It’s probably no surprise that a country with a history as colorful and diverse as the United States might levy some unusual taxes. From belt buckles to deer carcasses, there are a lot of oddities that will add to your tax bill, and plenty of unusual deductibles too. Click or scroll through to discover the strangest tax law in each state and DC.
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Alabama: Confederate veterans
The Civil War may have ended in 1865, but it is still a part of Alabama life, if only in tax form. Alabamians are required to pay a Confederate veterans tax, even though the last survivors of the war died decades ago. The tax used to go towards running the Alabama Confederate Hospital, but that closed 80 years ago, so instead the funds go towards maintaining the Confederate Memorial Park in Mountain Creek. The tax reportedly brings in $400,000 in revenue annually, so the park is unsurprisingly one of the best maintained public facilities in the state.
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Alaska: whaling deductions
Alaskan whaling boat captains enjoy a generous $10,000 allowance to write off anything they spend on boat repair or whaling expenses. The only downside to this generous deduction offer is that there has been no whaling in Alaska since around the 1920s and it was made illegal around the world in 1986 (though some indigenous groups recognized by the Alaska Eskimo Whaling Commission have special exemptions).
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Arizona: ice
Temperatures in Arizona frequently soar above 100°F. Luckily, ice cubes are exempt from sales tax if they are destined to be used in mixed drinks. However, blocks of ice, which aren’t easily used in drinks, are taxable, so chilling your living room the old-fashioned way (with a block of ice and a fan) is definitely out of the question.
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Arkansas: tattoos
Residents of Arkansas who are fans of tattoos and piercings might want to travel out of state to get their body art done. That’s because Bill Clinton’s old home state charges a hefty 6% extra sales tax for body art. Even electrolysis is included in this category, so hirsute Arkansans also find themselves in a hairy situation.
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California: vending machine fruit
California is well known for its fruit industry, and you can pick up an apple or orange in any grocery store in the state and you won’t have to pay sales tax. But if you buy that piece of fruit from a vending machine, be prepared to spend more. The Golden State levies a 33% tax on fruit bought from vending machines, but no one knows why.
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Colorado: coffee cup lids
When getting a coffee to go in Colorado you might notice an additional charge on your bill. That’s because coffee cup lids are considered “nonessential packaging” in Colorado, and as such are subject to a 2.9% levy.
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Connecticut: diapers exemption
The average American baby will poop its way through 3,796 diapers before it’s fully potty trained. But, thankfully, Connecticuter parents who used to pay an additional 6.35% sales tax on both disposable and reusable diapers, will be relieved to find that diapers are now exempt from tax, as of July 2018.
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Delaware: corporations
Delaware is home to over half of America’s publicly-traded companies, and it’s not because Delawareans are any more entrepreneurial than the rest of the country. It’s because it has one of the lowest rates of corporation tax, at 8.7%.
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District of Columbia: healthy living
If you’re trying to lead a healthy lifestyle in the capital, you might get some mixed signals from the District of Columbia local government. While it has adopted a controversial sugar tax (5.75%) in a bid to halt the spread of obesity, it also taxes gyms at the same rate. Go figure.
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Florida: rent-a-cow loophole
Property developers in the Sunshine State have been known to take advantage of a tax loophole designed to protect farmland. The so-called greenbelt statute taxes farmland at an exceptionally low rate, in order to protect it. Property developers or big corporations have been known to rent cows and fence them in some out of the way corner of the property to benefit from the lower tax rate. The law dates back to 1959 when orange groves were being paved over to make way for strip-malls, but there is no sensible explanation as to why it still stands today.
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Georgia: cigars
If you are a fan of Cubans, you might want to purchase them somewhere other than Georgia. That’s because the Peach State charges a whopping 23% sales tax on them.
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Hawaii: exceptional trees
Hawaii prides itself on its lush landscape and natural beauty. It should therefore come as no surprise that the state has enacted several laws designed to protect its natural beauty. That’s why Hawaiian homeowners who have one of more ‘exceptional trees’ in their property have the right to deduct up to $3,000 per tree for any cost associated with the maintenance and well-being of the tree. In case you’re wondering, a qualified local arborist advisory committee must certify your tree as exceptional before you can file deductions.
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Idaho: cloud computing
Though the cloud is by definition an intangible asset, Idaho tried to tax it. Before 2014 any downloads of cloud-based software or downloadable entertainment were charged a sales tax. Now only eBooks and downloadable movies and music are subject to the tax, and that is only if they include a permanent license to the work, so streaming services are exempt.
