WEIRDEST SALES AND USE TAXES

Accounting Today – States and localities sometimes must resort to desperate measures to raise much-needed tax revenue. Here’s a list of the quirkiest sales and use taxes of 2011 and 2010 from the Tax & Accounting business of Thomson Reuters.

In Vermont, proceeds from an auction are exempt only if the auctioneer performs the auction on the premises of the property owner. If the auction takes place elsewhere, or if any other property is commingled with that of the owner, then the proceeds are subject to sales tax.

We’re not alone.

Residents in Pennsylvania can breathe a little easier after an April 2011 ruling by the Commonwealth Court of Pennsylvania. In Air-Serv Group, LLC v. Commonwealth, the court concluded that air from the atmosphere is not subject to state sales tax.

In 2010, New York cracked down on its enforcement of the tax on prepared food, specifically targeting a New York staple: bagels. If you buy a whole bagel and take it home with you, it is exempt from tax. However, if you purchase that same bagel, but eat it at the bagel shop (even without cream cheese), bagel shops must charge sales tax on the purchase price. Apparently, the mere slicing of a bagel kicks your bagel purchase into a taxable transaction. As a result, New Yorkers are paying approximately 8 to 9 cents more per bagel.

Effective March 1, 2010, Colorado eliminated the exemption for non-essential food items and packaging provided with purchased food and beverage items. So, while cups are considered essential, lids are not.