What Are the Weirdest Taxes in the United States?

While most taxes are straightforward, applied to income or common purchases, state and local laws have created some unique methods of generating revenue. These taxes often target particular items or activities with a level of detail that can seem unusual. Exploring these fiscal oddities reveals how creatively governments can define what is taxable, offering a glimpse into the specific priorities and economic strategies of different jurisdictions.

Unusual Taxes on Food and Drink

The distinction between a grocery item and a prepared meal is a common source of tax complexity, as seen in New York’s treatment of bagels. A whole, unaltered bagel is considered a basic food item and is exempt from sales tax. The moment a store employee slices that bagel, it is transformed into a “prepared food” and becomes subject to sales tax. This is because altering a food item is considered a service, shifting the product from a simple grocery to a ready-to-eat meal.

Illinois provides another example with its “candy tax.” Candy is taxed at the state’s higher general merchandise rate, while most groceries are taxed at a much lower 1% rate. The peculiarity lies in the legal definition of “candy,” which does not include any preparation containing flour. This means a chocolate bar is candy, but a Twix or Kit Kat bar, because they contain a flour-based cookie, are taxed as groceries.

In Maine, the wild blueberry industry is supported by a unique tax of 1.5 cents per pound on all wild blueberries grown and processed in the state. This tax is paid by the growers and processors, not the consumer at the checkout counter. The revenue generated is managed by the Wild Blueberry Commission of Maine and is used to fund research, development, and promotion of the state’s wild blueberry crop.

A tax in Pennsylvania targets the air dispensed from vacuum and vending machines. While atmospheric air is not taxable, the state has applied its sales tax to the service of providing compressed air. This means the money paid to a coin-operated machine at a gas station to fill your tires is subject to sales tax because the customer is paying for the use of the machine, which is a taxable service.

Taxes on Entertainment and Recreation

Some of the most specific taxes are reserved for leisure items. In Alabama, anyone purchasing a standard deck of playing cards must pay a state tax of 10 cents per deck. This is an excise tax that must be evidenced by a physical stamp affixed to the package. Retailers who sell playing cards are also required to pay a separate annual license tax.

West Virginia levies a special 12 percent safety fee on powerful fireworks, while less potent items like sparklers and other novelties are subject only to the state’s standard sales tax.

A more targeted tax exists in Minnesota, which imposes a special gross receipts tax on the sale of clothing made from real fur. This tax applies to retail sales of articles where fur is the primary component, distinguishing them from other types of clothing which are exempt from sales tax in the state. If a Minnesota resident purchases a fur garment from outside the state for use within Minnesota, they are still liable for a corresponding use tax.

Taxing People and Their Professions

Beyond taxing goods, some laws target individuals based on their profession. The “jock tax” is an income tax levied by states and cities on non-resident professional athletes. This tax applies to the portion of their income earned while performing duties, such as playing games or practicing, within that specific jurisdiction. The calculation relies on a “duty days” formula, which divides the number of days an athlete worked in the taxing state by the total number of work days in their season to determine the taxable income percentage.

This practice gained national attention in 1991 after California taxed the income earned by Chicago Bulls players during the NBA Finals. In response, Illinois enacted its own retaliatory tax, and the practice quickly spread. Today, nearly every state with an income tax has some form of jock tax, creating a complex filing situation for many professional athletes.

As a historical footnote, Missouri briefly implemented a “bachelor tax” in 1821. The law required all unmarried men between the ages of 21 and 50 to pay an annual tax of $1. The tax was intended to encourage marriage and raise revenue but proved unpopular and was repealed just one year later.

Taxation of Illicit Activities

Perhaps the most counterintuitive taxes are those levied on illegal goods. Several states, including Tennessee, have enacted laws requiring dealers of illegal drugs to pay taxes on their illicit inventory. The law established an excise tax on controlled substances, with rates such as $50 per gram of cocaine and $3.50 per gram of marijuana. To comply, a dealer would need to anonymously purchase tax stamps from the state’s revenue department and affix them to the products.

The purpose of such a law is not to legalize the drug trade but to create an additional legal tool for prosecutors. If an individual is arrested for drug trafficking without the required stamps, they can be charged with tax evasion in addition to the underlying criminal offense. This provides another avenue for conviction and allows the state to seize assets to cover the unpaid tax liability.

Compliance is virtually nonexistent, and the stamps are more often purchased by novelty collectors. The primary function of the tax is realized after an arrest, serving as a mechanism to levy financial penalties. Although Tennessee’s Supreme Court later found its specific law unconstitutional, the concept highlights a strange intersection of tax policy and criminal law.