This study examines how changes in state sales tax rates affect retail prices and consumer purchases of soda and candy. Between 2009 and 2018, five U.S. jurisdictions (Arkansas, Colorado, Illinois, Vermont, and Washington, D.C.) eliminated reduced sales tax rates on these products, providing natural experiments for analysis. Using retail scanner data from 2008 to 2019, the study applies Synthetic Difference-in-Differences and related methods to estimate causal effects of these policy changes. The results yield three main findings. First, statistically significant reductions in sales volumes are observed only in states where tax increases exceeded five percentage points. Second, stronger consumer responses are observed for soda than for candy. Third, consumer responses strengthen gradually over time rather than materializing immediately. This is the first study to comprehensively analyze the effects of sales tax exemption terminations on beverage and snack markets across multiple states with staggered adoption, demonstrating that the magnitude of tax effects may be associated with product characteristics and tax rate changes, with important implications for the design of health-related tax policies. 

A draft is available here.