Cutting the Tax out of New York Christmas Trees – Wacky Tax Wednesday

How far are you willing to drive for the perfect Christmas tree?

The Griswold family trekked deep into the wilderness to find their perfect tree, which then wreaked havoc on their home. Mr. Griswold turns every situation up to 11, but families all across the nation have their own calamitous Christmas tree tales: The year the fully loaded tree fell over; the year of the Charlie Brown Christmas tree; cursing while untangling, checking, stringing and restringing the lights (an annual tradition). Memories like these help make each family’s Christmas lore unique.

Every state in the country produces Christmas trees, but the top honors go to Oregon for number of acres in production, number of trees harvested, and number of operations with sales. North Carolina takes second in all categories. New York makes each list’s top 10 (numbers from 2012):

But being in the top 10 isn’t enough for some New Yorkers. Nothing short of Christmas tree domination will do for Senator Rich Funke of the 55th District (home to 26 of the state’s 875 retail Christmas tree farms). And the path to industry domination includes a Christmas tree sales tax holiday.

Ho Ho Ho

To celebrate the 2015 holiday season, Sen. Funke is launching a campaign to create an evergreen sales tax holiday. If he should succeed, Christmas trees, garlands and wreaths would be exempt from New York state sales tax during the newly created Go Green Weekend.

As explained by Sen. Funke, “Go Green Weekend would level the playing field for farmers and consumers alike by creating a state-wide, tax-free holiday on the sale of fresh trees, wreaths, and garland each year. This legislation, combined with our support for an innovative new marketing campaign, would help make New York State our nation’s capital for fresh Christmas tree shopping.” Ambitious, given the numbers. Oregon harvested 6,172,062 more trees than New York in 2012.

The senator announced his plan at Woody Acres Christmas tree farm. But this is about business, not holiday spirit. New York’s 875 Christmas tree farms on close to 19,000 acres have a total annual economic impact of roughly $14.7 million. According to the senator’s website, “Sales of New York grown Christmas trees declined 66% between 2002 and 2012, punctuating the need for local farms to be afforded a level playing field when competing against artificial trees and out-of-state farms.” The sales tax holiday would “encourage people to fill their homes with these fresh evergreen products and in turn… help support the agribusiness owners who work so hard to grow them.”

A special sort of holiday

A sales tax holiday could be just what New York evergreen-producers need. Who doesn’t like a break from sales tax? It feels special, like a holiday.

On the other hand, one weekend-long sales tax holiday may not convince consumers of artificial trees to switch to fresh evergreens. I can’t imagine most people purchase artificial over fresh-cut because of sales tax, particularly given that both are generally subject to sales tax in New York. The two types of trees simply appeal to different markets.

Furthermore, Christmas trees are subject to sales tax in many states, including New York’s neighbors Ohio, Pennsylvania and Vermont. As it stands now, New Yorkers wishing to avoid sales tax on a fresh-cut Christmas tree have to drive quite a distance — to New Hampshire, for instance. Pre-cut Christmas trees sold in New York are subject to tax whether they come from Oregon, North Carolina, or the next county over.

Put it in a box

However, the proposed sales tax holiday could appeal to consumers who purchase evergreen products remotely, from a catalog or Internet website, thereby avoiding New York sales tax (although use tax still applies). Perhaps Sen. Funke could indeed “level the tree farm” with his proposed Go Green sales tax holiday — if avoiding sales tax is what motivates online and mail-order holiday evergreen shoppers.

Senator Funke plans to introduce S. 6232 during the 2016 legislative session. If approved, Go Green Weekend would run the first Friday through Monday in December. All fresh-cut evergreen trees and evergreen products would be exempt from New York State sales tax (local tax jurisdictions would have the option to waive local sales tax). Other details have to be worked out. Presumably, only New York evergreen products would be eligible for the exemption — not trees imported from rivals Oregon and North Carolina. What this would mean for tree lots that sell “freshly cut” trees from more than one state is anyone’s guess.

Green v Green

Warning! Go Green Weekend could confuse environmental enthusiasts accustomed to associating the word “green” with environmentally friendly actions and products. “Go Green Weekend” recalls the Missouri Show-Me Green Sales Tax Holiday (for energy efficient products) and brings to mind tree planting, not tree harvesting. We can only hope it doesn’t spark a protest movement. Just imagine if your freshly cut New York Christmas tree came with a tree-hugger in tow.

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photo credit: Snowww! via photopin (license)