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Tax Tip of the Week | 11 Bizarre Tax Laws January 30, 2019

Posted by bradstreetblogger in : Deductions, General, Tax Preparation, Tax Tip, Uncategorized , trackback

11 Bizarre Tax Laws

On a somewhat lighter note let’s look this week at some rather absurd tax laws in some of our own American states. By no means is this list all inclusive. The ones that follow are excerpts from “20 Bizarre US State Taxes” authored by Jamie Young published on March 23, 2018.  

– Mark C. Bradstreet

“Despite America’s quirks, it can seem fairly normal when compared with other countries. Take taxes, for example: Even when it comes to the most mundane of topics, countries overseas can devise some truly bizarre charges and fines. For example, Ireland and Denmark effectively tax cow flatulence by taxing cattle owners up to $110 per cow.

But it’s not just distant foreigners who are coming up with strange tax laws; Americans are just as creative — and ridiculous. If you live in any of these states, watch out for bizarre state taxes that could be affecting your budget, as well.

1. Kansas: Amusement Tax
Although many states charge something called an Amusement Tax, this one takes the cake. If you take a hot-air balloon ride in the state of Kansas, it’s considered transportation and tax-free. But if you want the security of staying tethered to the ground while in a hot-air balloon, that will cost you 6.5 percent since you’re just there to be amused. When you’re tethered to the ground, you are, unlike Dorothy, very much still in Kansas — and it’ll cost you.

2. Maryland: Flush Tax
In an attempt to protect the Chesapeake Bay, the Chesapeake and Atlantic Coastal Bays Restoration Fund in Maryland is supported by a $5 monthly fee on sewer bills and an equivalent $60 annual fee on septic system owners. Flushing your toilet in Maryland is now twice as expensive as it used to be.

3. Pennsylvania: Air Tax
Anything that comes out of compressed air vending machine or vacuuming vending machine is subject to a sales and use tax. That’s right, Pennsylvania taxes air. Vending machines located on schools or church property, however, are exempt.

4. Colorado: Coffee Cup Lid Tax
When you go to the coffee shop to get your morning fix, you probably take the lid for your coffee for granted — not in Colorado, though. All nonessential packaging in Colorado is taxed an extra 2.9 percent. Your coffee cup is essential, sure, but the lid that goes on it is not. Extra taxes are also charged on stir sticks, cup sleeves and straws.

5. Maine: Blueberry Tax
Maine’s state berry is the blueberry — which is considered a superfood — and Maine is almost the sole provider of blueberries to all of the U.S. So the state charges an extra tax for anything related to the blueberry industry. This tax probably isn’t going to break your bank, but if you grow, purchase, sell, handle or process blueberries in the state of Maine, prepare to pay 1.5 cents per pound.

6. Nevada: Loud Live Music Tax
Nevada businesses must pay a 5 to 10 percent sales tax on admissions, food, drink and merchandise to the state whenever there is live entertainment going on. This can include everything from animal stunt performances to comedy and magic. Uncompensated, short performances, however, are tax-free — so you can sing your heart out, for free.

7. New York: Bagel Tax
New York residents might want to switch to toast for breakfast. Any bagel that has been sliced or prepared with toppings, like cream cheese or lox, is subject to an 8.875 percent sales tax. If it’s whole or sliced without toppings or spread, however, you can eat it tax-free — unless, that is, you eat it while you’re still in the store; then you’ll also be charged tax.

8. Indiana: Cake Decorating Tax
When creating a decorated cake in Indiana, bakers can expect to pay a tax on the finishing touches. Although frosting in containers or tubes is tax exempt, cake decorations are not. According to the state of Indiana’s tax laws, frosting is not in a “bar, drop or piece” and does not qualify as candy, but cake decorations are considered candy because they are “a preparation of sweeteners and flavorings in a drop or piece form.”

9. Texas: Belt Buckle Tax
If you want to be a cowboy, or at least dress like one, there aren’t any extra taxes on cowboy boots, hats or belts. But a belt buckle is another story. In Texas — where they’re quite popular — there’s a 6.25 percent sales tax on belt buckles because they’re not considered clothes. If you’re willing to wait, you can buy it tax-free on the state’s annual sales tax holidays.

10. Tennessee: Litigation Tax
Just to add insult to injury, a tax of up to $29.50 can be levied on residents involved in criminal and civil court proceedings. Juveniles are generally exempt.

11. Arkansas: Tattoo Tax
Be prepared to pay extra sales tax in Arkansas if you’re thinking about getting a tattoo — or even electrolysis. Though it’s unlikely any rebellious teens got in trouble for coming home without body hair, electrolysis treatments are taxed an extra 6 percent along with tattoos and body piercings.”

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This Week’s Author – Mark C. Bradstreet, CPA

-until next week

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