Food, Teeth, Yachts, Alcohol and Marijuana: 2013 Quirky Sales Tax Laws Revealed

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Businesses are chartered with interpreting these strange and often downright confusing laws and then implementing them into their operational systems.

As if corporate tax departments didn’t have enough to deal with, our annual quirky taxes release underscores just how challenging sales and use tax compliance can be. On top of keeping abreast of over 14,000 taxing jurisdictions, and the thousands of “normal” indirect tax code changes a year, businesses are chartered with interpreting these strange and often downright confusing laws and then implementing them into their operational systems.

Here are a few samples of the changes passed or implemented in 2013:

• Hungry for revenue, two Massachusetts cities increased the tax on meals from 6.25% to 7%. The cities? Sandwich and Salisbury.

• Straighter teeth just got cheaper in Arizona. Orthodontic devices are no longer subject to sales and use tax.

Connecticut did away with its luxury tax on yachts, and tax is exempted altogether if the boat is docked 60 days or less a year.

• In North Carolina, chiropractors must collect sales tax on nutritional supplements and vitamins provided as part of a patient’s treatment plan, and students must pay sales tax on meals purchased on college campuses.

Rhode Island eliminated sales and use tax on wine and spirits sold at package and liquor stores from Dec. 1, 2013, through March 31, 2015.

• The legalization of recreational marijuana comes with a hefty tax. Both Washington and Colorado are taxing pot at a whopping 25%.

• In Washington state, hiring a personal chef is a taxable service, and the chef is required to collect sales tax. However, if a meal is prepared with raw or undercooked eggs, fish, meat, or poultry and refrigerated or frozen for consumption at a later time, and cooked prior to consumption to prevent food-borne illness, then the tax is waived.

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A blog from Thomson Reuters, a source of intelligent information for businesses and professionals.

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Carla Yrjanson

Carla Yrjanson is the Vice President of Tax Research & Content for Indirect Tax within Thomson Reuters. She leads the Tax Research & Content Team which is responsible for delivering Sales/Use...

J. Harold McClure

Dr. James Harold McClure, senior manager of transfer pricing at Thomson Reuters, has over 18 years of transfer pricing and valuation experience and has authored a number of papers on the subject....
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