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O Christmas tree, how lovely are your taxable branches

December 25, 2017

O Christmas Tree, O Christmas Tree
How lovely are thy branches!

Tree no lights_cropped

Our tree. Click here to see a photo of it with lights on.

This is one of my favorite Christmas carols, in part because the Tannenbaum tune is also the one used for the "Maryland, My Maryland," the state song of the place the hubby and I called home for almost two decades.

But it's also a wonderfully lyrical celebration of the Christmas tree tradition. The National Christmas Tree Association says that between 25 million and 30 million real trees are sold across the United States each holiday season.

For most of our married Christmases, we've had an artificial tree. One reason is that I like to put up all our many, many, many decorations early, like before Thanksgiving this year, so that we can enjoy them longer. When something takes so long to install, it needs to be displayed for more than just a month.

The other reason is that, as the above photo of our tree this year shows, we have a lot of large, heavy ornaments and lights. We weren't able to hang many of them on the few occasions we had a live tree because they pulled the limbs down way too low.

But we do get a wreath for indoor display so we can enjoy the wonderful evergreen scent.

Indoor wreath 2017

Trees and taxes: Here in Texas, we pay sales tax on all live holiday greenery just like we do on any artificial seasonal accoutrements. Yeah, you knew that even on Christmas Day there was going to be a tax component.

A handful of states, however, offer some Christmas tree tax relief.

Sales of Christmas trees in Mississippi are sales-tax-free if the fir (or spruce or pine) is grown in the Magnolia State and is harvested or cut from the place where the tree is sold.

Similarly, Arkansas also exempts receipts from the sale of Christmas trees produced on a farm, when it's sold directly by the Christmas tree farmer to a consumer.

However, says Emilie Burnette in a post for BNA's SALT Talk Blog, if the Razorback State holiday tree sale is by an established business located on a farm, then it's taxable. Arkansas also taxes receipts from sales of other trees.

Special treatment for nonprofit tree sales: Every taxpayer knows that facts and circumstances matter when it comes to taxes. That's true for some Christmas tree taxes, too.

Alabama exempts certain sales of Christmas trees by particular organizations from local sales and use taxes. Christmas trees sold from the tree lot of the Mobile Optimist Club, for example, are exempt from that city's local taxes, according to the BNA blog post.

And even if a state does not have an exemption specifically for Christmas trees, some waive the tax when the transaction is done by qualifying nonprofit organizations. This is the case for tree sales by charities in Arizona, Illinois and New York and, to a degree, in Wisconsin.

Tree taxes don't matter: Most folks, however, don't worry about the added tax when they go to pick out their tree. And that's how it should be.

It's just not Christmas without a tree, regardless of whether it's live or artificial. So you just figure the tax into your tree budget.

In our case, and I suspect for many other folks, too, our tree bedecked with all the ornaments we've collected over the years is our best Christmas present of all.

I hope you got the tree (and presents!) you wanted.

Merry Christmas and Happiest of Holidays to All!

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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
  • Good post! Thanks!

  • Texas provides charities 2 one-day sales where they do not have to collect sales tax on items under $5000. Each 24 hr day may be either a point-of-purchase sale or the day the items are delivered. That way a charity can take orders for trees all year and deliver them within one or two 24 hour periods and still be exempt from collecting sales tax.

  • What exactly is a PE Artificial Christmas tree? This is a question we are asked on a regular basis, and with the increase in popularity of this type of tree over recent years, we have written this article to explain the ‘ins and outs’ of Polyethylene better known as PE. This article should go some way to explaining what PE is, the process involved in manufacturing a PE Artificial Christmas tree and the benefits of purchasing a PE Artificial Christmas tree and how they compare to a regular Polyvinyl Chloride (PVC) Christmas trees – happy reading!

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