ACA 21: Sales and use tax: candy.

The California Constitution prohibits the state from levying or collecting a sales or use tax on the sale of, or the storage, use, or other consumption in this state of, food products for human consumption, except as provided by statute as of the effective date of that provision. The Personal Income Tax Law allows a young child tax credit against the net tax, as defined, to a qualified taxpayer who has at least one qualifying child, as prescribed. The law defines qualifying child to have the same meaning as defined under the federal earned income tax credit, except that the child is younger than 6 years of age as of the last day of the taxable year.

This bill would authorize the state to levy or collect a sales or use tax on the sale of, or the storage, use, or other consumption in this state of, candy and would define candy to mean a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. The bill would also raise the maximum age of a qualifying child for purposes of the young child tax credit to 18 years of age and would require that any revenues collected pursuant to a sales or use tax levied on the sale of, or on the storage, use, or other consumption in this state of, candy in the state be used only to mitigate the impact on the General Fund of that age increase.