Colorado tax tidbit: new candy, soda taxes

Colorado is home to some of the most spectacular mountains in the United States, but state revenue collection has reached new lows.

The Centennial State's deficit situation is why Gov. Bill Ritter last week signed into law a package of bills taxing a whole new variety of things, including candy and soda. 

The action was necessary, said Ritter, to help close the $2.2 billion shortfall in Colorado's budget. But even with the new income, some of which starts rolling in on Monday, March 1, Ritter said the state could face additional difficult budget choices when new revenue forecasts come out in mid-March.

In Vevey, Switzerland, my former bosses at Nestlé are really pissed off. So are many lawmakers. And when they go to grab a snack at a vending machine in a couple of months, a lot of Colorado consumers will be unhappy, too.

The new candy and soda taxes kick in on May 1. That day, affected goodies -- the legislation gets specific about what now counts as a taxable product -- will cost 2.9 cents more.

Is it just cynical me, or is anyone else seeing vending machine prices rounded up by more than a nickel?

While my former employer might take a sales hit in Colorado on Crunch and Butterfinger bars, Nestlé caught a break on the new drink tax.

Beverages that contain milk or milk products (some versions of Nesquik) or primarily fruit juice (Juicy Juice) are not classified as soft drinks under the new sales tax law. So these products remain tax exempt.

Will this move by Colorado prompt a reconsideration in Washington, D.C., of the soda tax that was floated as a way to pay for national health care changes? Probably not. I've personally seen the food lobby at work on Capitol Hill and I suspect they'll continue to beat back possible tax attacks.

Tax trip around the United States: This post is part of our series highlighting tax information from the 50 U.S. states and our nation's capital.

The State Tax Departments page provides links to official state and District of Columbia revenue Web sites so that you can find out more about your home's tax laws and filing requirements. You also can check out info on other locales in our Complete menu of tasty state tax tidbits.

As we work through the 2010 tax season, a different state will be featured each day as noted in Don't forget your state taxes! Check back to see what tax tidbit we share about your home state!

Related posts:

• Soda tax support from doctors
• State Tax Departments
• State Tax Tidbits
• Don't forget your state taxes!
• Alabama tax tidbit
• Arizona tax tidbit
• Arkansas tax tidbit
• California tax tidbit
• 9 states of no-tax note ... sort of

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