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OREGON SNACK TAX PROPOSAL FOUND FLAWED IN OTHER STATES

 ALEXANDRIA, Va., Aug. 2 /PRNewswire/ -- The Snack Food Association issued the following:
 A so-called "snack tax" approved by a conference committee of the Oregon Legislature on Aug. 1 resembles similar taxes that have proven to be flawed in other states, including California. The California tax was repealed by voters in a ballot initiative last November.
 Also, a tax enacted in Maine two years ago is being met with confusion and frustration by retailers and consumers, according to a study conducted in May by the Snack Food Association (SFA), Alexandria.
 A survey of grocery stores in Portland, Bangor, and Lewiston, Maine, showed a 20 to 30 percent error rate when cashiers were faced with the decision of whether to apply the tax to potato chips, granola bars, walnuts, marshmallow cream and other items. Errors were made because of the vague definition of a snack and not ignorance of the tax's existence. Potato chips were consistently taxed, but marshmallow cream and powdered drink mix (taxable items) were not.
 "This study shows the difficulty and unfairness inherent in this form of taxation," said SFA Vice President for Government Relations Jim McCarthy. Maine legislators opposed to the tax have already proposed a bill to repeal the regressive and confusing tax.
 Maine isn't the only state that realized that snack taxes aren't the answer to budget woes, according to McCarthy. After a "snack tax" was passed in California in 1991, 1 million voters signed a petition to overturn the tax, which was cited by U.S. News and World Report as one of the 10 worst economic moves of the year. The resulting ballot initiative, Proposition 163, repealed the tax by a margin of 66 to 34 percent. This was the largest victory of any initiative on the California ballot last year.
 While snack taxes prove to be incomprehensible, they also fail to meet the four requirements for a fair tax set forth by the Foundation for State Legislatures, according to McCarthy. The Foundation requires a tax to treat individuals equitably, facilitate taxpayer compliance; promote equitable, efficient and effective administration; and be accountable to the taxpayers. "Snack taxes fail to meet each of these requirements," said McCarthy.
 SFA is an international trade association of approximately 900 company members that represent snack manufacturers and suppliers to the snack industry. Snacks produced by SFA member companies include potato chips, tortilla chips, corn chips, pretzels, popcorn, extruded snacks, snack nuts, dried meat snacks, pork rinds, multigrain snacks, bite-size crackers, cracker sandwiches, filled products, party mix, trail mix, bagel chips, fruit snacks, dips and dip mixes.
 -0- 8/2/93 R
 /CONTACT: Jim McCarthy, vice president for government relations, Snack Food Association, 703-836-4500/


CO: Snack Food Association ST: Oregon IN: SU: LEG

438 08-02-93 17:42 EDT KD-DC -- DC027 -- 9472 08/04/93 15:20 EDT
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Publication:PR Newswire
Date:Aug 4, 1993
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