When most of us think "taxes," we think of federal taxes — the IRS, Form 1040, and everyone's favorite holiday, April 15. It's true that the IRS is full of Very Serious People collecting Very Serious Taxes. But we can't forget state and local governments either. They collect their fair share of serious taxes — but they impose some pretty silly tax laws, too. Here are some of our favorites:
- California offers a tax exemption for income you receive to settle claims arising out of the Armenian genocide. If you or your ancestors were persecuted by the Ottoman Turkish Empire between 1915 and 1923, your income from that settlement is tax-exempt. But sadly, if the persecution occurred in 1924 or later, your friends in Sacramento want a share.
- California also imposes a 33% tax on fresh fruit bought from vending machines. Apparently, the folks in charge of promoting healthy lifestyles would rather see you buy cookies or potato chips!
- Maryland imposes a $5.00/month "Chesapeake Bay Restoration Fee" on homeowners and businesses to raise funds to improve sewer treatment plants that discharge into the bay. Naturally, taxpayers have dubbed it the "flush tax."
- Minnesota and several other states impose a tax on marijuana — in Minnesota, it's $3.50 per gram. But wait, you say . . . pot isn't even legal in Minnesota, is it? Well, no, it's not . . . but if dealers don't pay the tax, the state has another way to bust them. (Remember who finally got Al Capone?) So... genius? Or evil genius?
- New York lets you buy bagels and take them home to eat without paying sales tax. But let the counter man slice it, and now it's a "prepared" meal for on-premises consumption — and subject to an 8% sales tax.
- Oregon generously gives double amputees a $50 tax credit. But lose just one limb and you're out of luck. (Apparently, it costs an arm and a leg to be disabled in Oregon!)
- South Carolina offers a $50 per carcass "Venison for Charity" credit, with an actual form (SC Schedule TC-51) for licensed butchers and meat packers who donate deer meat for distribution to the needy. (We're not making this up.)
- Washington's King County, which includes Seattle, imposes a new $50 fee to report a death to the Medical Examiner's office. Officials call it a crime-prevention measure to give the government enough money to look at more questionable deaths for evidence of crime.
Governments have always found silly ways to nickel-and-dime their citizens. And some of those are just plain unavoidable. (If you live in Maryland's Chesapeake Bay watershed and you've got to go, well, you've just got to go.) But there's nothing silly about wasting money on taxes you don't have to pay. That's why we specialize in proactive tax planning to help pay less. Do you think you paid too much on April 15? Give us a call and let's see if we can save you some serious money!
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