Apr 14, 2016

Here are the Most Absurd Taxes by State

Post by Freedom Partners

The Most Absurd Tax From Every State

This year, April 18 is tax day—the day when many Americans will rush to finish last-minute tax filings to meet the deadline. But six days later, on April 24, comes a lesser known day: Tax Freedom Day.

According to the Tax Foundation, Tax Freedom Day “is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year”– including federal, state, and local taxes.

This year Tax Freedom Day comes 114 days into the year, meaning Americans must work 114 days just to pay our 2016 tax bill.

In addition to the national Tax Freedom Day, each state has its own Tax Freedom Day, the day when the entire state has worked enough hours to pay off state and local taxes along with its share of federal taxes. State Tax Freedom Days vary based on state tax policies and state incomes.

While the amount of taxes that Americans pay is shocking, some of taxes that people are paying across the country are downright unbelievable.

This year, we’ve decided to remind people why we need tax reform in Washington and around the country by highlighting each state’s most ridiculous tax provision. A look at this list should have anyone calling for immediate reform to simplify our ridiculous tax code.

Alabama's Absurd Tax

Alabama

Tax Freedom Day – April 8

Card Tax:  Want to play a game of solitaire in Alabama? You’ll have to pay 10 cents to the government. Alabama is the only state with a 10-cent tax on a deck of playing cards.

Alaska

Tax Freedom Day – April 10

Oil & Gas Production Tax: Alaska places a 35 percent tax on oil and gas produced in the state – a tax that is sure to cause some pain at the pump.

Arizona

Tax Freedom Day – April 15

Ice Block Tax: Opt for cubed ice in Arizona over ice blocks to avoid a higher price. In Arizona, ice cubes are considered a tax exempt food. Ice blocks, however, are not. So if you want to buy your ice in bulk, be prepared to shell out some extra cash in tax.

Arkansas

Tax Freedom Day – April 13

Tattoo Tax: Arkansas’s additional 6 percent state sales tax on tattoos and body piercings is enough to make you rethink your ink.

California

Tax Freedom Day – April 30

Fruit Tax: It makes no sense that California has a 33 percent tax on fruit bought from vending machines, but not fruit bought in a grocery store.

Colorado

Tax Freedom Day – April 24

Nonessential Tax: Colorado has a 2.9 percent tax on “nonessential” food-related items like napkins, bibs, utensils, lids and straws. Strangely, the state of Colorado deems the coffee cup essential, but the lid nonessential.

Connecticut

Tax Freedom Day – May 21

Diaper Tax: Bad news for parents: As of February 2016, Connecticut considers children’s disposable and reusable diapers to be clothing and subject to tax, but adult diapers are exempt.

Delaware

Tax Freedom Day – April 18

Retail Crime Fee: Applying for a retail business license in Delaware? Expect a $15.00 Retail Crime Fee, which will pay for a “Retail Crime Unit” in the Office of the Attorney General to prosecute retail crime throughout the state.

Florida

Tax Freedom Day – April 20

Cow Rental Tax Breaks: In Florida there is something called a “greenbelt law” that taxes farmers and ranchers at a lower rate. Many property developers now rent cows to avoid paying taxes while preparing their land for building. Even Disney World got a $1.5 million tax break.

Georgia

Tax Freedom Day – April 17

State Hotel-Motel Fee: Expect to pay a $5-per-night fee on each calendar night you stay in a hotel room in Georgia – unless, of course, you rent for 31 or more consecutive days. After 31 days the rental becomes an “extended stay rental” and is not subject to the tax.

Hawaii

Tax Freedom Day – April 19

Liquor Tax: Hawaii’s nonsensical beer taxes are serious buzz kills. Draft beer is taxed at 54 cents per wine gallon, but beer other than draft beer is taxed at 93 cents per wine gallon.

Idaho

Tax Freedom Day – April 15

Amusement Device Decals: Idaho amusement parks are subject to very tedious, expensive taxes. If you own or operate amusement devices in Idaho, you must place a $42 decal on each machine in a visible spot. The decal isn’t valid unless the name and business address of the owner or operator is typed or printed on the face of the decal, and if you add a machine later in the year, you must buy a decal and pay the full-year fee. Separate decals are required for each monitor of a multi-player game.

Illinois

Tax Freedom Day – April 29

Soda Fountain Drink Tax: Do you prefer soda from the fountain or in a can? Hopefully in a can if you live in Chicago, which taxes can soda at 3 percent, but fountain soda syrup at three times that amount, 9 percent.

Indiana's Absurd Tax

Indiana

Tax Freedom Day – April 18

Food Taxes:  Indiana is not very s’more friendly. Marshmallow cream is tax exempt, but marshmallows are considered candy and therefore taxed at a higher rate.

