The following information is provided by Graphiq and Credio.
by Ben Taylor
With tax season comes a parade of obscure tax laws — some complicated, others just plain bizarre. The tax code covers almost any person, scenario or object you can imagine. Take bows and arrows, for example. By decree of Uncle Sam, bow manufacturers must pay an 11 percent tax on any bow with a “peak draw weight of 30 pounds or more.” And if the arrow shafts are longer than 18 inches? That’s an additional fee. It’s all part of a a federal tax code detailed in about 2,700 pages of statutes.
Put the federal tax rules next to state rules, however, and suddenly the national regulations become sane and sensible.
The team at Credio, a personal finance data site covering investment advisors, consumers banks and more, set out to find the weirdest, strangest tax law in each state, with an emphasis on the surprising numbers behind the laws. In one state, for example, people over 100 years old are exempt from income taxes. In another, bachelors between 21 and 50 must pay $1 per year.
The Credio team also ordered the list from lowest to highest median income, and noted each state’s tax rate at that level of income.
With that said, here are the weirdest tax laws in each state.
#50. Mississippi
Median Income: $35,521
Tax Rate for Median Income: 4.00%
Retail sales of livestock are exempt from the state sales tax.
#49. West Virginia
Median Income: $39,552
Tax Rate for Median Income: 4.50%
West Virginia requires stores that sell sparklers and party poppers to pay $15 for a “Certificate to Sell Sparklers and Novelties.”
#48. Alabama
Median Income: $42,278
Tax Rate for Median Income: 5.00%
Residents still pay a Confederate veterans tax, despite the fact that all Civil War veterans are long dead. Today, the tax supports the Confederate Memorial Park.
#47. Louisiana
Median Income: $42,406
Tax Rate for Median Income: 4.00%
Every September, Louisiana enjoys a Second Amendment sales tax holiday. Hunting supplies, ammunition and firearms are all exempt from state and local sales taxes.
#46. Kentucky
Median Income: $42,786
Tax Rate for Median Income: 5.80%
Kentucky requires a 6 percent sales tax on thoroughbred stud fees. The state spreads the proceeds across multiple funds used to incentivize horse breeding operations.
#45. Tennessee
Median Income: $43,716
Tax Rate for Median Income: 6.00%
Feed for livestock is exempt from the state’s 7 percent sales tax.
#44. Arkansas
Median Income: $44,922
Tax Rate for Median Income: 7.00%
Arkansas charges a 6 percent tax on any body piercings, tattoos, or electrolysis.
#43. South Carolina
Median Income: $44,929
Tax Rate for Median Income: 7.00%
Any meat packer or butcher in the state can get a $50 rebate by donating a deer carcass to a charity, which will be used to feed the hungry.
#42. Florida
Median Income: $46,140
Tax Rate for Median Income: 0.00%
Many developers take advantage of Florida’s “greenbelt law” by temporarily leasing land being developed to cattle ranchers. They will then receive “agricultural use” tax breaks in a tax strategy that’s come to be known as “rent-a-cow.”
#41. New Mexico
Median Income: $46,686
Tax Rate for Median Income: 4.90%
Due to the fact that many retirees choose to settle down there, New Mexico exempts the income of persons at least 100 years old from income tax.
#40. North Carolina
Median Income: $46,784
Tax Rate for Median Income: 5.75%
A “white goods disposal tax” of $3.00 is collected for the disposal of certain appliances, which includes refrigerators, stoves and water heaters.
#39. Oklahoma
Median Income: $47,199
Tax Rate for Median Income: 5.25%
Unlike many states, Oklahoma taxes groceries in full. That said, the state offers credits to offset food taxes for some of the population.
#38. Indiana
Median Income: $48,060
Tax Rate for Median Income: 3.30%
Groceries are generally excluded from sales tax and defined as “food that is only cut, repackaged or pasteurized by the seller” such as eggs, fish, meat and poultry that require cooking before consumption.
