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Celebrate July 4th with an Exempt Flag

  • Jul 3, 2015 | Gail Cole

 Should it be exempt from sales tax?

What’s the best way to celebrate our nation’s independence? By exercising our right to freedom from taxation, of course. That as good a reason as any why retail sales of American flags are exempt from sales tax in numerous states.

According to the Tax Foundation, flags are exempt from sales tax in the following states:

  • California (CA Rev. & T. Code )
  • Connecticut (CN Gen. Stat. 12-412(23))
  • Florida (FL Stat. 212.08(7)(F))
  • Maryland (MD Code, Tax General 11-205)
  • Massachusetts (MA Gen. Laws Ch. 64H 6(w))
  • New Jersey (NJ Stat. 54:32B-8.26)
  • New York (NY Tax Law 1115(a)(11))
  • Pennsylvania (72 PA Stat. 7204(32))
  • Rhode Island (RI Gen. Laws 44-18-30(34))
  • Tennessee (TN Code 67-6-329)
  • Vermont (VT Stat. tit. 32, 9741(33))
  • Virginia (VA Code 58.1-609.1)
  • West Virginia (WV Code 11-15-9(a)(49))
  • Wisconsin (WI Stat. 77.54(46))

Certain states, like New Jersey, have called out the exemption on department of revenue websites. The New Jersey Sales Tax Notice reminds that the exemption is limited to actual New Jersey State or United States flags,” and does not extend to “mere representations of flags or to merchandise with a flag theme. So that Santa Claus figurine holding a miniature flag? It’s taxable.

The New York State Department of Taxation and Finance released a notice on July 2 reminding New Yorkers that “USA, NYS, POW and military flags are exempt from sales tax” year round. The exemption extends to certain military decorations when sold to active service members of veterans of the US military. Taxation and Finance Commissioner Jerry Boone even issued a statement on the subject:

“July Fourth is a great time to honor those brave men and women who fought for the freedoms we enjoy each day. I encourage New Yorkers to take advantage of this tax exemption and proudly display our nation’s flag as we celebrate Independence Day.”

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Lawmakers in Maine are considering legislation that would exempt the United States Flag from sales tax. Caveat: it must be made entirely of cloth or similar material.

Keeping up with sales tax

It’s up to sellers to inform themselves of sales tax rates, rules, and regulations. In other words, the onus falls on flag vendors to correctly apply sales tax or sales tax exemptions in all states where sales are made. And it can be an onerous task.

Automated sales tax Software-as-a-Service simplifies transaction tax management and increases compliance. Learn more.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.