17 Craziest Sales Tax Facts [Tweetable]

State sales tax laws can get downright kooky. Yet even when these laws address complex and seemingly quirky issues, like the taxability of sliced versus unsliced bagels, the onus remains on the business to follow the rules. In order to alert you to some of the stranger state sales tax stories and laws–and hopefully to make you smile–we have gathered a list of some of the craziest state sales tax laws ever.

Each is presented as a compact fact with a Tweetable link. Share your favorites on Twitter. Just don’t change the facts :) Enjoy! And if we missed any, let us know in the comments.


Tax Facts: Grab Bag



  1. Cars sold to blind veterans in Arkansas are exempt from sales and use tax #lifeexpectancy
    source: Arkansas legal code


  2. Pennsylvania DOR ruled that air from the atmosphere was taxable. Breathe easy! It was overruled
    source: Pennsylvania court ruling


  3. In Alabama prescription drugs are tax exempt for humans but not for animals #sorryfido
    source: taxrates.com


  4. Clothing is tax exempt in Pennsylvania, but not formal wear like opera capes and wing collars
    source: Pennsylvania legal code


  5. Colorado: you can have same ZIP code but different sales tax rate as the house next door #grassisgreener
    source: salestax.avalara.com


  6. Hawaii: expenses for care of “exceptional” trees are exempt from sales tax, up to 3K #moneygrowsontrees
    source: Hawaii government


Tax Facts: Food and Drink



  1. Colorado exempts cups from sales tax, but not straws and lids #thelaststraw
    source: Colorado government


  2. Maine has a “blueberry tax” of ¾ cents per pound of fresh wild blue berries #berrytaxing
    source: Maine legislature


  3. Texas: Until 2003, purchases of 5 donuts or less were tax exempt, but 6 or more were not #weightwatchers
    source: Texas Comptroller (link 1, link 2)


  4. California allows the military to purchase alcohol without paying sales tax #draftbeer
    source: California legal code (section 32177.5)


  5. In Indiana marshmallow crème is exempt from sales tax, but marshmallows are not #cremedelacreme
    source: avalara.com


  6. If you order a bagel to go in New York it’s tax free, unless it is sliced for you #governmentcuts
    source: New York Division of Taxation


Tax Facts: Crime and Punishment



  1. California posts the top 500 sales tax delinquents on their website to shame them into compliance
    source: taxrates.com


  2. Maryland had a “fake tax auditor” problem #mantiteo
    source: Maryland Comptroller


  3. New Hampshire doesn’t have sales tax. This didn’t stop scammers from selling fake “sales tax certificates”
    source: taxrates.com


  4. Texas business uses the state’s own tax rate calculator, gets wrong rate #doasidonotasisay
    source: taxrates.com


  5. Twenty-one states require Illegal drug dealers to pay sales tax on their illegal drugs
    source: norml.org


Special thanks to the knowledgable accounting professionals of the LinkedIn group, Sales Tax Connection, for their crazy tax facts suggestions (many of which made it into this list).

7 Responses to “17 Craziest Sales Tax Facts [Tweetable]”

  1. Derek Hoffman

    Will – you saved the best for last. Bravo!!

    • Will Frei

      Derek – haha! Thanks :) I wonder if there are any cases of illegal drug dealers actually paying tax on their drugs (via drug stamps). I definitely know that states have made some pay the tax when they get caught.

  2. Miranda Landry

    Love it! This is totally worth sharing!

  3. Joe Noll

    This was a great read to enjoy with my coffee this morning. Thanks Will!

  4. Will Frei

    Thanks Miranda and Joe! It was a fun one to put together. Among other things, it’s a good reminder that sales tax rules vary like crazy from one state to the next.

  5. George Smith

    Hawaii sales tax is cumulative. Each time wholesale goods are handled there is a small transaction sales tax added, from landing on the dock or airport through stocking it on the store shelf. That tax is then added to the value of the goods, so it’s cost+tax+tax+tax, etc. until the final register where is is again sale price+tax. Services are also ‘sales’ taxed.

    Welcome to the Kingdom of Hawaii, a third world country masquerading as a state. Aloooooo-HA!

  6. Tessa Quigley

    Will! This is amazing! What great content to use in conversations! You really went above and beyond with this one. I am still laughing.

Comments are closed.