In my office, in addition to sales tax, we handle bottle deposits for some of our clients. The first thought that comes to my mind when I think of bottle deposits is the massive can collections of broke college students at UCSB and UCLA when I lived in California. Bottle deposits are charged for drinks in glass, plastic, or aluminum containers at the time of purchase and can be collected by the consumer upon return, which encourages recycling and discourages littering. In this way, a few states incentivize environmentally conscious choices and help industrious kids earn back some of their beer money.

Laws like this manage to aid specific agendas without mandating action. As we’ve seen with increased taxes on items like cigarettes, alcohol, and, in some places, firearms, sales tax is another tool that can be used to influence social policy and individual decisions in this way. With sustainability being one of the bigger issues facing our country today, are there rules in sales tax that provide the same sort of nudge as the bottle deposit system?

In Alabama*, Mississippi, and Vermont, food producing seeds are exempt from sales tax. In the long run, growing your own food not only saves money on the initial cost, but it saves fossil fuels (for transport), trees (for packaging), and the pain of a trip to the grocery store.

Exemptions like this most likely find their roots in agriculture, but they’re finding relevance with a new audience as sustainable living comes more into focus. While the first job of sales tax is to provide revenue for a state’s infrastructure, it seems plausible that we could look forward to tax changes written with sustainability in mind. Just think of how federal income tax supports various environmentally conscious household modifications with deductions. Sales tax has proven to be a force with potential to extend far beyond the register.

*Title 2, Chapter 26

photo credit: OhKyleL via photopin cc