Energy bar maker told her product is 'candy,' subject to tax

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by JAKE WHITTENBERG / KING 5 News

Bio | Email | Follow: @jakewhittenberg

KING5.com

Posted on May 28, 2010 at 2:57 PM

Updated Friday, May 28 at 5:47 PM

BELLINGHAM, Wash - Imagine Mary Goit's surprise. After seven years of manufacturing granola and natural energy bars, the State of Washington tells her she is actually making candy.

"How do all natural ingredients in an energy bar make candy?" says Goit. "I don't get it."

Goit owns "Belly Timber," a manufacturing kitchen at her home in Bellingham. Her company advertises 'all natural gourmet survival bars' and sells them to area grocery stores.

"Our motto is 'Ingredients with Integrity,'" she says.

But she just found out from the Department of Revenue that her product will be included in the new state 'Candy Tax' that will go into effect Tuesday. State and local sales tax, which is not applied to food in Washington, is being levied on candy and gum starting June 1 as one of the taxes to help close an estimated $2.8 billion gap in the state's biennial budget.

The department was ordered to come up with a list of taxable candy before the tax takes effect.  But it's harder than you may think to determine what is considered candy and what is not. For example, a 3 Musketeers bar is considered candy and will be subject to the tax. A Kit Kat bar will go tax free.

The determining factor? Those that use grain-based flour aren't candy under the new tax law. Goit uses oats in her bars as opposed to grain.

"This law is way off base," Goit says. "Our product is for athletes and health advocates. We don't make candy."

Click here for the list of candy products that will be taxed and those products that are similar to candy that will be tax exempt (Excel spread sheet).

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