Freedom Line Blog

Avalara, a company that claims to provide “the fastest, easiest, most accurate and affordable way to manage sales tax compliance,” has released an entertaining video highlighting some of the craziest state sales tax rules in America.

In Colorado, according to Avalara, paper cups aren’t subject to state sales taxes, but the straws and lids needed to make them portable are.

Outdoor pool cleaning services are exempt from sales taxes in Nebraska. Indoor pool cleaning services, however, are taxed in the Cornhusker State – even though the same companies generally clean both indoor and outdoor pools.

Perhaps the dumbest sales tax rule in the U.S. comes from New York where there are no sales taxes on bagels…unless the bagel is sliced in half.

Dumb tax rules such as these increase prices for business (who have to hire companies like Avalara to comply with the litany of confusing sales tax regulations) and consumers. Instead of sticking some goods and services with punitive sales tax rates and creating loopholes to exempt others from being taxed at all, states should work to ensure sales taxes are as low as possible across the board on everything.