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Does your state have unusual, confusing tax laws? Probably

August 19, 2015

All of us have to deal with the crazy that's the federal Internal Revenue Code.

But on top of that, we also have to slog through the intricacies of our individual state tax laws. This applies to everyone, because 99.9 percent* of the time, we face some sort of state or local income and/or sales tax. 

Texas belt buckle
Showy buckles are part of Texas' unofficial dress code. But if they are sold separately from belts, they are not considered tax-free clothing during Texas' tax holiday. Go figure.

And some of those tax laws are whack, or to be more precise, totally out of whack.

Or are they?

In a post at Stateline, the Pew Charitable Trust's blog that looks at state issues, Elaine S. Povich notes that the various tax code anomalies "flummox consumers and retailers and drive state tax departments to issue complicated rulings — all in the name of clarifying things that on the surface seem incongruous."

Amen, sister!

The reasons behind odd tax laws: But wait, says Povich, when you dig deeper, these weird tax laws make (at least some) sense.

Really? Really. Sort of.

Povich explains why Maine taxes blueberries, one of its most famous food items, if the fruit comes off a wild bush, but not if the tasty berries are cultivated. It has to do with raising money to promote wild blueberry sales and funding research and educational programs about the fruit.

Then there are New York's famous bagels, which are taxed differently depending on whether they are sold as a whole roll or sliced and topped with traditional lox and cream cheese. The difference, notes Povich, is not that the chewy rolls are sliced, but rather that when they are and are served with toppings, they are ready-to-eat foodstuffs.

All belt, no buckle: And here in Texas, no cowboy would feel properly dressed without his flashy belt buckle.

But those big buckles are not considered clothing, at least not when it comes to being sales tax-free during the Lone Star State's annual back-to-school tax holiday. When that buckle is bought separately, writes Povich, it essentially is an accessory, similar to a piece of jewelry.

I know some cowboys who would disagree, but for now they're stuck with the state's tax differentiation.

Povich offers some more goofy state tax situations — varying tax treatment of hot air balloons in Kansas, home of The Wizard of Oz, are among them — in her piece. Check it out.

You also can find interesting state tax tidbits here on the ol' blog.

Does your state have a tax law that you find incredibly strange, annoying or unfathomable? Sure it does! Let us know in the comments section.

Remember, tax misery loves company!

*Alaska is the only state that does not collect a state sales tax or an individual income tax. Some of Alaska cities and other local jurisdictions, however, do levy sales taxes.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • I’m in NY with bagel thing. Just dont ask for butter or cream cheese and you’re ok. When I used to teach Federal Tax I, I would read an article to the students about the crazy sales and use tax laws that exist in this country. There may be good reasons for these rules, but they are still crazy.

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