U.S. Markets open in 54 mins

10 Strangest Ways States Tax You (And Don't)

David Muhlbaum, Online Editor, Kiplinger.com


Thinkstock

Funny thing about our federal system of government: There's that complicated tax code that Uncle Sam keeps and the IRS enforces.

Then there's an even larger patchwork of taxation schemes crafted by 50 state legislatures, all coming up with new ways to extract coin from their citizenry (or create social policy through tax breaks). Some of these regimens are, well, quirky.

We've found ten of the strangest from across the land.

Maine: Taxing a Treasured Fruit


Zirpe/Dladek via Wikimedia Commons

Maine legislators, a flinty bunch, tax anyone who deals in their official state fruit--wild blueberries, at the rate of $0.015 per pound. The resulting revenues--almost $1.7 million to state coffers in the fiscal year that ended in June 2016--are used to promote the crop and agricultural research.

The state also taxes harvesters and processors of hard-shell clams (known in the state as mahogany quahogs) at $1.25 a bushel, but state revenues for that are much lower. The taxes are levied at the wholesale level, but naturally, they end up being passed on to the consumer.

SEE ALSO: The 10 Worst States to Live In for Taxes Virginia: Counting (and Taxing) Sheep


Thinkstock

Just as Maine taxes its blueberries and clams, Virginia taxes its ... sheep. The Old Dominion levies a $0.50 excise tax on every lamb or sheep sold in the state.

Both the Maine and Virginia taxes are examples of "checkoff" programs that collect taxes from an industry to fund promotional campaigns for the products. National commodity checkoff programs, authorized by the U.S. Department of Agriculture, have brought you campaigns such as "Beef: It's What's for Dinner" and "Got Milk?"

But the Virginia program is extremely modest by comparison, having collected only about $11,000 in fiscal year 2015. The funds go to the Virginia Sheep Industry Board, which spends them largely on predator control.

South Carolina: A Break for (Educated) Matrimony


iStockphoto

Eager to see married couples stay that way, South Carolina's legislators have encouraged those tying the knot to take a premarriage counseling course by offering a tax credit.

A couple who sits through (together, natch) a minimum of six hours with a licensed professional or active member of the clergy (or their designee, if "trained and skilled in premarital preparation") can take a $50 tax credit when filing jointly once married.

The law was passed in 2006. Keeping up with the times, in 2015, the South Carolina Department of Revenue updated the relevant tax form to change who could claim it from "a man and a woman" to "a couple."

SEE ALSO: Kiplinger's State-by-State Guide to Taxes New Hampshire: Taxing the Dirt


iStockphoto

All states tax property: New Hampshire taxes it if you move it around. Well, if you move an awful lot of it around.

The Granite State is, of course, a rocky place, with plenty of quarries and gravel pits. And so the state has an excavation tax at a rate of at $.02 per cubic yard of earth excavated (if more than 1,000 cubic yards are moved). While this is primarily aimed at industrial extraction (most states levy severance taxes on coal, oil and other mineral wealth), New Hampshire specifically notes that the tax is due even if you're just giving away the dirt. So you can put up a "FREE FILL" sign and hope someone takes it, but you'll still owe the tax man.

Kansas: Taxing the Weak Stuff


Thinkstock

The Sunflower State is among a bevy of jurisdictions that allows sale of lower-alcohol beer (the term of art is "cereal malt beverage") in convenience and grocery stores.

But Kansas also taxes "3.2" beer differently--and there lies the rub. At a liquor store, all products, including, say, a conventional six-pack of Budweiser (with 5% alcohol by volume), are taxed at a special rate of 8%. At the convenience store down the street, however, ordinary sales tax is levied on the lower-alcohol, cereal malt beverage bottle of Bud. That often ends up being more than the 8% alcohol tax. In Pomona, Kans., for example, the effective rate on the weaker beer would be 10%. Go figure.

SEE ALSO: States With the Scariest Death Taxes California: Taxing the Strong Stuff


Thinkstock

When it comes to taxation, the rule is generally the stronger the booze, the higher the tax (that's why Kansas's beer tax scheme is an anomaly). California follows that curve, but at 100 proof, you'd better be ready to pay through the nose.

