Sales tax and due diligence in an M&A
Those involved in mergers and acquisitions often get understandably excited about the deal,...
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
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.
Those involved in mergers and acquisitions often get understandably excited about the deal,...
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