Top Ten Most Unusual U.S. Sales Tax Laws for 2006
After reviewing the latest tax laws from across the nation, First Data Corporation and www.taxware.com Taxware’s team of domestic and international tax experts has compiled a list of the ten craziest sales and use tax laws in America for 2006. They are:
10. West Virginia, where American Independence is celebrated with a special tax on sparklers and other novelties, in addition to the state’s regular 6 percent sales tax.
9. Kentucky’s thoroughbred stud fees are subject to sales tax (that would be thoroughbred horses). “You would not believe how many checks I send back because they forget to add the $30,000 in sales tax to the $500,000 fee!” one breeder told Taxware.
8. In North Carolina, members of racing teams and motor-sport sanctioning bodies can obtain refunds for sales tax paid on aviation fuel (used to get to a motor sport event) because the state is a tax-free zone for motor sports.
7. Using a pay-phone in Kentucky is tax free as of January 1. Right across the state line, however, Indiana still taxes pay-phone calls.
6. Cloth diapers are exempt from sales tax in Wisconsin, however, disposable diapers are taxable.
5. In California fresh fruit is tax-exempt unless it is purchased from a vending machine where it is taxed on 33 percent of the price.
4. Texas’ holiday spirit includes a heaping helping of taxes: holiday trees decoration services are taxable, but only if the decorator provides the ornaments, as are holiday pictures painted on windows, phone calls from holiday characters and greeting cards featuring Santa Claus or the Easter Bunny.
3. Dead people in Ohio get a tax break because applying makeup in a mortuary is tax-free, while applying makeup in a beauty salon is taxable.
2. South Dakota taxes air ambulance services but not ground ambulance services.
And the craziest American sales tax is….
1. Pennsylvania taxes air. That’s right, use of coin-operated vacuum vending machines, commonly found at car washes, is now taxable. No word on whether extending this to the air from air compressors used to fill tires is next on the list.
www.taxware.com Taxware, a First Data Company, is an industry leader focused exclusively on global commercial tax compliance systems.