attorney General’s Office states that the voter-approved “snack tax” exemption for candy and gum, in effect since December 1, 1992, was legally flawed and is longer enforceable in the state. “Given the findings made by this office, there is no legal basis for exempting candy and chewing gum from state sales tax,” Harris said. “Further, eliminating this illegal exemption will help to combat epidemic childhood obesity and serve as a much-needed source of revenue to support essential state services.”

Governor Jerry Brown and Democratic legislative leaders praised the decision and the estimated $500 million in new sales tax revenues it will bring into state coffers. In a joint statement, Senate and Assembly majority leaders said that “future generations will look back on this day as a pivotal point in our state’s history, a day on which we chose to build a healthier tomorrow for the people of California.”

Larialmya Jones, former “The Biggest Loser” reality television personality and current spokesman from First Lady Michelle Obama’s “Let’s Move” initiative, said that this decision will make a positive difference in the lives of children because “kids are unlikely to pay an average of 10% more for a candy bar, which should result in lower candy consumption and better health over the long term.”

The California Chamber of Commerce and National Confectioners Association issued a joint statement critical of Harris’ decision, characterizing it as an example of “reckless disregard for the law and for the will of the voters who approved it as a Constitutional Amendment nearly 20 years ago, in addition to burdening businesses statewide with new operating costs, to reprogram computer systems and cash registers, as well as the potential for reduced sales at a time when our state’s depressed business climate can withstand neither.”

The California Dental Association declined official comment, though sources close to the Board described the development as “troubling to our members, whose livelihoods may be jeopardized by any reduction in state candy consumption.”

California’s leading snack food companies, including Hershey Foods Corporation, Mars, Inc., Nestle, Wrigley and Los Angeles-based See’s Candies declined to comment on today’s announcement. Calls to CEO Ross Born of Just Born candy company, makers of the perennial springtime candy favorite Peeps, were not returned.

In a striking case of strange bedfellows, protest demonstrations were held in Fresno, Los Angeles, San Francisco and Berkeley, organized by an unusual mix of college students, tea party activists, and senior citizens carrying signs carrying slogans such as “Tax-Free Candy is Our Right”, “E.T. Phone Mars: It’s Time to Attack.”

When asked about potential impacts of reduced candy sales on sale tax revenue estimates, California State Controller John Chiang said that he was unconcerned because “there is no evidence to suggest that consumers will refuse to pay a few cents more to satisfy chocolate cravings and, after all, the state needs all the money it can get, even if it means taking candy from children.”

In related developments, Texas Governor Rick Perry confirmed that the state’s Economic Development and Tourism division is preparing to kick-off a new campaign to lure new businesses using the slogans, “Texas: The Sweetest Place on Earth” and “Remember the Mallo.”

Tagged as: california attorney general, candy tax, kamala harris, peeps