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Illinois: candy
Those with a sweet tooth might have to be a little more selective when it comes to buying sugary treats in Illinois. That’s because some types of candy can incur up to an additional 6.25% sales tax. However, any ‘candy’ that contains flour in its ingredients list and doesn’t need to be refrigerated, such as Twix, escapes the 6.25% tax and has a levy of 1% instead. But candy that doesn’t contain flour, and is refrigerated is subject to the higher rate. The state also taxes soft drinks and brewed teas and coffees at the rate of 6.25% as they are for immediate consumption.
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Indiana: snacks
Remember Pixy Sticks? These public health time-bombs are not taxed in Indiana and children can continue to indulge their sweet teeth unshackled by pesky state legislature. Cakes and baked goods, marshmallow crème (but not marshmallows), as well as chips and pretzels are all tax-free too.
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Iowa: drug stamp requirements
Marijuana for recreational use remains illegal in Iowa. However, the state requires that anyone selling seven or more grams or an entire plant affix a state tax stamp to the product permanently, and pay a levy. The tax has been a useful tool to increase the charges and possible penalties available when persecuting drug dealers. Marijuana is not completely banned in Iowa. The state has a medical maruijuana program, which in late June saw the cap on THC levels and the number of medical conditions able to access the program increase.
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Kansas: untethered hot-air balloons
Kansas has emerged as something of a hotspot for hot-air ballooning, and it’s not because of its scenic landscape or adventurous locals. It’s because Kansas taxes “any place providing amusement, entertainment or recreation services”, including hot-air balloons, but that law contradicts a federal law which bans state governments from imposing fees on airlines or air carriers. That means Kansas had to create a tax exemption for hot-air balloons when they are not tethered to the ground (and therefore flying somewhere) as they qualify as an air carrier, but if they are tied to the ground and stay tied, they are classed as recreation because their occupants aren’t going anywhere.
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Kentucky: studs
Kentucky is a rural state, and as such agribusiness is a major employer in area. The equine industry is huge and contributes billions to the state’s economy through racing, buying and selling, tourism and breeding. A major portion of this income is derived from the 6% sales tax the state of Kentucky slaps on thoroughbred stud breeding. So if you have a stud and would love to capitalize on its assets, it’ll cost you, but the cash raised goes to multiple funds used to incentivize horse breeding operations.
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Louisiana: personal airplanes
Airplane enthusiasts might find that Louisiana is a bit of a haven for their hobby. Not only are (small) personal airplanes tax exempt, but painting and decorating aircraft is also not subject to sales tax. The caveat is that it must be a complete paint job, not just a touch-up, to qualify for the exemption. So if you want to give your private plane a leopard-print makeover, you’re in luck.
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Maine: wild blueberries
Blueberries have surged in popularity in recent years since being classified as a so-called ‘superfood’. The state of Maine produces 99% of the country’s wild blueberries all on its own. Mainers are so fond of these little blue gems that they’re the official state berry. It’s therefore not a complete surprise that the little berries are taxed. The state collects 1.5 cents per lb of wild unprocessed blueberries sold in Maine. It is for a good cause though, as the funds go towards research into the promotion and conservation of the wild blueberry industry.
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Maryland: toilet flushes
Since 2004 residents of Maryland have been paying one steep tax for their number twos. Residents of the state are charged an annual $30 fee for their sewage processing. The so-called Flush Tax raises $60 to $70 million a year to upgrade the state’s major sewage treatment plants, with the specific aim to reduce the discharge of pollutants into Chesapeake Bay and other significant waterways.
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Massachusetts: fun
Bay Staters are notoriously averse to paying tax – the Boston Tea Party was of course a massive protest against paying taxes. It’s perhaps a bit surprising then that the modern-day residents of Massachusetts put up with the ominous sounding Fun Tax. The state collects a 5% tax on the purchase of tickets for “any water or land based sightseeing tourist venue” operating in the state.
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Michigan: takeout
Many of us resort to the takeout menu drawer after a long day at work, even though cooking at home might be healthier. In Michigan, cooking might actually also be cheaper, as the state charges sales tax on any ‘to-go’ item or pre-packaged food.
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Minnesota: fur
Minnesota winters can be cold and bitter, and locals can’t rely on furs to keep them warm. That’s because of the state’s tax on fur clothing. If an item of clothing is comprised mainly of fur, it incurs an additional 6.5% sales tax. Fur cuffs and collars on coats are exempt though.
