Sales Tax on the 12 Days of Christmas
A medieval song specifies the the gifts a lover gives his love on the days from Christmas Eve to Epiphany (January 6th, or Twelfth Night,the official end of Christmas). You may not know them all by heart, but they’ll be familiar:
- A partridge in a pear tree
- Two turtledoves
- Three French hens
- Four calling birds
- Five gold rings
- Six geese a-laying
- Seven swans a-swimming
- Eight maids a-milking
- Nine ladies dancing
- Ten lords a-leaping
- Eleven pipers piping
- Twelve drummers drumming
But how much sales tax will you pay?
There’s no simple answer. It depends on the state, county, and town the gifts are delivered to. Each jurisdiction may have different rates — and different rates for different items.
For example, all that livestock may be exempt from sales tax if you can claim to be a farmer raising birds as part of your business. If they’re pets, most states will charge sales tax.
If you’re paying your milkmaids minimum wage as employees, they’re a bargain at just $58.00, with no sales tax added. If you hire a milking service, though, you may have to pay sales tax. Services are taxable in some states. And of course different services are taxable in different jurisdictions.
If you know your local sales tax rate, you could predict the sales tax punch by multiplying the total by that rate. However, you might need to buy some of the items from remote sellers. If you don’t have a local purveyor of swans, you’ll probably have the go online. Don’t think that will save you from sales tax. Almost two dozen states have enacted laws making remote sellers collect and remit sales tax.
If your state isn’t one of those, remember that you’re still on the hook for use tax, the twin of sales tax that consumers owe when they shop online. Those swans come to $13,125, so chances are that purchase will not be overlooked.
You may not be able to predict the sales tax burden, but it will probably be considerable!
Bloomberg's 19th annual Bloomberg Tax Survey of State Tax Departments tells us that 33 of the 50 states have already made tax changes in response to the Wayfair decision. That Supreme Court ruling struck down Quill, the case that said sellers didn't...read more
Ever since the Supreme Court's Wayfair decision made it possible for states to collect sales tax from sellers with no physical nexus in their states, there has been concern that states would go after retroactive tax collection. Now California has become...read more
A Texas academic recently claimed that remote sellers complying with sales tax regulations in Texas would pay "about a penny" per transaction. That's crazy talk. If your company needs to comply with sales tax regulations in multiple states across the...read more