With the economy still struggling, states are getting fairly crafty with how they charge consumers via sales taxes. It's no secret that dubious, yet all-too enforceable government laws have been with us since the dawn of the civilized world. In ancient Egypt, the pharaohs taxed cooking oil – of course, the main seller of cooking oil was the pharaoh. During the first century AD, the Roman empire taxed urine – a popular source of ammonia for common tasks like tanning hides and cleaning clothes. Then at the height of the Dark Ages (an era in European history notorious for its poor hygiene), some European governments taxed the sale of soap!
(For more on taxes, check out Countries With The Highest And Lowest Taxes.)

Unfortunately, onerous and unusual state taxes are still very much with us. What are some of the biggest offenders – and are they active in your state? Here's our top five:

TUTORIAL: Personal Income Tax Guide

Food Packaging Tax
States like Colorado have a weird definition of what constitutes food packaging. In using the term "essential" in its tax language for such commodities, Colorado finds itself in the strange position of taxing paper cup lids and napkins, but not paper cups or fast-food French fry containers.

Hot Air Balloon Tax
If you're in Kansas and in the mood to take a ride in a hot air balloon, beware of the state government's "amusement" tax. State regulation makes balloon rides taxable. But there is a caveat – only balloon rides that are tied, or tethered to the ground, are considered taxable. So, if you want to avoid paying taxes when taking a balloon ride over Topeka, make sure to leave the rope at home!

Careful on That Bagel
New York State has an interesting way of handling bagels – and taxes on buying bagels. If you want to eat a bagel tax-free, don't have the deli counter "prepare" it for you (i.e., add cream cheese or cut the bagel in two pieces). Prepare that bagel yourself, and you don't have to pay a tax on it.

Wet Fuse
In West Virginia, celebrating the Fourth of July – or any celebration where fireworks are used, can lighten your wallet. The state has a special tax – on top of its 6% sales tax – on things like ladyfingers and sparklers.

Fruit Cakes
California has gone bananas over the purchase of fruit by consumers. If you buy an apple from a regular retailer, you're in good shape, as the purchase is tax-exempt. If you buy fruit from a vending machine – and who hasn't done that – you'll pay an additional 33% on the amount of the purchase.

Maybe the most egregious case of over-taxation on a state level comes from Pennsylvania, where the commonwealth actually taxes the use of air (on carwash vacuum cleaners).

The Bottom Line
The above taxes certainly aren't the only taxes on statewide level, but they are surely among the most unique. This site has a more complete list of sales taxes in all 50 states: http://retirementliving.com/RLtaxes.html. (For some odd tax breaks, check out That's A Tax Break?)

Related Articles
  1. Personal Finance

    The World's Most Luxurious Vacation Retreats

    White sand beaches, nature preserves, amazing hot springs...if you're looking for heaven on earth, these spots qualify.
  2. Taxes

    What IRS Form 1023 Is Used For

    To be treated as a tax-exempt organization, start by filling out this form.
  3. Taxes

    Late with Your Taxes? Grab IRS Form 4868

    Fill out this form to get a few more months to file your tax return. But remember, April 15 is still the payment due date if you owe taxes.
  4. Savings

    How Volatile Exchange Rates Affect Your Vacation

    Those ever-changing fluctuations can make a difference in anything from your hotel room to an ATM transaction.
  5. Personal Finance

    6 Tips for Investing in Antiques

    Historically, antiques are highly appreciating assets, but be prepared for a long-term investment.
  6. Personal Finance

    JetSuite Simplifies Private Jet Rental

    Chartering your own plane just got a bit more affordable.
  7. Insurance

    How to Shop for Home Insurance

    Tips for getting the best protection for your place and possessions.
  8. Investing

    How Much Does a Super Yacht Cost – Really?

    Buying the vessel is just the beginning – then you have to pay for the crew, mooring and all those 'obligatory' toys....
  9. Term

    What is Wealth Management?

    Wealth management combines financial and investment advice, accounting and tax services, and legal and estate planning.
  10. Investing

    Can You Afford a Private Jet?

    And even if you can, is it cost-effective to buy one?
RELATED TERMS
  1. Duty Free

    Goods that international travelers can purchase without paying ...
  2. Wealth Management

    A high-level professional service that combines financial/investment ...
  3. Tax Deductible Interest

    A borrowing expense that a taxpayer can claim on a federal or ...
  4. Deferred Tax Asset

    A deferred tax asset is an asset on a company's balance sheet ...
  5. Average Cost Basis Method

    A system of calculating the cost basis on mutual fund positions ...
  6. Crummey Trust

    An estate planning technique that can be employed to take advantage ...
RELATED FAQS
  1. What is the difference between comprehensive income and gross income?

    Comprehensive income and gross income are similar, but comprehensive income is a specific term used on a company's financial ... Read Full Answer >>
  2. What tax breaks are afforded to a qualifying widow?

    The tax breaks accorded to qualifying widows or widowers include being able to use a tax filing status that allows for a ... Read Full Answer >>
  3. How is income taxed on prorated salary?

    Since yearly income is viewed by the Internal Revenue Service (IRS) as the total amount of income a person has made over ... Read Full Answer >>
  4. How can I tell which of my business expenses count as write-offs?

    Any basic, reasonably necessary expenses incurred in running a business can be considered possible write-offs. Such expenses ... Read Full Answer >>
  5. What is the difference between a write-off and a deduction?

    There is no difference between a tax write-off and a tax deduction. It's possible that the confusion arises between a tax ... Read Full Answer >>
  6. What is the difference between taxable income and gross income?

    Gross income includes all of the income a person receives during a year that is not explicitly exempt from taxation, whereas ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!