Thomson Reuters Indirect Tax Highlights 2012 Quirky Tax Laws
Strange Laws Underscore Need for Technology and Expertise to Manage Complex Indirect Tax Process
It’s no secret that the indirect tax and value-added tax landscape is complicated and ever-changing. To help corporations navigate these challenging waters, Thomson Reuters provides a trusted indirect tax software platform used by leading global companies.
Companies that have deployed indirect tax solutions from Thomson Reuters benefit from a proven technology infused with critical, timely tax content, which enables them to seamlessly comply with tax changes immediately.
To illustrate this point, we’ve gathered a selection of a few of the "quirky" sales and use tax highlights from 2012:
- In Illinois, fans of Whoppers malted milk balls are in luck. The Illinois candy tax applies to all candies, unless they contain flour, like Whoppers (IL FY 2010-01 July 2009; Illinois DOR Informational Bulletin).
- While food and food products are typically tax exempt, New York has deemed vegan edible gummy drinking glasses taxable. Under the current ruling, the glasses were deemed a confection and therefore taxable under current sales and use tax law (Advisory Opinion issued October 24, 2012).
- Boat enthusiasts are rejoicing in Maine as a result of the new tax exemption for parts and supplies (except sails, rope, rigging and masts) 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).
- Wine lovers in Maryland are now subject to double taxation should they wish to bring their own bottle of wine to their favorite restaurant. Under the new ruling, residents are taxed 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).
- Retiring just got sweeter for residents of Sitka, Alaska, who are now exempt from sales tax for the purchase of goods, services and rentals after reaching the ripe age of 65 (effective October 1, 2012).
- In Connecticut, not all diapers are created equal. Adult diapers are tax exempt, but children’s diapers are taxed.
- In Alabama, playing card decks that contain less than 54 cards are charged an addition $0.10 excise tax. To ensure compliance, each taxable deck must have “revenue stamps” affixed to the individual package. The stamps must be affixed in such manner that their removal will require continued application of water or steam. All taxable playing cards found in the possession of any person, firm, corporation, club or association without having stamps affixed in this manner are subject to confiscation (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §573; Acts 1951, No. 978, p. 1653;).
- This last one is not really an odd tax law, but rather a twist on a “normal” tax law turned strange by a business owner. A theater owner in Spain came up with a unique solution to falling ticket sales after the VAT on admissions to theaters was raised to 21 percent this summer: carrots. Since vegetables are subject to a reduced rate (currently 4 percent), the theater has transformed itself into a produce stand of sorts. Now when customers opt to buy their carrots from the theater for a mere $16, they are treated to a free theatrical performance.
For more information on ONESOURCE Indirect Tax, visit: http://onesourceindirecttax.com