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Originally published Friday, February 26, 2010 at 2:15 PM

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Guest columnist

The state proposal to tax candy is unfair to local manufacturers

The state House should abandon its proposal to impose a tax on candy, writes Jean Thompson, CEO of Seattle Chocolates. The tax that consumers pay will have them buying less of the confections produced by Washington manufacturers that already are struggling in a difficult economy.

Special to The Times

IN an effort to raise revenue, the governor proposed and the state House is considering a tax on candy. That includes confections made by Washington companies such as Seattle Chocolates, Fran's, Brown & Haley, Johnson's Candy, Liberty Orchards, Theo's and Dilettante's before Washington consumers have an inkling that their favorite candy treats are about to cost them more.

The truth is, the adoption of a discriminatory sales tax will have an immediate impact on our state's many confectionery businesses. Unfortunately, while hurting Washington confectioners, the revenue raised from such a tax will be insignificant compared to the budget deficit we face.

At Seattle Chocolates, we've been selling fine chocolates that are a celebration of life since 1993. We sell confections made with wonderful, all-natural ingredients such as double-distilled Northwest peppermint oil, legendary Seattle espresso, pure hazelnut butter and freeze-dried natural blackberries. I am optimistic about the future growth of Seattle Chocolates and want to share this growth with our 50 full-time employees and 40 seasonal employees.

But the past year has been tough economically, and we are mindful of every dollar we spend in our business. We value our employees and provide excellent benefits packages that include good health-care programs, paid vacation and retirement savings plans.

But the costs of these benefits are increasing, especially with the cost of health care. At the same time, the price of sugar and cocoa, two of our main ingredients, are at all-time highs. We also have an annual corporate donation budget for organizations based in the Pacific Northwest that advocate on behalf of women, children and cancer research.

We are doing the best we can to manage all our costs and still take advantage of growth opportunities for Seattle Chocolates. The last thing our company or other local confectionery businesses can afford at this time is to tax our customers for buying our products. Instead, we need a business environment in Washington that supports small businesses and that will promote our growth. If we can continue to grow, we can continue to hire more Washingtonians.

In addition to the impact on the business of candy, the tax proposal is discriminatory as well as confusing. Candy is being singled out as an "OK" food to tax because it's not a "necessary" food.

Tell that to your mother, friends and the fourth-grade teacher who smile with pleasure at the mere thought of chocolate. And tell that to the producers of the butter, cream, nuts, fruits and cocoa that we purchase to use in our chocolates. These same ingredients are also in ice cream, cakes, cookies, brownies, peanut butter and cherry pie, yet these items will not be taxed. Are these "necessary" foods?

And to further add to the nonsensical nature of this tax, the definition of candy is not straightforward. In the proposal under consideration by the House, a chocolate-covered salted pretzel would not be taxed, yet our chocolate-covered caramel would.

The ambiguities in the definition will distort the candy marketplace and cause very real collection and enforcement problems at retail stores that lack sophisticated scanning systems.

Seattle Chocolates is proud to be located in Washington, in the Seattle community that is our namesake, and we stand prepared to do our share to help our community in these difficult economic times. However, we do not support a tax program that singles out our products and, most important, that taxes the consumers of our products.

It makes more sense from a tax-policy standpoint to treat all food the same.

Jean Thompson is the owner and CEO of Seattle Chocolate Company.

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