Expect to pay more for candy, shampoo

On Tuesday, a sweeping new tax law takes effect that attempts to clarify tax rates for food, candy and soft drinks. Under Illinois law, food is taxed at a low 1 percent while candy and soft drinks get hit with the full 6.25 percent (plus any local add ons).

Candy:

Defined as "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. Candy does not include items that contain flour or require refrigeration."

• Examples of candy that will be taxed at 6.25 percent are: Snickers, Starburst, Milky Way, Butterfinger, Raisinets, Dots, Airheads and Fruit Rollups.

• Examples of items taxed at 1 percent are: Twizzlers, Nestle Crunch, 100 Grand, Kit Kat, chocolate-covered pretzels, Good & Plenty, Twix, Whoppers, Clark bar and ice cream.

• Tip: Look at the label. If it says flour (yes, there's flour in Twizzlers), it's food.

• Halloween snack tip: Is that multipack of mini-candy bars candy or food? Depends on the variety in the bag. If there's a Kit Kat, Twix or other "food" variety in the bag then the entire bag is taxed as food rather than candy.

Soft drinks:

Defined as "nonalcoholic beverages that contain natural or artificial sweeteners. Soft drinks do not include beverages that contain milk or milk products, soy, rice or similar milk substitutes, or greater than 50 percent of vegetable or fruit juice by volume."

• Soft drinks are taxed at the 6.25 percent rate rather than the 1 percent "food" rate. Qualifying for the higher tax are Coke, Pepsi, Diet V8 Splash Berry Blend (8 percent juice), V8 Splash Strawberry Kiwi (10 percent juice) and Gatorade.

• Drink items that will be taxed at the 1 percent rate include Starbucks Frappuccino (contains milk), V8 (100 percent juice) and Gatorade powder packs and all other dry mix powders, like Tang or Kool-Aid.

Clean tax:

The state also is clarifying that shampoos and hygiene products should be taxed at the full 6.25 percent rate unless prescribed by a doctor. Previously shampoos and other products that touted medicinal benefits were taxed at a lower rate.

Beer, wine and spirits:

Liquor is divided into three categories.

• For a six-pack of beer, the tax increase is 2.6 cents, to 13 cents from 10.4 cents.

•On a bottle of wine, the tax increase is 13 cents, to 28 cents from 15 cents.

• And on a fifth of whiskey, the increase is 81 cents, to $1.71 from 90 cents.

• The taxes are imposed on the distributor.

Tax take:

The state expects to collect $162 million more a year from the higher candy, shampoo, soft drink and alcohol taxes.

Also going up:

State vehicle and license fees are also higher.

• Certificate of title fees increase from $65 to $95.

• Transfer of registration fees increase from $15 to $25.

• Passenger and truck B registration fees increase from $79 to $99.

• Drivers' license fees increase by $20 to $30.

Total fees:

The state expects to collect $377 million annually from the higher fees.

Other funding:

• $150 million from state's "road fund" which primarily comes from gasoline taxes.

• $300 million to $400 million from legalized video gambling in bars.

Source: Illinois governor's office, Illinois Department of Revenue, Daily Herald reporting