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Top 10 Unusual Sales Tax Laws

April 10, 2006 (SmartPros) Taxware just released its list of unusual U.S. sales tax laws for 2006.

In reviewing the latest sales and use tax laws from all fifty states, the Taxware team has selected the following as the most unusual in 2006:

10. West Virginia celebrates Independence Day with a special tax on sparklers and other novelties, applied in addition to the state's regular 6 percent sales tax.

9. In Kentucky, thoroughbred stud fees are subject to sales tax. One breeder stated, "You would not believe how many checks I send back because they forget to add the $30,000 in sales tax to the $500,000 fee!"

8. North Carolina is a tax-free zone for motor sports. Members of racing teams and motor-sport sanctioning bodies can obtain refunds for tax paid for the aviation fuel used to get to a motor sport event.

7. In Kentucky, the taxman no longer sings when the telephone rings. As of January 1, no tax will be charged on pay-phone calls. But next door in Indiana, pay-phone calls are still taxed.

6. In Wisconsin, cloth diapers are exempt from sales tax, but disposable diapers are taxable.

5. In California, fresh fruit is exempt, but an apple purchased through a vending machine is taxable on 33 percent of the price.

4. Texas' holiday spirit includes a heaping helping of taxes. Holiday tree decoration services are taxable if the decorator provides the ornaments, but if you buy the ornaments yourself, the decoration service is tax-free. Texas also taxes holiday pictures painted on windows, greeting cards featuring Santa Claus and the Easter Bunny, and phone calls from holiday characters.

3. In Ohio, the dead get a tax break. Although applying makeup in a beauty salon is taxable in the state, a corpse in a mortuary can have its makeup applied tax-free.

2. In South Dakota, although ground ambulance services are not subject to sales tax, you'll pay tax to use air ambulance services.

1. The Pennsylvania government has discovered how to tax air. Use of a coin-operated vacuum vending machine, commonly found at car washes, is now taxable.

2006 SmartPros Ltd. All rights reserved.

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