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Mississippi: cow exemption
Around 400,000 head of cattle are raised, slaughtered and sold in Mississippi each year. The local government is missing a trick by making any sale of cattle or livestock tax-exempt.
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Missouri: single men
Being single often comes with some financial price tags: no one to split the appetizer platter with, for example. But in Missouri, single men face an additional charge: any unwed male between the ages of 21 and 50 must pay a $1 annual tax. The law was enacted in 1820, presumably to encourage more men to marry, and it would have been the equivalent of $20 today at the time.
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Montana: medical marijuana
Marijuana has been legal in Montana for medicinal purposes since 2004, but despite the state offering tax credits towards other medical expenses such as insulin, the license does not extend to recreational marijuana. Even patients with a valid medical marijuana card must pay tax when buying or growing the drug. The state generated $1.8 million from the tax in the first 13 months of the tax, which started in July 2017. The tax rate currently sits at 4%.
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Nebraska: drugs
Just to be clear: drugs are illegal in Nebraska. Which makes this particular tax law completely baffling: dealers must pay a tax of $100 per ounce of marijuana (rough street value $250) or any other controlled substances, immediately upon taking possession of the substances. Unsurprisingly, experts have concluded that, in practice, this tax has been difficult to enforce.
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Nevada: loud music
Nevada is home to Las Vegas, but curiously businesses in the state are charged a sales levy of 5% and 10% on tickets, food, drink, and any merchandise they sell when there’s live entertainment on. There is one important caveat though: the entertainment must be loud. Bars with a discreet piano player in the corner are exempt from the tax. But knowing what Vegas is famous for, Nevada must be making a fortune in tax revenues.
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New Hampshire: property
Lucky New Hampshirites don’t have to pay any income tax or sales tax, which is highly unusual. However, even small states need dollars to keep running, so the state charges really high property taxes, currently the third highest in the country. It just proves that nothing in life is certain apart from taxes, even if you thought you’d escaped them by moving to New Hampshire.
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New Jersey: pumpkins
Over 40% of all Americans will carve at least one pumpkin at Halloween. But because so many see this seasonal tradition is nothing but a bit of fun, New Jersey state officials thought it should be taxed. New Jersey employs a sales tax exemption for food and groceries, and tax officials thought that, while the pumpkins could be considered food, they were really home decorations and should be subject to sales tax. If you can prove your pumpkin is for eating rather than carving, you can have it tax free.
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New Mexico: old-age exemption
Many of us aspire to living long, healthy lives, but residents of New Mexico have an additional reason to stay alive for as many years as possible: tax breaks. New Mexicans over the age of 100 are exempt from having to file income tax, regardless of whether they have an income or not.
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New York: sliced bagels
New Yorkers are famously partial to picking up a nice bagel for breakfast on their way to work, but if they knew how much tax they pay for it, they would probably switch to cereal. Any bagel that has been sliced, toasted, covered with toppings or filled in any way is subject to an 8.875% sales tax. But there’s a tax hack available: if the bagel is whole you don’t have to pay the levy.
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North Carolina: pets
Cat- and dog-loving residents of Durham, North Carolina have faced a pet tax since 2009. They are considered personal property and so incur a levy. An unspayed cat or dog costs its owner $75 annually, but a neutered pup incurs fees of just $10.
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North Dakota: oil exemptions
In 2006 an oil boom began in North Dakota, and energy firms rushed to drill there. The state decided to cash in on the drilling frenzy with a 5% tax to the gross value of all oil produced at a North Dakota well. Native American holdings drilling within reservation boundaries are exempt, however reservation lands are subject to a number of federal guidelines that prevent Native Americans from drilling there. The area’s oil drilling has become more and more controversial in recent years, and this summer a judge has ordered the Dakota Access Pipeline to be closed for an environmental review.
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Ohio: human hair
If you are in the market for a human kidney in Ohio, you may be in luck. That’s because the Buckeye State doesn’t tax human organs, bones, blood, or other parts as long as the parts are for transfusing or transplanting. However, a regular sales tax does apply to human hair and any animal parts for transplantation and implantation.
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Oklahoma: furniture
Property tax is common and most states will charge a levy on your house or apartment. But Oklahoma takes this one step further and taxes any personal possessions, even those that don’t generate an income or go up in value such as furniture. This tangible property tax applies to everything you own really, apart from agricultural land.
