The latest in funny sales tax laws

General tax laws are strange. Maybe sales tax laws make more sense? You can be the judge of that.

In Florida, you can get a tax break for displaying a cow on your property. You can get a big tax break in New Mexico if you just live to 100. Louisiana lets small private aircrafts soar tax-free, and Connecticut extends that to bigger planes.

Some taxes are used to benefit specific groups. South Carolina cuts meat packers a tax break for every dressed deer or wild hog they send to a food pantry. Virginia charges half a buck a sheep to benefit the state’s ovine industry. Pennsylvania’s Malt Beverage and Liquor tax is still on the books to help victims of the Johnstown Flood, which occurred 88 years ago. Alabama retains a tax to support veterans – of the Confederate Army.

Foodies

With sales taxes or fees coming and going on groceries in places like Kansas and South Dakota, incurred solely because of sugar or flour in Illinois and Indiana or levied on blueberries in Maine depending on where they’re picked, it’s little surprise that food can come with weird sales taxes state to state. Consider New York, where prepared food – like a bagel if an eatery toasts it – costs almost 9% more than an untoasted (i.e., unprepared) bagel.

Colorado is one example of taking not only food but everything that comes with it, at least from any kind of restaurant: utensils, napkins, serving trays, platters, lids and sleeves, covers to plates or platters, straws, toothpicks and so on. And don’t forget, in the land of the snow-capped Rockies, ice used for refrigeration.

Hooves, heroes and holidays

• Some strange sales taxes seem to split hairs – or horses in Kentucky, where the animals are big business and sales tax-free even if bought online. Stud services, though, and all fees associated with bringing a breeding stallion into the state, are subject to sales tax.
• Or take Massachusetts. In most states, collectibles are subject to sales tax – and, in many states, publications are not. Massachusetts draws no distinction between a comic book that’s new or pricelessly old – both are free of sales tax. Maybe Clark Kent should’ve settled in Boston …

• Sales tax holidays are certainly ballyhooed, apparently popular and perhaps unbeneficial to public and merchant alike. Sometimes, though, sales tax holidays just plain do good – like the fixed one in Connecticut on bike helmets, kids’ car seats, college textbooks, firearm safety devices, medical goods and pollution-control equipment, to name a few.

Threads

Clothing is taxable in most states and the District of Columbia. But rules differ.

And do they: Much has been written about Texas, for instance, which charges sales tax on belt buckles. But the Lone Star State also charges sales tax on bobby pins, hair bows and clips, headbands, jewelry, wallets and watches (and bands), among others.

In Minnesota, clothing is exempt from sales tax for the most part. However, fur clothing is taxable… It is required to be labeled as a fur product and the fur must be the main component of value in order to be considered part of this category – this does not include leather, suede, or other animal skins where the fur fiber was completely removed.

Sales taxes are getting more complex all the time. Take out the guesswork – and your liability – by leaving it up to experts. Contact TaxConnex to learn what it means when sales tax is all on us.