'Snack Tax' Dropped in Maine
A U G U S T A, Maine, Jan. 1 -- Snack-happy Mainers may find they have alittle extra change in their pockets after the new year arrives.
The state’s decade-old sales tax on snack foods like ice cream,bread sticks, frozen yogurt, muffins and pretzels will be repealedas of Jan. 1.
The tax had been the target of a citizen initiative drive, whichwould have put the repeal out to referendum in November. But theLegislature acted first and voted during its 2000 session to dumpthe tax.
$15 Million in Lost Revenues
The tax on dozens of packaged munchies was enacted when thestate was in deep fiscal crisis. With money pouring into statecoffers this past year, lawmakers decided the state could affordthe roughly $15 million the repeal will cost in lost revenues thisfiscal year.
The repeal of the snack tax follows a decrease in the statesales tax from 6 percent to 5 percent, which came in two phases.The tax was reduced by a half penny in late 1998, and the otherhalf cent was dropped in July 2000.