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Oregon: marijuana
Oregon is one of a handful of states that has legalized the recreational or medical use of marijuana. But recreational users are in for a rude awakening: Oregon enforces a 17% sales tax on the herb, with the option given to municipalities to add on an additional 3%. If the tax was meant as a deterrent, it didn’t work. Oregon’s recreational marijuana tax revenue reached $102 million in 2019, 24.2% higher than the taxes collected the year before.
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Pennsylvania: air
When it comes to redundant taxes, Pennsylvania might take the cake. That’s because it taxes air. Anything that comes out of a compressed air vending machine or vacuuming vending machine is subject to a sales and use tax. In other words: the Coal State taxes air.
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Rhode Island: intimate acts
In 1971 Rhode Island tried to tax any and all intimate acts performed within state borders. Democratic legislator Bernard Gladstone though it was a great idea to institute a $2 per act levy to raise some more cash for the state. Yet the tax was voluntary, never made any money, and offenders were never persecuted for evasion.
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South Carolina: deer carcass exemption
In South Carolina being charitable can lead to less tax. Every deer carcass prepared by a licensed meat packer, butcher or processing plant donated to charity results in a $50 tax rebate. The ‘donation’ will be used to feed the hungry, but only deer carcasses are eligible, so don’t think about trying to donate pork.
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South Dakota: firefighter exemption
Volunteer firefighters and ambulance staff have a quite a sweet tax deal in South Dakota: they don’t have to pay any sales tax anywhere in the state. As South Dakota is one of seven states that don’t charge any income tax, the volunteer exemption would bring you as close to living tax free (and within the law) as it’s possible to be.
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Tennessee: litigation
If the process of being sued of suing someone else wasn’t traumatic enough, the state of Tennessee has decided to add an extra sting: a $25 levy on residents involved in criminal and civil court proceedings. Juveniles are exempt though.
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Texas: belt buckles
Cowboy fashion is big in Texas, it’s therefore not a surprise that cowboy boots are tax exempt, along with belts. Belt buckles, however, are not. And what is a cowboy belt without a buckle? If you are in the market for a full Montie Montana look you’ll have to pay extra sales tax for that one item.
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Utah: adult entertainment
This Utah law had originally targeted all forms of adult entertainment, including strip clubs and escort services – and all food, drinks and merchandising sold in these particular establishments. However, Utahans did not get behind that law. At all! After a lot of wrangling, the state was forced to back down and now some strip clubs and escort services are no longer subject to the tax.
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Vermont: buskers
Magicians, mimes, and other street performers might not be the demographic with the deepest pockets, but that doesn’t stop the Vermont government from reserving the right to charge them some extra tax. In Burlington, the state’s largest city, can tax “the exhibition of common showmen, circuses, menageries, carnivals, and shows of every kind, and all plays, athletic contests, exhibitions, or entertainments for money.”
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Virginia: sheep
Just as Mainers are proud of their blueberries, Virginians are proud of their sheep. But unlike Maine’s thriving wild blueberry market, Virginia seems to only do a modest sheep trade. But that doesn’t stop local government from levying a $0.50 tax on every sheep or ewe sold in the state. The sheep tax raises only around $8,000 a year. This goes directly to the Sheep Industry Board, which uses the cash to run a program for the “promotion and economic development of the sheep industry”, so it’s all for a good cause then, sort of.
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Washington: electric and hybrid cars
Many electric and hybrid car drivers are attracted to their environmentally-friendly credentials and the fact that they can be cheaper to run than gas vehicles. Well not in Washington state, where any electric or hybrid car driver must pay an $150 annual fee towards improving the highways and road systems, as well as a further $75 introduced in September 2019 to pay for electric car charging stations. However, it’s not all bad news: the state waives sales tax for those buying new plug-in cars worth $45,000 or less, and used plug-in cars worth $30,000 or less.
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West Virginia: sparklers
Fourth of July celebrations in West Virginia can be a bit of a dud, as fireworks are completely banned in the state. Sparklers, however, are allowed – though they come with a tax price tag. Sellers of sparklers and other novelties that emit showers, sparks or noise must pay an additional fee on top of the state’s 6% sales tax.
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Wisconsin: the internet
Until July last year, Internet-lovers might have wanted to avoid Wisconsin, as it was one of the only states to tax internet access. How much each household paid depended on the type of connection they had, with dial-up being cheaper than broadband, but now residents can surf without worrying about their tax bill.
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