Weird Tax Law Changes of 2012

2012 has proven to be quite a year with major legislative decisions being made and various changes affecting consumers and businesses alike. Now add to that list several weird indirect tax changes that took place last year.

The Tax & Accounting business of Thomson Reuters recently released some of the changes and explained how having the right tax solutions and resources can help business owners stay on top of indirect tax and VAT legislation.

“While some of the changes may seem odd and unnecessary, they highlight how challenging it is for corporations to stay on top of the sea of changing indirect and value-added tax laws,” said Carla Yrjanson, Vice President of Tax Research and Content for Thomson Reuters.”

A few of the peculiar sales and use tax laws include:

  • Illinois residents who favor Whoppers aren’t subject to the Illinois candy tax. The tax applies to all candies except those that contain flour. (IL FY 2010-01 July 2009; Illinois DOR Informational Bulletin)
  • Most food and food products are tax exempt in New York. However, vegan edible gummy drinking glasses are deemed a confection and therefore taxable under current sales and use tax law. (Advisory Opinion issued October 24, 2012)
  • In Maine, boat parts and supplies such as sails, rope, rigging and masts are tax exempt when used for operating, repairing and maintaining windjammers used to ferry people and cargo as a business activity. (36 MRSA § 2020 signed into law July 6, 2011, effective October 1, 2012)
  • A new law in Maryland taxes residents for bringing their own bottle of wine to their favorite restaurant, subjecting them to double taxation for having someone open the bottle for them. (MD SB 755/HB 228; Maryland Tax Bulletin 12-1 signed into law April 10, 2012, effective July 1, 2012)
  • Sitka, Alaska, retirees over the age of 65 are exempt from sales tax for the purchase goods, services and rentals. (effective October 1, 2012)
  • Residents in Connecticut must pay taxes on children’s diapers but not adult diapers.
  • The state of Alabama charges an additional $0.10 excise tax on any playing card deck that contains less than 54 cards. The taxable decks must have revenue stamps affixed to each individual package. Any taxable playing cards missing the proper stamps found in the possession of any person, firm, corporation, club or association are subject to confiscation. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §573; Acts 1951, No. 978, p. 1653)
  • The VAT on admissions to theaters was raised to 21 percent in Spain. To combat the increase, one theater owner decided to transition to a theatrical produce stand, selling carrots instead of tickets since vegetables are currently taxed at 4 percent. When customers buy carrots from the theater, they are given free admission to a theatrical performance. (