Iowa

Tax Freedom Day – April 14

Sales Taxes and Exemptions: If candy “includes any preparation containing flour” and doesn’t need to be refrigerated, then it is tax-exempt in Iowa. Another weird caveat: “Costumes” count as clothing, but “costume masks” do not and are therefore taxed differently.

Kansas

Tax Freedom Day – April 19

Tethered Balloon Tax: Your Kansas hot air balloon experience will only be taxed if it is tethered to the ground. If you go somewhere, the ride will be tax free because it is considered “transportation.”

Kentucky

Tax Freedom Day – April 11

Sales Tax on Stud Fees: In 2010, Kentucky put a 6 percent sales tax on all stud fees to fund awards to breeders based on their foals’ performances in races, shows or contests.

Louisiana

Tax Freedom Day – April 7

Prepaid Wireless 911 Service Charge: Dealers who sell prepaid cellular phones, prepaid cellular phone cards, or additional units of airtime or minutes must collect a 2 percent prepaid wireless 911 service charge on all retail sales of these items.

Maine

Tax Freedom Day – April 15

Mahogany Quahog (Clam) Tax: Enjoy a good clam bake? Be ready to pay extra in Maine where Mahogany quahog clams are taxed at a rate of $1.20 per bushel.

Maryland

Tax Freedom Day – April 28

Toilet Flush Tax: In Maryland, if you flush too much, you will pay the price. The state “flush” tax is based on water consumptions and doubled to $5 a month in 2012.

Massachusetts

Tax Freedom Day – May 5

Out-of-State Wine or Liquor Permit Fee: Headed to a party in Massachusetts? You’ll need to purchase a special permit just to bring a bring a bottle of wine or liquor that wasn’t purchased within the state.
Michigan

Tax Freedom Day – April 22

HMO Use Tax: If healthcare wasn’t expensive enough already, Michigan has a 6 percent use tax on medical services provided by Medicaid Health Maintenance Organizations (HMOs) and Prepaid Inpatient Health Plans (PIHPs).

Minnesota

Tax Freedom Day – April 30

Fur Tax: Businesses in Minnesota that sell a clothing item made of three times more fur than any other material have to pay a 6.5 percent tax on whatever they make on the sale of the item.

Mississippi

Tax Freedom Day – April 5

Salt Tax: There is a 3 percent severance tax on all salt produced from land or water in Mississippi.

MissourisAbsurdTax

Missouri

Tax Freedom Day – April 12

Single Man Tax: In Missouri, getting married might help you save a buck…literally. Single men between the ages of 21 and 50 are taxed an extra $1 every year.

Montana

Tax Freedom Day – April 17

Livestock Fee: Cows and other livestock in Montana will cost you more than just care and feeding. With every animal comes a fee that goes to the Montana Department of Livestock.

Nebraska

Tax Freedom Day – April 14

Drug Tax Stamp: In Nebraska, all drug dealers must buy a tax stamp to put on all illegal drugs.

Nevada

Tax Freedom Day – April 21

Live Entertainment Tax: There is a 9 percent tax on all live entertainment in Nevada, with a few very specific and notable exceptions. What happens in Vegas, gets taxed in Vegas…unless it is go-go dancing, one of these exceptions.

New Hampshire

Tax Freedom Day – April 22

Excavation (Dirt) Tax:  Moving more that 1,000 cubic yards of dirt requires a notice of intent to excavate  in New Hampshire, meaning it will be taxed at $.02 per cubic yard of earth excavated.

New Jersey

Tax Freedom Day – May 12

Pumpkin Tax: No matter how close to Halloween it is, pumpkins are categorized as a food and thus tax-exempt it New Jersey. However, if the pumpkin is “painted, varnished or cut and sold as decorations,” sales tax applies.

New Mexico

Tax Freedom Day – April 9

Bingo and Raffle Tax:  Odds of winning at bingo? Not great. Odds of getting taxed on the proceeds? Certain – if you’re in New Mexico where there is a 0.5 percent tax on the gross receipts of any game of chance, including bingo and raffles.

NewYorksAbsurdTax

New York

Tax Freedom Day – May 11

Bagel Cutting Tax: In New York, bagel buyers get a little something a extra with their lox and shmear – an 8-cent bagel cutting tax on any bagel that comes sliced or is served to be eaten on the spot.

North Carolina

Tax Freedom Day – April 16

Dog Tax: In some counties in North Carolina, residents are required to list their pets as personal property and pay a pet fee.