Distilled spirits are taxed at $3.30 a gallon if below 100 proof, or 50% alcohol. Go over that, as with some "barrel proof" whiskeys or Cruzan 151 rum, and the tax doubles to $6.60. Maryland also notes the 100 proof point, but it only adds 1.5 cents per proof, per gallon, to the relatively modest liquor tax of $1.50 per gallon, taking the levy on the Cruzan to $2.27 per gallon.

Hawaii: Atoning for Exile


Djzanni via Wikipedia

While most states have programs that provide some property breaks for the disabled, Hawaii's laws are notable for calling out a specific ailment: Hansen's Disease, better known as leprosy.

Why? For decades -- in fact, until 1969 -- the state had a policy that banished thousands of sufferers to an isolated area on the island of Molokai; a handful still live there by choice, in what is now a national park. The disease is now curable.

Hawaii has sought to make amends for the policy, exempting the first $50,000 of real property's value from taxation for those with the disease, the same break as for residents who are blind, deaf or totally disabled. Compensation Hansens' patients receive for their ailment is also exempt from state income tax.

Nevada: The Softer the Music, the Lower the Taxes


Thinkstock

Entertainment venues pay a business tax to the Silver State ranging from 5% to 10% on admissions fees (and food, drink and merchandise sales) whenever there's live entertainment going on.

There are exemptions, however, including this one, for businesses that provide " . . . Instrumental or vocal music, which may or may not be supplemented with commentary by the musicians, in a restaurant, lounge or similar area if such music does not routinely rise to the volume that interferes with casual conversation and if such music would not generally cause patrons to watch as well as listen."

So your piano player can play "Feelings" softly and even crack a few jokes, tax-free, for your business. Just make sure they're not funny enough to attract attention.

New Jersey: $100K Mercedes = $400 More Tax


Thinkstock

Want to own a plush or fuel-thirsty ride? That'll cost you extra in the Garden State.

Cars that cost $45,000 or more or have a combined EPA fuel-mileage average of 19 or below pay an additional 0.4% on top of New Jersey's 7% sales tax.

SEE ALSO: Kiplinger's State-by-State Guide to Taxes New Mexico: Cutting Centenarians a Break


iStockphoto

In the Land of Enchantment, making it to 100 years has a payoff beyond the chance that Al Roker will wish you a happy birthday on the "Today" show: You don't have to pay state income tax anymore.

If you've been physically present in the state for at least six months and a resident of the state on the last day of the year, and you're not someone's dependent, you're eligible. You'll still need to file, and there are some complications if you're married and your spouse doesn't qualify.

  • Michael Bloomberg says it’s not so ‘simple’ to produce his tax returns — here’s what most high-income tax returns have in common
    Politics
    MarketWatch

    Michael Bloomberg says it’s not so ‘simple’ to produce his tax returns — here’s what most high-income tax returns have in common

    Michael Bloomberg, the billionaire former New York City mayor running for the Democratic presidential nod, says he will release his tax returns — but that's no easy feat. “I can't go to TurboTax,” Bloomberg, the founder and CEO of the global media and financial data company Bloomberg L.P., told Democratic debate moderators on Wednesday night. Bloomberg, who is worth $65.2 billion according to Forbes, said he makes money from all over the globe, so his tax payments are complex.

  • Analysts: 2 Big 8% Dividend Stocks to Buy (And 1 to Sell)
    Business
    TipRanks

    Analysts: 2 Big 8% Dividend Stocks to Buy (And 1 to Sell)

    The company has been making reliable dividend payments since 2014, and has raised the payment modestly in the past two years. At $1.44 annualized, the yield is a generous 8.54%. Barclays analyst Christine Cho sees PAGP growing going forward, resting as it does on a sound foundation.

  • ‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist
    Business
    MarketWatch

    ‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist

    Rattled by rising non-China coronavirus cases — notably in South Korea — investors appear unwilling to load up on stocks heading into the weekend. Welcome to the world of helicopter investing and our call of the day from Barclays Wealth Management's chief investment officer William Hobbs, who finds overly anxious investors living in the “long shadow” caused by the financial crisis. “The most common narrative in markets is what to do when the next recession comes along — own Treasurys, own gold, own quality to such an extent that my concern would almost be that if the next recession is of a more normal variety, such as a stock retracement of 10% to 15% and moderate declines in unemployment, you'll find that you have overprotected yourself and the underperformance could actually be in the areas which you thought were giving you safety,” Hobbs told MarketWatch.

  • Stock market dives — a 20% plunge in some hot stocks could be next
    Business
    Yahoo Finance

    Stock market dives — a 20% plunge in some hot stocks could be next

    The Dow Jones Industrial Average was down close to 300 points by early afternoon trading. But how it got to that point has traders mildly concerned. After a respectable open where bellwether Apple traded in the green momentarily, the Dow plunged to a session low of roughly down 388 points.

  • Vanguard funds to make hundreds of millions on Morgan Stanley's E-Trade takeover
    Business
    American City Business Journals

    Vanguard funds to make hundreds of millions on Morgan Stanley's E-Trade takeover

    E-Trade Financial Corp. shares soared Thursday on news of Morgan Stanley's planned $13 billion takeover of the online trading brokerage, and that means big money for Vanguard Group funds. The Malvern-based investment giant is the largest institutional shareholder of E-Trade, owning 25.3 million shares as of Dec. 31, according to federal filings. E-Trade's stock was up 24%, or $10.67 per share, as of noon Thursday — meaning Vanguard's position in the company increased overnight by more than $270.4 million.

  • Business
    TheStreet.com

    What Is Capital Gains Tax and When Are You Exempt?

    The subtraction of capital losses from capital gains is known as the net capital gain. That means one can offset the other, whether it's a gain offsetting a loss to make sure you still have a profit or a loss offsetting a gain to help pay less of a capital gains tax that year. To put it into numbers, let's say you have $5,000 of shares in one company and $2,000 of shares in another business.

  • Gold breakout’s while the stock market is rising should concern investors
    Business
    MarketWatch

    Gold breakout’s while the stock market is rising should concern investors

    Momentum investors, who are relentlessly pushing up stocks, are oblivious to the breakout in gold amid a relatively rare event. Because of that, prudent investors should pay attention. Please click here for an annotated chart of SPDR Gold Shares (GLD) a gold exchange traded fund.

  • What investors should look for in the market as coronavirus concerns grow
    Business
    Yahoo Finance Video

    What investors should look for in the market as coronavirus concerns grow

    After hitting record highs Wednesday, stocks dropped on Thursday as coronavirus concerns resurface. J.P. Morgan Private Bank Patrick Schaffer joins The Final Round to discuss what investors should look for in a volatile market.

  • Stocks fall as Bank of Japan warns of ‘grave’ coronavirus concern
    Business
    Yahoo Finance UK

    Stocks fall as Bank of Japan warns of ‘grave’ coronavirus concern

    “Huge uncertainty remains on how the spread of the new virus may affect the Japanese economy,” Kuroda told Japan's parliament. “We're watching the impact with grave concern and keeping a close eye on downside risks,” he said. Japan's Nikkei (^N225) closed nearly 0.4% in the red on Friday in the wake of much weaker-than-expected purchasing managers' index data from the country's manufacturing sector.

  • New Victoria’s Secret Owner, Sycamore Partners, Has a Storied History in Footwear: 4 Things to Know
    Business
    Footwear News

    New Victoria’s Secret Owner, Sycamore Partners, Has a Storied History in Footwear: 4 Things to Know

    It's the end of an era for Victoria's Secret, the lingerie giant that for 28 years has been under the wing of mall retail group L Brands. On Thursday, private equity firm Sycamore Partners announced that it would acquire a 55% stake in the company for $525 million. The deal, which takes Victoria's Secret off the public market at a valuation of $1.1 billion, is notable not only for its relatively modest size (L Brands' market capitalization has fallen from $29 billion at its peak in 2015 to around $6.5 billion today) but also for the brand's new owner.

