The Weirdest Tax Laws in Every State
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Each of the 50 states has had at least one interesting tax law throughout the years. From slightly eccentric to full-on bizarre, here are our picks for the strangest tax quirks in every U.S. state.
Did you know Alabama used to tax playing cards up until 2015? The state levied a 10-cent tax on decks of playing cards with 54 or fewer cards and imposed a $2 annual licensing fee on any stores selling the cards.
Captains of whaling boats in Alaska get a special tax break — they are allowed to deduct up to $10,000 annually for qualified expenses such as boat maintenance, storage and distribution of meat, and specific provisions for their whaling crew. This deduction only applies to captains recognized by the Alaska Eskimo Whaling Commission.
The Arizona state tax code is inconsistent when it comes to purchasing ice. Ice cubes are considered food and, therefore, not taxable when purchased; however, if you buy a block of ice, you will probably pay a sales tax. The vendor must pay a “transaction privilege tax” for selling blocks of ice, which is passed to the consumer.
Arkansas imposes a 6.5 percent tax on some highly-specific services, including tattoos, laser hair removal, and body piercings. The state also taxes pet grooming, kennel service, lawn care, and landscaping services.
If you intend to purchase fruit in California, we’d advise buying it from a grocery store. Fresh fruit is not taxed when sold in stores in California — however, if you decide to grab some fruit from a vending machine, you’ll find yourself paying a hefty 33 percent sales tax.
Buying a cup of coffee in Colorado comes with an extra 2.9 percent tax. This tax isn’t for the coffee but the lid on your coffee cup. You’ll also find yourself paying this extra tax on other packaging the state deems “nonessential,” including straws, napkins, and cup sleeves. Colorado also charges sales tax on liquor-filled candy, as it does not consider them food.
Connecticut professional athletes are allowed to write off clothing and personal safety equipment. The exemption is limited to anything that can be worn, including items such as life vests or bike helmets.
Delaware is often considered a business tax haven, offering many incentives to entrepreneurs and business owners. In fact, there are more businesses in the state than people. Delaware allows you to form a business quickly and easily — you don’t even have to live in the state to incorporate there, meaning non-residents can also take advantage of Delaware’s tax rules. Corporations and LLCs can reap tax benefits like low flat-fee taxes paid annually and no royalty taxes on intangible assets like books, songs, photography, etc.
Before some recent restrictions, you could pay less in Florida property taxes due to an ag exemption if at least some of your property was designated for agricultural purposes. If you obtain an agricultural classification, you pay an agricultural use rate, which is typically much lower than the usual assessed tax rate.
This has recently changed due to new legislation. Still, for a long time, Georgia residents had to itemize their deductions on their state tax return if they itemized deductions on their federal tax return.
It pays to have an “exceptional tree” in Hawaii. You can write off up to $3,000 in exceptional tree maintenance costs every three years. The state’s requirements for a tree to be exceptional take several things into account — the tree’s rarity, size, and age among them.
Idaho has some interesting rules regarding the taxation of digital property. Digital entertainment such as e-books, movies, and music are taxable in this state, but electronically delivered, remotely accessed software (AKA cloud-based software) is exempt from this taxation.
In Illinois, how much tax you pay when buying candy depends on the sweet’s ingredient list. If the candy has flour, it’s exempt from taxation because it’s considered an ordinary food. If the candy doesn’t contain flour, it’s subject to the state sales tax rate of 6.25 percent.
The food tax gets even more complicated in Indiana. In addition to the flour requirement, prepared food is taxed based on how it is sold. Food sold in bars, drops, or pieces is taxable, while products sold “whole” are tax-exempt. For example, marshmallows are taxable because they are sold in pieces, but you’d be able to buy a jar of marshmallow crème tax-free.
In Iowa, whether you’re taxed when purchasing a pumpkin depends on its intended use. Pumpkins sold and advertised as decorations are taxed, but certain pumpkin varieties used for baking pies or those purchased with food stamps are tax-exempt.