North Dakota

Tax Freedom Day – April 26

Musical Composition Performing Tax:   In North Dakota there is a tax on selling and licensing performing rights for music or dramatic-musical compositions. This means tickets for the hot new musical are likely going to be a bit more expensive.

Ohio

Tax Freedom Day – April 19

Replacement Tire Fee:  A new set of tires in Ohio is going to cost you the sticker amount plus an extra $1.00 tax per tire.

Oklahoma

Tax Freedom Day – April 8

Personal Property Tax: Most Americans are used to paying property taxes, but if you live in Oklahoma you don’t just pay tax on your land, but on all tangible personal property.

Oregon

Tax Freedom Day – April 24

Online Cigarette Tax: Oregon places a $.065 tax on each cigarette bought online, which comes out to about  $1.31 per pack of 20. Here’s the catch: you can purchase up to 199 cigarettes in a single shipment without having to pay the tax. If you purchase more than 199, all cigarettes will be subject to the tax.

PennsylvaniasAbsurdTax

Pennsylvania

Tax Freedom Day – April 22

Air Tax: In Pennsylvania, you’ll pay extra for items bought from a compressed air vending machine or a vacuuming vending machine.

Rhode Island

Tax Freedom Day – April 28

Cigarette Tax: Feel like a smoke? Well in Rhode Island you will be subjected to the second highest cigarette tax in the country. At $3.75 a pack, the tax is almost 50 percent of the price of the pack!

South Dakota

Tax Freedom Day – April 8

Special Tax”: South Dakota imposes a “special tax,” which is every bit as unspecific as it sounds.  This tax includes an alcohol occupational tax, cigarette excise tax, and gaming excise tax. It also includes license and registration fees such as coin operated laundry license fees and amusement device registration fees.

South Carolina

Tax Freedom Day – April 11

Arts/Crafts Tax: Artists and crafters are taxed multiple times in South Carolina. First they must obtain retail license for $20 in order to sell their products at shows, and then they must charge and collect a 6 percent state sales and use tax as well as any relevant local sales and use tax.

Tennessee

Tax Freedom Day – April 6

Illegal Drug Tax: In Tennessee, you are expected to pay taxes even while breaking the law.  In 2004, Tennessee instituted the Unauthorized Substances Tax, also known as the “crack tax.” This tax requires anyone possessing illegal drugs to purchase and attach a stamp to the product.

TexasAbsurdTax

Texas

Tax Freedom Day – April 17

Belt Buckles:  There is no tax on clothing in Texas, but unfortunately for Texas cowboys, belt buckles don’t count as clothing, and are subsequently subjected to a state sales tax.

Utah

Tax Freedom Day – April 21

Nudity Sales Tax: In Utah, there is a tax levied on any sexually explicit business when there is a display of nudity of any kind, including merchandise and food.

Vermont

Tax Freedom Day – April 17

Malt Beverage Tax:

If you live in Vermont and you like a strong malt beverage, be prepared to pay double the tax on a malt with 6 percent alcohol or more than you would on a malt of 6 percent alcohol or less.

Virginia:

Tax Freedom Day – April 22

Sheep Tax: Bad news for sheep farmers in Virginia: There is a $0.50 excise tax on every lamb or sheep sold in the state.

Washington

Tax Freedom Day – April 27

Dance Tax: If you like to “bust a move,” you may want to do it at home if you live in the state of Washington.  In the 1960s, a tax was put on any business that offers customers the “opportunity” to dance, such as ballrooms and concert venues. The state legislature repealed the tax in 2013, but the repeal expires in 2017.

West Virginia

Tax Freedom Day – April 11

Sparkler Tax: If you own a business in West Virginia that sells sparklers and/or any “other sparkling devices which emit showers of sparks,” you are required to pay a fee of $15.

Wisconsin

Tax Freedom Day – April 27

Premier Resort Area Tax, Baseball Stadium District Tax, and a Football Stadium District Tax: Wisconsin has sales and use taxes of varying rates based on location. You could face these taxes if you’re purchasing retail items near a football or baseball stadium.

Wyoming

Tax Freedom Day – April 23

Lost Tool Exemption: Prior to Tax Day 2014, tools lost in holes (oil and gas wells) were subject to sales tax.  Now, in construction of an oil or gas well, if a tool is missing or damaged beyond repair, the customer is not charged sales tax for that tool.

Washington, DC

Tax Freedom Day – April 26

To be Healthy or not to be Healthy? Washington, DC offers the perfect excuse to stay home rather than hit the gym. In DC, you are taxed at the rate of 5.75 percent for going to a gym, but D.C. tries to balance out the incentives by charging a six percent tax on sugary drinks.