  • Dow drops over 300 points on Fed comments, coronavirus worries
    Business
    Fox Business

    Dow drops over 300 points on Fed comments, coronavirus worries

    U.S. equity markets turned sharply lower Thursday midmorning as investors digested fresh comments from the Fed and rising fears over the coronavirus. The selling pushed the S&P 500 and the Nasdaq Composite off record highs and clipped over 300 points off the Dow Jones Industrial Average before giving back some of those losses. Fed Vice Chairman Richard Clarida told CNBC the market was too aggressive in pricing in a Fed rate cut later this year which investors including Keith Fitzgerald of Money Map Press cited as the catalyst for the sudden reversal in the equity markets.

  • Vanguard vs. Fidelity: Which Brokerage is Best?
    Business
    SmartAsset

    Vanguard vs. Fidelity: Which Brokerage is Best?

    If you're looking for a platform for investing, you may consider two of the largest brokerage firms, Vanguard and Fidelity. Vanguard, which has long stressed the value of low-cost investing, tends to focus on long-term investing, such as opening a retirement savings account or a brokerage account that can help investors build funds for a rainy day. On the other hand, Fidelity pursues a broader focus, one that includes retail investors as well as sophisticated traders.

  • Square Resets Its Base Count
    News
    Investor's Business Daily Video

    Square Resets Its Base Count

    Spectacular run in Square in 2017 and 2018 but not much from it in 2019. But don't count it out. Though rare, you do have many cases of former leaders coming back to lead again.

  • Business
    Benzinga

    Tim Seymour Compares Aurora Cannabis And Canopy Growth, Sees Path To Profitability

    Tim Seymour, CIO of Seymour Asset Management and co-host of CNBC's "Fast Money," joined Benzinga's PreMarket Prep on Thursday, ahead of his appearance at the Cannabis Capital Conference Feb. 24-25. He discussed the current situation in the cannabis space and compared and contrasted Canopy Growth Corp (NYSE: CGC) and Aurora Cannabis Inc (NYSE: ACB) after the companies reported mixed earnings. Aurora continues to see deceleration in their top line and their profitability, and frankly their gross margin.

  • Warren Buffett Poised to Address Missed Deals With Cash Pile Growing
    Business
    Bloomberg

    Warren Buffett Poised to Address Missed Deals With Cash Pile Growing

    Berkshire's struggle to find well-priced takeovers led it to open another path for putting money to work: The company loosened its buyback policy almost two years ago, but has repurchased only $4.1 billion of its shares since then. We're gradually getting more pessimistic about using our money,” Berkshire Vice Chairman Charlie Munger said in an interview last week. It's been a long time since we bought anything.

  • How Are Social Security Benefits Affected by Your Income?
    Business
    Investopedia

    How Are Social Security Benefits Affected by Your Income?

    Your Social Security benefits are determined by a number of factors, but your earned income over the course of your working life is probably the most important. How Social Security Benefits Are Calculated The Social Security Administration (SSA) keeps a record of your earned income from year to year, and the portion of your income that is subject to Social Security taxes is used to calculate your benefits in retirement. The more you earned while working (and the more you paid into the Social Security system through tax withholding), the higher your monthly benefit will be, up to a certain maximum.

  • Business
    TheStreet.com

    Jim Cramer: The Market Took a Breather. Expect More to Come

    Because the shoeshine man had finally picked a winner in Advanced Micro Devices . Consider these positives: first, Morgan Stanley bought E-Trade with stock, a smart move because E-Trade was coming in as a poor second to upstart Robinhood and had to do something. On the other hand, or other side of the trade, Morgan Stanley just reported the best quarter of all the brokerages and banks and what happened?

  • When Do People Retire on Average
    Business
    SmartAsset

    When Do People Retire on Average

    You can start collecting Social Security benefits at age 62, though you aren't yet considered full retirement age (FRA) at that time and will only collect 75% of your expected benefits. By comparison, if you wait until age 65 to begin collecting benefits, you'll receive 93.3% of your monthly benefit. The FRA is 66 for people born between 1943 and 1959 or 67 for those born in 1960 or later.