Want to ride in a hot air balloon in Kansas? The price you pay depends on whether the balloon is tethered to the ground. If it is, Kansas considers it to be an amusement activity, and you’ll be paying the state’s 6.5 percent sales tax rate. However, if the balloon is flying untethered, the state considers it transportation, making the activity tax-free.
Kentucky imposes a 6 percent sales tax on thoroughbred stud fees. This means that breeding a stallion to a mare is taxed in Kentucky, but any breeding out of the state is not subject to Kentucky’s sales tax.
Normally, Louisiana has three sales tax holidays during the year. You can purchase some items tax-free on certain days of the year: hurricane preparedness supplies in May; school supplies in August; and firearms, ammunition, and hunting supplies over Labor Day weekend in September. However, these tax holidays were put on hold until 2025, when state legislators didn’t include the three sales tax holidays in the state budget.
Maine is famous for its blueberries, and the state takes advantage of this by charging a blueberry tax — 1.5 cents per pound of blueberries. The state uses this tax revenue to support the Wild Blueberry Association of North America.
Residents and building owners in Maryland are subject to additional sewage fees to support the state’s Bay Restoration Fund. This fund is focused on upgrading Maryland’s water treatment plants. The state charges a fee of $5 per month on sewer bills and $60 annually for septic systems.
If you are bringing alcohol into Massachusetts as a “household effect or gift” and not intending to resell it, you are technically required to obtain a special permit issued by the Alcoholic Beverages Commission. This permit allows you to import the alcohol into the state legally.
Michigan treats hot food and groceries differently like many other states do, and sometimes it all comes down to whether the food comes with a utensil. If, for example, you buy hot popcorn at a popcorn shop, you might be charged sales tax, but if you buy a sealed bag of popcorn at the same shop, it may be tax-free.
Fur is a little more expensive in Minnesota. The state charges businesses a 6.5 percent tax on clothing mainly comprised of fur, including shipping of the item and any related charges. Though the companies are taxed, the bill is typically passed on to the consumers.
Mississippi offers its residents a Reforestation Tax Credit worth up to 50 percent of the cost of the “approved hardwood and pine reforestation practices.” This credit is only available to private landowners who must get a Registered Forester to develop a restoration plan. A Registered Forester also needs to approve the work using state tax form 80-315, and the landowner must submit the form to the Mississippi Department of Revenue to receive the credit.
Back in 1820, Missouri implemented a bachelor tax targeting unmarried men between 21 and 50 years of age. Men who met these criteria had to pay a $1 surcharge per year (upwards of $30 per year as of 2022, accounting for inflation). However, the law didn’t last long — it was repealed only two years later.
Due to low registration fees and no sales tax, purchasing and registering a vehicle in Montana can save you a lot of money. If you don’t reside in Montana, you can enlist the help of a vehicle registration service or registered agent to help you set up an LLC and get you a new Montana title and the advantage of paying flat rate registration fees. However, this could complicate your vehicle insurance and isn’t necessarily recommended.
Nebraska is another state with weirdly specific rules on what kinds of food are taxable. In this state, it’s all about whether the food comes with utensils (amongst other requirements, like the percentages of certain foods that make up the business’s total sales). If food does come with utensils, it’s typically taxable. This is true even if you’re buying a bottle of soda and the seller has optional straws available on the counter.
Of course, Nevada’s weird tax thing has to do with gambling. As an incentive to file your taxes, the state offers a free deck of cards as a thank-you for every filed return.
Anyone moving a lot of dirt in New Hampshire must pay a tax of 2 cents per cubic yard. This applies to anyone moving more than 1,000 cubic yards, even if you give away the dirt for free.
In 2006, New Jersey imposed a new tax rule requiring you to pay an extra 0.4 percent in sales taxes on all cars worth at least $45,000 or have a fuel efficiency rating of 19 or lower. This is called the Luxury and Fuel-Inefficient Vehicle Surcharge.
Once you turn 100 in New Mexico, you’re exempt from state taxes. This only applies if you have lived in New Mexico for at least six months and aren’t listed as a dependent on someone else’s tax return.
