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Snack tax still putting the bite on consumers

July 10, 1997

By KAREN MASTERSON

Staff Writer

Maryland tax collectors worry that consumers are still being charged tax on snacks, even though a repeal of the tax took effect last week.

Meanwhile, local store owners say they were never notified that the tax was lifted.

"We didn't get a notice. We found out when a customer showed us an article in The Morning Herald," said Ken Snodderly, owner of Valley Market in Clear Spring.

He said he read the article and immediately refunded his customer the 5 percent sales tax.

Even though state officials say notices went out, there's little evidence they were received. Seven local grocery and convenience stores contacted Wednesday said they did not receive the notices.

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"I was never notified. We made a call to confirm the date of the repeal and find out which items it applied to," said Tony Rivellino, owner of County Market in Hagerstown.

Assistant State Comptroller Marvin A. Bond said his office received up to 400 calls a day from store managers and owners wondering what's up with the repeal, and suggesting that store owners were still charging the tax.

As of July 1, all grocery stores and convenience stores must stop charging customers tax on potato chips and sticks, popcorn, pretzels, cheese puffs and curls, corn chips, pork rinds and nuts.

The repeal does not apply to liquor stores, sandwich shops, canteens and other businesses selling the snack items, if less than 10 percent of their sales is in grocery goods. Those stores must continue taxing customers.

But people like Snodderly wonder how people are supposed to know without notification. He learned the details, like thousands of others, by calling the Comptroller's Office last week.

"I guess we're in compliance now. It's all very confusing," Snodderly said.

The snack tax passed in 1992 to help the state recover from recession.

Bond said the state legislature repealed the tax - which brought in annual revenues of $14 million - in 1996 because the economy recovered and because Frito-Lay Inc., of Harford County, threatened to kill a $34 million expansion plan if the tax wasn't repealed.

"When they put it into effect, we all got letters. But I didn't get a notice on the repeal," said Barbara Kroboth, owner of BJ's Market in Hagerstown.

"I think they hope a lot of businesses will continue charging the tax," and keep revenues coming in, she said.

She also complained that the tax repeal was selective.

Food items that will continue being taxed include ice cream bars, candy bars, snack cakes and other dessert bars.

"I have to charge taxes to these kids buying ice cream bars," but not when someone buys a big bag of corn chips. "I think that's unfair," Kroboth said.

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