What is included in Governor Maura Healey’s FY2026 budget proposal?

The $62 billion FY2026 budget focuses on major investments in transportation and education, along with tax reforms including a proposed candy sales tax.

Why is Massachusetts considering ending the sales tax exemption on candy?

The proposal aims to close a tax loophole, potentially generating an additional $25 million in revenue by removing candy from the essential food category.

What would be the new sales tax rate on candy in Massachusetts?

If the exemption is removed, candy would be subject to a 6.25% sales tax, similar to other non-essential items in the state.

Will the new tax apply to candy sold in vending machines?

Yes, under the proposal, candy sold through vending machines priced at $3.50 or more would become taxable, removing the current exemption.

How does Massachusetts compare to other states regarding candy taxation?

Currently, Massachusetts is one of only 11 U.S. states that exempt candy from sales tax. The change would align it with most states that tax candy.

How significant is the revenue impact of the proposed candy tax?

While the estimated $25 million is modest within the $62 billion budget, the proposal reflects an effort to boost revenue without raising broad-based taxes.

Massachusetts Candy Sales Tax Proposal in FY2026 Budget by Governor Healey

In the 2026 Fiscal Year Recommendation budgetary policy, Governor Maura T. Healey announced a USD 62 billion plan, primarily focusing on significant investments in transportation and education. As part of the recommendation, the Governor proposed removing the sales tax exemption on candy products, which could result in additional USD 25 million in budget revenue.

Impact on Taxable Persons

If Massachusetts legislators adopt the Governor's recommendations and exclude candies from the essential food category, such as fruit, meat, or vegetables, candy will become subject to a 6.25% sales tax. Currently, candies are exempt from sales tax, and the only exemption to these rules is if the meals are sold by or bought from restaurants or any restaurant part of a store. In that case, the 6.25% sales tax is applicable.

Additionally, the new rule will affect candies sold through vending machines valued at USD 3.50 or more, which are currently exempt from sales tax. The sales are non-taxable if stores sell products such as popcorn, chips, candy, ice cream, prepackaged pastries, etc., to be eaten off the premises.

What many see as the new tax, the Governor views as closing a loophole and a new source of revenue, although modest in the grand scale of the proposed budget, which is increased by 2.6% compared to the FY2025 budget. As stated by the Governor, the 2.6% increase is consistent with the inflation rate.

Conclusion

Massachusetts is one of only 11 US states that exempt candies from sales and use tax. If state legislators remove the exemption, Massachusetts will join most states subjecting these products to sales and use tax. Moreover, this change means that state rules will no longer categorize candies as food for human consumption from a sales and tax perspective.

However, since the revenue from these taxes would not significantly contribute to the state budget, the final decision regarding this measure remains to be seen.

Source: FY2026 Budget Recommendation - Executive Summary, FY2026 Budget Recommendation - Sections 4-141, Massachusetts Department of Revenue