  • 10 Companies Owned by Alibaba
    Business
    Investopedia

    10 Companies Owned by Alibaba

    Alibaba is one of the three largest retailers in the world, regularly juggling for the top spot with Wal-Mart Stores Inc. (WMT) and Amazon (AMZN), depending on the source and the criteria. There are three main segments: an English-language portal, Alibaba.com, that connects sales between importers and exporters; a Chinese portal, 1688.com, that serves as a platform for China's in-country business trade, and a retail website, AliExpress.com, that connects buyers to small quantities of product at wholesale prices. Below are some of the other companies owned by Alibaba Group.

  • Just 9 Stocks Will Capture 20% Of Profit This Year, Analysts Say
    Business
    Investor's Business Daily

    Just 9 Stocks Will Capture 20% Of Profit This Year, Analysts Say

    There's a good reason just nine companies account for more than 20% of the S&P 500's value. Those same giants are also likely to haul in a fifth of the S&P 500's profits, too. Now that 2019 profit reports are largely in, analysts are compiling their views for 2020 profit.

  • Why bullishness on gold is likely to prompt a drop in prices in coming sessions
    Business
    MarketWatch

    Why bullishness on gold is likely to prompt a drop in prices in coming sessions

    When gold and gold stocks struggle in coming weeks, as I expect they will, it won't be because the COVID-19 threat has decreased. Instead, they will have been sabotaged by the excess bullishness that currently prevails among gold-market investors. To appreciate why, consider the average recommended gold market exposure level among several dozen short-term gold timers I monitor (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI).

  • Dow Jones Futures Fall After Healthy Stock Market Pause; First Solar, Zscaler, eHealth Lead Big Earnings Movers
    Business
    Investor's Business Daily

    Dow Jones Futures Fall After Healthy Stock Market Pause; First Solar, Zscaler, eHealth Lead Big Earnings Movers

    Dow Jones futures fell Friday, along with S&P 500 futures and Nasdaq futures, amid fears that the coronavirus is spreading, with bigger risks to the global economy. The stock market rally pulled back Thursday, but closed well off intraday lows. First Solar, Universal Display, eHealth, Zscaler, Dropbox, Appian and Texas Roadhouse were notable earnings movers after the close.

  • Business
    Barrons.com

    One of Virgin Galactic’s Bulls Issued a Warning for the Stock

    One of Virgin Galactic's bulls sounded a note of caution Thursday. MS) analyst warned investors that the stock might dip as he previewed the space start-up's coming earnings report. SPCE) (ticker: SPCE) reports numbers for the fourth quarter and full year on Tuesday, after the market closes.

  • You may not have as much in your 401(k) for retirement as you think
    Business
    MarketWatch

    You may not have as much in your 401(k) for retirement as you think

    A $100,000 or even $200,000 balance in a 401(k) plan might seem like a lofty amount of money — and it is — but it may not mean as much in your retirement as you think. As part of the new Secure Act, plan sponsors will have to show Americans how their account balances translate into monthly income. The new retirement law, which was passed in December, aims to provide investors with a clearer picture about whether or not they're on track to retire.

  • 3M will pay shoemaker Wolverine $55M to settle suit over Scotchgard chemicals
    Business
    American City Business Journals

    3M will pay shoemaker Wolverine $55M to settle suit over Scotchgard chemicals

    3M Co. and Wolverine World Wide Inc. have agreed to settle a lawsuit related to drinking water contamination in Michigan, which the maker of shoes, sneakers and work boots blamed on 3M "forever chemicals" used in its products In a statement late Thursday, Maplewood-based 3M (NYSE: MMM) said it would pay Wolverine (NYSE: WWW) $55 million "to support Wolverine's past and ongoing efforts to address PFAS remediation" in Michigan. 3M has already accounted for the legal costs: The settlement was part of a larger legal charge related to PFAS lawsuits taken during 3M's fourth quarter.