For many Floridians, the most unsettling part of Halloween isn’t ghosts, goblins, or zombies.
It’s figuring the state’s tax rules on candy.
The innocent goody bag can become a minefield of tax policy, with often-confusing rules governing grocery store purchases statewide and throughout the country.
Florida TaxWatch, the nonprofit bipartisan government watchdog, uses Halloween to demonstrate exactly which goodies are taxable and which are not.
“Florida shoppers know that most of their groceries are tax-free, but the rules can get very tricky, especially when taxing candy,” said Florida TaxWatch president and CEO Dominic Calabro. “Florida TaxWatch compiled this list of treats so that the hardworking taxpayers of Florida can better understand their tax obligations.”
Last Thursday, TaxWatch released its annual brief detailing the Halloween treats considered taxable under Florida grocery tax rules. It also compares Florida’s candy taxation rates to the 49 other states.
For example, 16 states consider candy to be groceries, which either have no tax or are exempt from sales taxes. Eleven states exempt groceries altogether, including candy, while five states tax groceries, but at a lower rate.
Florida, as well as 16 other states, does not consider candy to be groceries, and as such, taxes them at full rate.
However, in Florida, like with many other things, it only gets more confusing from there.
Most of the candy that adults hand out (and eat) is subject to 6 percent state sales tax, in addition to applicable local sales taxes. Just as long as they cost more than 10 cents.
Other candy-like food items are also taxable: candy apples, chewing gum, and breath mints, except those containing aspirin, laxative or antacids, cotton candy, fruit-flavored sticks, jelly beans, licorice, and lollipops.
(Pity the children in neighborhoods where someone gives antacids or laxatives as Halloween candy — those homes might deserve to get TP’d.)
There’s more; chocolate and glazed or sugar-coated fruit is taxable, but chocolate chips and glazed fruit are exempt from taxes when they are “advertised or normally sold for use in cooking or baking.”
Additionally, frosting, powdered sugar, and items used to decorate baked goods are exempt.
Then there are marshmallows, which Florida TaxWatch calls “both a trick and a treat”: a trick — since marshmallow candy is taxable; treat, because marshmallows alone are exempt.
For those who want to celebrate with something truly scary, TaxWatch suggests the Florida Administrative Code on taxing groceries.