Tuesday, September 8, 2009

How the new state taxes affect our shelves, and our customers

As you may know, some of the taxes for food and drink in IL recently changed. These changes do affect some of the products that we carry, and we wanted to let you know how the change may affect you.

On September 1, the State of Illinois redefined the term “candy” as it applies to state taxes. Any item containing a mix of chocolate, fruit and/or nuts is now defined as “candy.” These items used to be taxed at the food rate of 2.25%; the state now requires that they be taxed at the general merchandise rate of 10.25%. In addition to the new definition of “candy”, the state now defines any beverage containing added sweeteners as a “soft drink”, subject to the 13.25% tax on those beverages.

The new taxes on wine and spirits are being levied at the distributor level. The wine tax is negligible, and Pastoral is absorbing that cost as a courtesy to our loyal wine buyers. However, the tax on spirits is much greater, and as a result, Pastoral may eventually be forced to change pricing on gin, vodka and other craft spirits.

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