The oddly specific food taxes continue in New York. A state famous for its bagels, New York charges you an extra 8 cents if you purchase your bagel sliced. Uncut bagels are sold tax-free.
North Carolina wants to know about your pets. Some counties charge a pet tax on your fur babies. Depending on where you live, you may need to register your pet and pay up to $30 (or only $10 if your pet is spayed or neutered).
You must pay a gross receipts tax in North Dakota if you sell, license, or are otherwise compensated for performing rights of music you have created. This includes use in an opera, musical, etc. The tax rate is 5 percent, and most composers opt to pay the tax to a performance rights organization which then pays the tax on the composer’s behalf.
The state of Ohio has specific rules on what parts of a living thing can be taxed. For example, the state taxes human hair and animal organs but does not tax human organs, bones, tissue, or blood. This means that physicians must pay sales tax on an artificial joint to be used for surgery but would not be required to pay taxes on an organ such as a heart or kidney.
In Oklahoma, fixtures and furnishings are treated as property when paying Oklahoma property taxes. This includes general household furniture but excludes things like tools or livestock.
States that have legalized marijuana tax it as they see fit. In Oregon, it’s taxed at 17 percent—pretty far up there in comparison to many other states. You may even be charged an extra 3 percent in some localities, making the tax rate 20 percent in total.
In Pennsylvania, you can only buy liquor in state-run stores; you’ll be charged an 18 percent sales tax when you do. The state enacted this alcohol tax in 1936 to raise funds to help the community of Johnstown rebuild after a devastating flood. The tax was supposed to be temporary but remains in effect today.
Rhode Island’s individual state income tax return comes with an interesting quirk—smiley and frowny faces on lines 15c and 16 of the RI-1040 tax form. A happy face indicates you are owed a refund from the state, while a sad face means you owe taxes.
South Carolina offers a Premarital Preparation Course Credit to couples who attended a professional premarital preparation course for a minimum of six hours before getting married. You must have a certificate of completion and attend the course within 12 months before applying for a marriage license with the state. The credit is worth $50 to those filing jointly and $25 to those filing separately.
South Dakota is another state that is often considered a tax haven. With no individual income tax, a low state sales tax rate of just 4.5 percent, and no income tax for corporations, it’s highly advantageous for individuals and businesses.
Look out for state and local litigation taxes if you’re going to court in Tennessee. Who owes the taxes depends on whether the case is tried in a civil court (the plaintiff) or criminal court (the defendant, if found guilty).
Bigger isn’t always better in Texas — the state charges sales tax on belt buckles, but regular belts and even cowboy boots remain tax-exempt.
In Utah, prepare to pay a little extra when visiting a strip club. The state imposes a 10 percent tax on strip club entry fees and any food and drinks sold there.
In Vermont, the city council has the power to tax the “exhibition of common showmen, circuses, menageries, carnivals, and shows of every kind.” This includes plays, athletic contests, exhibits, or any entertainment for money. They can also tax admissions to these events unless they are purely for charitable purposes.
During Virginia’s annual tax holiday, you can save on more things than back-to-school supplies. The state’s list of eligible items includes the usual stuff like pencils, binders, and school clothes but also garments such as wedding apparel (including veils), lab coats, and even corsets.
Washington is one of the states that does not impose an income tax. Such states typically make up for the lack of income tax by having higher property taxes. Back during the Great Depression, farmers were struggling to pay their property taxes, so voters in the state approved an income tax to reduce the burden on farmers. Business owners were unhappy about this change, and the state’s supreme court ultimately overruled the new income tax law.
Selling sparklers comes with an added state tax in West Virginia. If you intend to sell sparklers for some Fourth of July celebrations, you must first fill out an application for the sale of sparklers and novelties. The State Fire Marshall must also license your business.
Did you know Wisconsin used to tax the internet? This was finally abolished on July 1, 2020, when charges for internet access services became tax-exempt. There is one exception for internet access being sold as a bundle with other services.
Wyoming is considered to be another tax-friendly state. It does not charge income tax, and its sales tax rate is also low at just 4 percent. The state also does not charge income tax on items that many other states do, such as candy or gum.