Tax This, Not That
Sales tax rules may not be a topic of dinner conversation or family road trip banter, but they can be oddly amusing in their own way. From car seats to coats, when and where to charge sales tax can leave even the most savvy online retailer in the dark.
Here's just a small sample of sales tax oddities:
1. Cajun coat storage: In Louisiana, the storage of fur items such as coats, hats and earmuffs is subject to sales tax, if that storage is considered "cold storage." This is particularly good news for those two months of the year when Louisiana is a freezing 75 degrees. Federation of Tax Administrators
2. Get down from that ladder: As if mushroom farming wasn't complicated enough, Pennsylvania exempts certain mushroom-farming-related items from sales tax, including boots, boilers and brooms. However, the ladders your operation uses are subject to sales tax. Pennsylvania Department of Revenue
3. Bad Santa: Planning to hire Santa's helpers to decorate your beautiful Malibu home for the holidays? You might want to buy your own lights, reindeer and blow-up Santa first. If customers supply holiday decorations, the labor costs associated with hanging lights and trimming trees aren't taxable. California Board of Equalization
4. The eyes have it: In Texas, contact lens solution is taxable, unless it's applied directly to the eye for medicinal purposes. In this case, it would be considered an over-the-counter medication and therefore exempt from sales tax. Texas Department of Revenue
5. Carseats in Connecticut: In Connecticut, sales tax isn't charged on child safety seats, but the exemption only applies to the sale of additional bases to be used in a second vehicle. On the other hand, travel systems that combine a safety seat and stroller or travel system are taxable. In response to this announcement, one Connecticut stay-at-home dad reportedly asked, "What about the baby seat I use in my motorcycle sidecar?" Connecticut Department of Revenue
6. Zorro must pay: Dressing up as Zorro for a masked ball? North Carolina's sales tax holiday in early August only exempts masks if they're sold as part of a costume set. North Carolina Department of Revenue
7. Taxing the om: Missouri classifies yoga as a recreational activity and applies sales tax accordingly. This finding upsets those who argue that yoga is a religion and therefore exempt from sales tax. The Enlightened Church of Downward Dog, anyone? Missouri Department of Revenue
8. Be an athletic supporter: During New Mexico's August sales tax holiday, athletic gear such as gloves and pads are still taxable, but aerobics wear such as leg warmers and headbands are exempt. Answering a call from her New Mexico winter home, a certain aerobics magnate was reportedly delighted by the news. New Mexico Taxation and Revenue Department
9. Pool cleaning companies ponder: In Nebraska, swimming pool cleaning and maintenance services are exempt from sales tax, but indoor swimming pool cleaning is subject to sales tax. Whether to charge customers sales tax baffles all four pool cleaning companies in the state. Federation of Tax Administrators
10. Nutrition through taxation: In California, food or other items considered "necessary to life" are exempt. Food sold in vending machines, on the other hand, is subject to a 33 percent sales tax (ouch!), a price Hostess Fruit Pie addicts might be willing to pay for their daily fruity goodness. California Board of Equalization
11. Make sure there's a pilot: In New York, your chartered flight is only exempt from sales tax if there's a pilot. Hotels and motels, on the other hand, are taxable. If your company wants a charter that's sales tax free, be sure to hire a pilot. Federation of Tax Administrators
12. Rihanna or Taylor Swift: Sellers of digital goods face an uphill battle when determining whether to charge sales tax on music or other digital products. For example, a Rihanna song downloaded in Indiana isn't subject to sales tax. If a digital music customer in New Jersey downloads Taylor Swift's latest, however, they pay sales tax. This cost doesn't include the price of attending concerts populated by screaming tween girls. Federation of Tax Administrators
Will Frei is the social media manager at Avalara, a provider of sales tax and compliance automation services in the cloud.