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TAX NEWS - JUNE 2010

U.S. Tax: Sin taxes on beer, candy, bottled water go into effect June 1

01 June 2022 -- Starting this week, consumers will shell out more for items such as beer, candy and bottled water as the state's so-called "sin taxes" go into effect. The taxes, which will help the state lower the budget deficit, increase the cost of items that people purchase every day.

As of Tuesday, buying beer will get more expensive as the state adds a tax that equals $0.28 per six-pack. The tax means that large breweries, those which make more than 2 million barrels a year, and foreign beer will be raised from $8.08 to $23.58 per barrel. Small U.S. breweries will be taxed at a lower rate, $4.78 per barrel, on the first 60,000 sold.

The candy and gum tax also went into effect on Tuesday. The tax means that a $0.75 candy bar will cost an additional $0.07. The tax will help raise $30.5 million for the current budget cycle. However, not all candies will be taxed. The state's definition of candy for the tax is "a preparation of sugar, honey or other natural or artificial sweeteners combined with chocolate, fruits, nuts or other ingredients for flavorings and formed into bars, drops or pieces." Candy that includes wheat, malt or rice flour is not included in the tax. For example, candies not taxed include: Kit Kat bars, licorice and Whoppers.

Tuesday also began the bottled water sales tax, which added $0.46 to a $4.99 case of 24 bottles of water. The tax will raise $32.6 million for the current budget. Water from self-service dispensers is not included in the tax, as it is not considered bottled. People who do not have a readily available source of potable water will not be taxed, and neither will those who have a prescription for it. In those cases individuals will pay the tax at retailers, but can request a refund from the state.

On July 1 the carbonated beverage tax goes into effect. This will add an additional $0.02 to every 12 ounces of soda sold. It applies to all carbonated beverages, except sparkling water or alcoholic beverages. It will raise $33.5 million for the current budget and $72.4 for the 2011-2013 budget years.
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