Everybody’s heard about this summer’s 10% “tanning tax” that sent the cast of the Jersey Shore crying for salary increases. But that wasn’t the only strange tax law put into effect this year.
In fact, when it comes to sales tax, there were some real doozies.
Check out five of the strangest sales tax laws and changes to come down this year:
Strange Sales Tax Rule #1: Bringing in extra dough
You may soon see more people eating breakfast at their desks in New York. Bagels there are subject to one of the more obscure (and bizarre) sales tax regs: Whole bagels aren’t taxable, unless they’re eaten in the store where they’re purchased. You’ll pay sales tax on bagels eaten in the store even if there’s been no preparation at all. So simply slicing, for example, becomes a taxable event.
Strange Sales Tax Rule #2: A grande half-caf with some extra tax, please
You’ll need a strong cup of coffee to make sense of this sales tax reg. Just be sure it isn’t freshly-brewed. The Missouri Department of Revenue has just explained that a retail drug store’s brewed coffee sales don’t qualify for the reduced food sales tax rate because it is a “hot food item ready for immediate consumption.” On the other hand, the same can’t be said for freeze-dried coffee. The store’s frozen food sales are eligible for the reduced food sales tax rate because frozen food is a qualifying food item.
Strange Sales Tax Rule #3: Not such a sweet change
It’s long been debated whether in order to make people thinner and state coffers fatter, taxes should be imposed on unhealthy foods. Illinois made a bold move by adding a higher tax to candy, defined as “a preparation of sugar, honey, or other natural or artificial sweeteners, in combination with chocolate, fruits, nuts or other ingredients, or flavorings in the form of bars, drops, or pieces.”
So popcorn is OK, but caramel corn becomes candy subject to the higher tax. Raisins? Not taxable. Chocolate-covered raisins? Taxable candy. Think you’ve got it down? Not so fast — yogurt-covered pretzels and chocolate covered Oreos are exempt from the higher tax rate because items containing flour or needing refrigeration aren’t considered candy.
Strange Sales Tax Rule #4:
Gone are the days where the line was clear: goods are subject to sales tax, services are exempt. But Arkansas just added a list of “services” to its list of taxable processes that are a real pain … for the people receiving them.
Along with pet grooming and boat storage, you’ll now have to charge 6% if you provide tattoos, piercings or electrolysis.
Strange Sales Tax Rule #5: A holiday … from logic?
It’s nothing new: in the weeks leading up to the start of another school year, many states declare sales tax holidays to help residents stock up on vital supplies. But who knew those lockers were filled with adult diapers and fishing vests? Those were among the items on the exemption list in the weekend-long sales tax holiday in Florida this August. In addition to school supplies under $50, you could enjoy tax-free purchases on:
- ski suits
- adult diapers
- owling shoes
- fanny packs
- leg warmers
- shoulder pads, and
- fishing vests and hunting vests.
Have you encountered any strange sales tax laws? Share them here.