Some of the Most Unique Taxes in the World

While most tax systems are built around familiar concepts like income and sales, governments across the globe have also implemented levies that are anything but ordinary. These unique taxes can single out specific products, aim to influence public behavior, or arise from distinct historical justifications. Understanding these outliers reveals the targeted nature of fiscal policy and shows how taxation can be a tool for more than just funding government operations.

Taxes on Specific Consumer Goods

The world of taxation includes levies on very specific consumer goods, where subtle legal definitions can create different tax treatments for similar items. The rationale for these taxes varies, from targeting perceived luxuries to funding industry-specific initiatives.

In New York, a “bagel tax” exists due to how the state defines prepared foods. State tax regulations differentiate between unprepared food items, which are not subject to sales tax, and prepared foods, which are taxable. An unsliced bagel sold whole is considered a basic food item and is tax-exempt. However, once a vendor slices that bagel, it is considered “prepared” and becomes subject to the state’s sales tax, which can be as high as 8.875% in New York City.

Illinois provides another example with its “candy tax.” The state defines “candy” in a way that excludes any product containing flour. This means a chocolate bar like a Twix, which has a cookie layer, is not legally candy and is taxed at the lower 1% rate for groceries. In contrast, a flourless chocolate bar is defined as candy and is subject to the state’s higher 6.25% general merchandise sales tax. This creates a situation where two similar confectionery items on a store shelf are taxed at vastly different rates due to a single ingredient.

The state of Maine levies a tax on one of its most famous agricultural products: wild blueberries. A tax of 1.5 cents per pound is imposed on all wild blueberries processed in or shipped out of the state, with the processor or shipper being responsible for payment. The revenue is specifically earmarked to support the wild blueberry industry through research and marketing, acting as a self-funding mechanism.

In Arkansas, a specific 6% sales tax is imposed on the services of tattooing and body piercing. This tax, established in 2005, applies to the gross receipts from these services. According to state regulations, while the service itself is taxed, items like the ink and jewelry used in the procedures can be purchased tax-exempt by the service provider for resale.

Taxes Designed to Influence Behavior

Taxation is not always just about raising revenue; it is often used as a tool to shape public behavior and achieve social or health-related goals. These taxes are designed to discourage activities deemed harmful to individuals or society by increasing their cost. By doing so, governments aim to reduce consumption and mitigate negative consequences.

A federal excise tax on indoor tanning services was implemented as part of the Affordable Care Act in 2010. This provision levies a 10% tax on tanning services using ultraviolet lamps, with the goal of discouraging an activity linked to an increased risk of skin cancer. The tax is collected by the service provider and remitted to the IRS using Form 720.

Several U.S. cities have implemented sugar-sweetened beverage taxes to address public health concerns like obesity and diabetes. These are excise taxes levied on distributors, often calculated on a per-ounce basis of 1 to 2 cents. Revenue from these taxes is often dedicated to funding community health programs and education.

To combat environmental pollution, many municipalities have introduced taxes or fees on single-use plastic bags. The fee, often around 5 cents per bag, is collected by retailers at the point of sale. Revenue is directed toward environmental initiatives, such as funding cleanup programs or distributing reusable bags.

These modern behavioral taxes follow the historical precedent set by long-standing “sin taxes” on products like alcohol and tobacco. These were also established to raise revenue and deter consumption of goods considered detrimental to health.

Taxes Based on Property and Place

Some of the most unique taxes are tied not to what a person buys, but to what they own and where they own it. These levies are based on specific features of a property or its location, blending historical precedent with modern environmental concerns.

One of the most famous historical examples is the window tax, implemented in England, Scotland, and France during the 17th and 18th centuries. First introduced in England in 1696, the tax was a proxy for a property owner’s wealth, operating on the assumption that wealthier individuals lived in houses with more windows. The tax was progressive, with a flat rate on houses and additional charges for properties exceeding a certain number of windows. The direct consequence was that property owners began bricking up windows to reduce their liability, which had significant negative effects on public health.

A modern counterpart is Maryland’s “flush tax,” formally known as the Bay Restoration Fee. This statewide fee is charged to property owners connected to a sewer system or a private septic system, with an annual cost of $60 for most users. The revenue is dedicated to upgrading the state’s wastewater treatment plants to reduce pollution in the Chesapeake Bay.

Some municipalities in countries like France and Greece have turned to technology to identify undeclared swimming pools. In France, tax authorities have used artificial intelligence to scan satellite imagery to find pools that were not reported by homeowners. Since a swimming pool increases a property’s rental value, it also increases the property tax owed. This use of technology represents a modern approach to ensuring that a property’s assessed value reflects its amenities.

Taxes on Individuals and Professions

Beyond taxes on goods and property, some levies are based on who a person is or what they do for a living. These taxes are triggered by an individual’s personal status or profession and are distinct from general income taxes.

The “jock tax” is a form of income tax levied by states and cities on the income earned by visiting professional athletes, entertainers, and other high-income performers. The calculation is based on a “duty days” formula, which allocates a portion of the individual’s total salary to the taxing jurisdiction. This method divides the number of duty days spent in that state by the total number of duty days in the year. That allocated income is then taxed at the state or city’s non-resident income tax rate.

Historical bachelor taxes were levied on unmarried men at various times in places ranging from ancient Rome to the United States in the early 20th century. For example, England’s Marriage Duty Act of 1695 imposed a tax on bachelors over the age of 25. The rationale was a mix of social engineering to encourage marriage and a way to raise revenue from men who did not have the financial responsibilities of supporting a family.