New Illinois sin taxes launch

Click here to watch an explainer video about the new Illinois sin taxes.

According to the Illinois General Assembly, Twix bars, Twizzlers and Kit Kats aren’t candy.

Because they contain flour, they won’t be taxed at a higher rate with the rest of the sweets.

Sales tax changes to candy, alcohol and other products approved by the Illinois General Assembly last spring to help pay for road improvements, school construction, and other public works projects take effect today.

The changes can be confusing.

Candy does not include “any preparation that contains flour or requires refrigeration.” So some granola bars are considered candy, but ice cream bars and Popsicles are not.

What about bags of mini candy bars? If there is one type of bar with flour listed as an ingredient, the entire bag is taxed as food at 1 percent. No flour means the tax is 6.25 percent, plus any applicable local taxes.

Pamela Johnsen, owner of Hi Sweetie in Algonquin, said she had been scouring the labels of the candy in her shop on Randall Road.

It’s the retailers and customers who are getting the short end of the stick, not the candymakers, she said.

“When we buy from wholesalers, we don’t pay taxes,” Johnsen said. “We are the ones that pay the sales tax and from that point it’s passed on to the customers.”

But she doesn’t think the additional sales tax will affect her business. Customers understand that she’s not the one instituting the increase.

“I have to pass it on,” she said. “It’s not a lot, but it’s enough to make it a hassle.”

The so-called “sin tax” also applies to soft drinks, as well as not-so-sinful purchases, such as shampoo.

Before the increase, shampoo already was taxed at the general merchandise rate. But dandruff shampoo, for example, made medicinal claims. It won’t get the reduced rate anymore.

Many other personal grooming and hygiene products, such as toothpaste and mouthwash, already had been taxed at 6.25 percent, so that won’t change.

Extending the sales tax to candy is expected to raise $35 million to $38 million, said Sue Hofer, spokeswoman for the Illinois Department of Revenue. Changes to tax rates for soft drinks and grooming products will raise an estimated $14 million.

The state expects to collect another $109 million from excise taxes based on gallonage and alcohol content.

At Cardinal Wine and Spirits in Crystal Lake, a chart warned customers about the price increase and showed how much the cost of some of their beverages would go up.

Jeremy Brock started working as a part-time stock boy not long after consumers were facing the last increase in 1999.

Ten years later, as the manager, he’s made sure the stockroom is full.

“The Smirnoff drinker that was paying $16 for it, now is going to drop down to something like Skol,” Brock said.

Some customers have come in to stock up on their liquor supply. But he said some were misinformed and believed that bottle of vodka would go up to $20.

Not so, Brock said.

“We’ve been doing a lot of explaining of the tax to people,” he said.

The tax increases amount to 81 cents on a fifth of liquor, 13 cents on a bottle of wine and 2.6 cents on a six-pack of beer, Hofer said.

• GateHouse News Service contributed to this report.

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