Unique State and Local Tax Facts

February 17, 2020 | Article

Some state tax laws are complex, others are pretty straightforward ... but then there are those state tax laws that are just downright odd. Read on to learn about some of the more interesting state tax laws we've come across.

  1. A long time ago, the state of Pennsylvania passed a tax on alcohol to rebuild the city of Johnston, PA after two devastating floods. By 1942, the city was rebuilt, but the tax remains and brings in nearly $200 million dollars every year.
  2. New York City places a special tax on prepared foods. So, sliced bagels are taxed once as food and again as prepared food, thus creating a sliced bagel tax.
  3. Maine has a special tax on blueberries.
  4. Pennsylvania has a tax on coin-operated vacuum machines at gas stations.
  5. Pittsburgh has a 5% amusement tax on anything that offers entertainment or allows people to engage in entertainment.
  6. States like Iowa, Pennsylvania, and New Jersey exempt pumpkins from a sales tax but only if they will be eaten and not carved.
  7. In 2005, Tennessee began requiring drug dealers to anonymously pay taxes on any illegal substances they sold.
  8. Despite marijuana being illegal on a federal level and in most states, many states impose taxes on the sale of marijuana.
  9. In Arkansas, body piercings, pet growing, and gutter cleaning are all subject to a 6% sales tax.
  10. In California, snuff tobacco is taxed differently depending on its type. Dry snuff is taxed at 256% of its price if it’s $1.70 or more. Moist snuff is taxed at 170% of its price if it’s $1.70 or more.
  11. In Chicago, candy that is prepared with flour is taxed as food at 1%, while candy that is prepared without flour is taxed as candy at 6.25%.
  12. In Florida, a sales tax holiday was created that included items like fanny packs, bowling shoes, school supplies, vests, and a seemingly randomly assembled list of other items.
  13. Numerous states charge a tax on admissions to racetracks and casinos.
  14. In California, fresh fruit bought through a vending machine is subject to a 33% tax.
  15. In Oregon, double amputees get a $50 tax credit.
  16. In West Virginia, there is an additional tax on sparklers.
  17. Kentucky levies a sales tax on thoroughbred stud fees (whether the horses were in the Derby or not).
  18. In Texas, Christmas tree decoration services are subject to a tax only if the decorator provides the decorations and ornaments.
  19. In Texas there is a tax on holiday- themed pictures that are meant to be placed on windows.
  20. Many cities and states level a “jock tax” on any income earned by entertainers and athletes while working in that city. Therefore, athletes must pay taxes on a portion of their income in any place they play.
  21. Wisconsin is one of the few states that levies a tax on internet access. When dial-up was a popular method of getting online, there was double taxation occurring because phone calls were also taxed.
  22. In Colorado, essential food items are tax-free, but straws and cup lids are subject to sales tax because they are nonessential food items.
  23. In New Mexico, people over 100 years old are tax-exempt, but only if they are not dependents.
  24. In many states there are “occupancy taxes” for anyone who books a room in a hotel.
  25. In 2004, Maryland imposed a tax on residents whose houses are hooked up to sewers leading to treatment plants. Proceeds go to protect the polluted Chesapeake Bay.
  26. The City of Chicago taxes soda bought in a bottle at a rate of 3%, and taxes soda from fountains at a rate of 9%.
  27. In Tennessee, there is a tax on all litigation. The tax tends to discourage frivolous lawsuits.
  28. In Minnesota, there is a special tax on fur.
  29. In the state of Kansas, untethered hot air balloon rides are exempt from sales tax because they are considered a legitimate form of air transportation. Tethered hot air balloon rides, are an amusement ride and therefore are subject to sales tax.
  30. In 2007 Texas lawmakers imposed a $5 tax on establishments that host live nude shows and allow alcohol consumption on their premises. It is something called the “pole tax.” The revenue helps support sexual assault victims and provides health insurance for the poor. The tax was most recently upheld in 2011.

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