#37. Arizona
Median Income: $49,254
Tax Rate for Median Income: 3.36%
Ice cubes are exempt from sales tax because they are used in mixed drinks. Blocks of ice, however, are taxable.
#36. Georgia
Median Income: $49,555
Tax Rate for Median Income: 6.00%
Georgia places a 23 percent tax on the wholesale price of cigars.
#35. Ohio
Median Income: $49,644
Tax Rate for Median Income: 3.70%
Audiovisual products (such as movies), audio products (such as songs), and books delivered electronically will now be taxed. This includes services like Netflix and Hulu, as well as Kindle ebooks.
#34. Nevada
Median Income: $49,875
Tax Rate for Median Income: 0.00%
If an artist develops original art for a customer under a contract, sales tax does not apply. The transaction counts as a “professional service.” The state also gives out a deck of cards for free to anyone who files a tax return.
#33. Montana
Median Income: $51,102
Tax Rate for Median Income: 6.90%
Residents can receive a 35 percent rebate on renewable energy installation in the form of tax credits.
#32. Maine
Median Income: $51,710
Tax Rate for Median Income: 7.95%
Maine charges a “Blueberry Tax” of 1.5 cents per pound of wild blueberries. This additional cost is usually passed on to consumers.
#31. Michigan
Median Income: $52,005
Tax Rate for Median Income: 4.25%
Michigan charges sales tax on prepackaged food items sold at “to-go” restaurants.
#30. South Dakota
Median Income: $53,053
Tax Rate for Median Income: 0.00%
All sales of products and services to city or volunteer fire and ambulance departments are exempt from sales taxes.
#29. Idaho
Median Income: $53,438
Tax Rate for Median Income: 7.40%
A part-time resident (such as a “snowbird“) must file a tax return with Idaho if their gross income while a resident is more than $2,500.
#28. Kansas
Median Income: $53,444
Tax Rate for Median Income: 4.60%
The state doesn’t charge sales tax for untethered hot air balloon rides but does for balloons tethered to the ground during the ride.
#27. Texas
Median Income: $53,875
Tax Rate for Median Income: 0.00%
Belts sold in Texas are tax exempt, but belt buckles are not. Some cowboy boots and hiking boots are also exempt from the state sales tax.
#26. New York
Median Income: $54,310
Tax Rate for Median Income: 6.45%
The sale of whole bagels in New York isn’t subject to sales tax. But add on the 8.875 percent tax if you get it sliced. The bagel then falls under the “processed foods” category.
#25. Illinois
Median Income: $54,916
Tax Rate for Median Income: 3.75%
Candy made without flour, such as Twix, is not taxed. Snickers & M&Ms do include flour, triggering an additional 5 percent tax as a result.
#24. Pennsylvania
Median Income: $55,173
Tax Rate for Median Income: 3.07%
PA adds an additional 18 percent “Flood Tax” for every bottle of alcohol sold. Originally signed into law to help rebuild Johnstown after the devastating flood of 1936, the law remains in effect to this today.
#23. Wyoming
Median Income: $55,690
Tax Rate for Median Income: 0.00%
When a tool is lost down a drilling hole or damaged beyond repair during the pre-production phase of the oil well, and the customer is required to pay for the tool, the charge for the tool lost or damaged will not be subject to sales tax.
#22. Missouri
Median Income: $56,630
Tax Rate for Median Income: 6.00%
Single men 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.
#21. Nebraska
Median Income: $56,870
Tax Rate for Median Income: 6.84%
A dealer must pay a drug tax of $100 per ounce of marijuana or other controlled substances to the Department of Revenue immediately upon possession. In practice, however, the tax has been difficult to enforce.
#20. Delaware
Median Income: $57,522
Tax Rate for Median Income: 5.55%
Given the low 8.7 percent flat tax on corporations, Delaware is home to about half of the country’s publicly traded companies.
#19. Iowa
Median Income: $57,810
Tax Rate for Median Income: 7.92%
The control units that operate catheters are exempt from Iowa taxes.
#18. Wisconsin
Median Income: $58,080
Tax Rate for Median Income: 6.27%
Wisconsin charges residents for “internet access services” if the customer’s “place of primary use” is in the state. Put another way, any internet service over $50 per month is taxable.
#17. Rhode Island
Median Income: $58,633
Tax Rate for Median Income: 3.75%
Rhode Island includes emojis on the state’s personal income tax form.
#16. Oregon
Median Income: $58,875
Tax Rate for Median Income: 9.00%
Recreational marijuana sold in medical dispensaries is now subject to a 25 percent sales tax.
#15. Washington
Median Income: $59,068
Tax Rate for Median Income: 0.00%
Washington charges an annual registration renewal fee of $100 for electric plug-in car owners, though certain less expensive models are exempt.
#14. California
Median Income: $60,487
Tax Rate for Median Income: 9.30%
Fresh fruit specifically bought from a vending machine is taxable at 33 percent in California, according to analysis in “Federal Tax Research” by Sawyers, Raabe, et. al.
#13. Vermont
Median Income: $60,708
Tax Rate for Median Income: 6.80%
Soft drinks and most beverages with natural or artificial sweeteners are taxable at 6 percent, including maple syrup.
#12. North Dakota
Median Income: $60,730
Tax Rate for Median Income: 2.27%
North Dakota imposes a 5 percent tax to the gross value of all oil produced at a well. That said, the tax does not apply to oil produced by an American Indian holding within reservation boundaries.
#11. Colorado
Median Income: $60,940
Tax Rate for Median Income: 4.63%
Coffee cup lids — but not the coffee cup itself — are considered “nonessential packaging” and are taxed at 2.9 percent.
#10. Massachusetts
Median Income: $63,151
Tax Rate for Median Income: 5.15%
Boston requires a 5 percent tax on the purchase of tickets for “any water or land based sightseeing tourist venue” operating in Boston.
#9. Utah
Median Income: $63,383
Tax Rate for Median Income: 5.00%
Since 2004, Utah has charged a 10 percent tax on escort services and strip clubs.
#8. New Jersey
Median Income: $65,243
Tax Rate for Median Income: 5.53%
Pumpkins sold as decorations are subject to sales tax. If a customer actually plans to consume the pumpkin, however, the sale is tax-free.
#7. Virginia
Median Income: $66,155
Tax Rate for Median Income: 6.27%
During Virginia’s Tax Free Holiday Week, fur coats, hurricane preparedness supplies and insole inserts for shoes are exempt from sales tax if they cost less than $100.
#6. Minnesota
Median Income: $67,244
Tax Rate for Median Income: 7.05%
Clothing is exempt from Minnesota’s sales tax, except for fur and sports clothing. That said, snowmobile attire, karate uniforms, and bowling shirts and shoes are nontaxable.
#5. Alaska
Median Income: $67,629
Tax Rate for Median Income: 0.00%
Alaska is the only state that does not collect state sales tax or levy an individual income tax. To finance state operations, Alaska depends primarily on petroleum revenues. (Individual localities are still allowed to charge their own sales taxes.)
#4. Connecticut
Median Income: $70,161
Tax Rate for Median Income: 5.50%
Children’s disposable and reusable diapers are considered clothing and, as a result, are subject to a 6.35 percent sales tax.
#3. Hawaii
Median Income: $71,223
Tax Rate for Median Income: 8.25%
Hawaii residents can claim up to $3,000 in personal income tax deductions for expenses related to maintaining “exceptional” trees on private property.
#2. New Hampshire
Median Income: $73,397
Tax Rate for Median Income: 5.00%
New Hampshire’s 5 percent flat rate income tax only applies to interest and dividend income. The state relies heavily on property taxes for the majority of its income, and it has one of the highest property taxes in the country.
#1. Maryland
Median Income: $76,165
Tax Rate for Median Income: 4.75%
Homeowners using a septic system in Maryland pay a fee of $60 a year. The money is put toward the Bay Restoration Fund to reduce pollution in the Chesapeake Bay.
