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America's wackiest taxes
You might pay taxes on illegal drugs, Pepsi, playing cards, and being a star, and that's not all.
February 22, 2005: 12:09 PM EST
By Jeanne Sahadi and Les Christie, CNN/Money writers

NEW YORK (CNN/Money) - History is littered with odd tax schemes. William Pitt the Younger introduced a tax on windows in Britain. Peter the Great taxed souls, and Nero, urine.

Let no man say that we here in America cannot compete for oddity of tax laws. We have some really weird assessments on the books.

In certain states and cities, you'll pay special taxes for buying a deck of cards, possessing illegal drugs, and, possibly, buying things from naked people.

Here are a dozen peculiar state and local taxes, as noted by tax information publisher CCH Inc. and the Tax Foundation, a nonprofit tax policy research group.

Illegal drug tax: On Jan. 1, Tennessee became the latest of 23 states to institute a tax for possession of illegal drugs. Usually, you have to be in possession of a minimum quantity, say over 42.5 grams of marijuana in North Carolina, to be subject to the tax.

In Tennessee, when you acquire an illegal drug (even "moonshine"), you have 48 hours to report to the Department of Revenue and pay your tax, in exchange for which you'll receive stamps to affix to your illegal substance. The stamps serve as evidence you paid the tax on the illegal product.

Don't worry that you might get in trouble for admitting you have enough drugs to fuel a rave party for years. You need not provide identification to get the stamps and it's illegal for revenue employees to rat you out.

Still, next door in North Carolina, which has had a similar law for 15 years, only 79 folks have voluntarily come forward since 1990, according to the Department of Revenue. Most were thought to be stamp collectors, or perhaps just high. Another 72,000 were taxed after they were already busted.

North Carolina has collected $78.3 million thus far, almost all from those arrested and found without stamps.

Flush tax: In 2004, Maryland began charging homeowners and businesses for producing wastewater. The funds will be used to help protect Chesapeake Bay waters.

Maryland will add $2.50 a month to the sewer bills of residents hooked up to treatment systems. It will also assess an annual charge of $30 to homeowners with their own septic systems, even though many believe these residents add little to the stream of pollutants that have damaged the Chesapeake.

Virginia appears poised to enact a similar flush tax of $1 a week per household.

Sex sales tax: Sin got pricier in Utah last July, when owners of sexually explicit businesses where "nude or partially nude individuals perform any service" began paying a 10 percent sales and use tax on admission and user fees as well as the sales of merchandise, food, drink, and services.

That would be on top of the 4.75 percent sales tax the state already imposes on most transactions, sexually explicit or not. Not that the measure will raise much money. So far only one or two businesses in staid Utah are actually wild enough to be subjected to the tax.

Jock tax: This is a tax on income earned by athletes, entertainers (OK, not just jocks), and their various entourages, including non-athletic or non-performer employees. Generally, any money player or performer earns while playing in that particular city or state gets taxed.

California levied the first jock tax in 1991, on athletes from Chicago, right after the Chicago Bulls beat the L.A. Lakers. (Chicago quickly responded in kind.) Today, most states with a professional sports team impose a jock tax.

William Ahern, of the Tax Foundation, said a DC United soccer player received tax forms from 10 different states. The player was no Alex Rodriguez. "The guy makes $26,000 a year," says Ahearn. "The jock taxes he owed varied from $200 to $2."

Sparkler and novelties tax: In West Virginia, businesses selling sparklers and novelties pay a special fee on top of the state's 6 percent sales tax. The novelties, according to the West Virginia State Tax Department's information sheet on sparklers and novelties, include: Explosive caps designed to be fired in toy pistols; snake and glow worms and; trick noisemakers which produce a small report designed to surprise the user.

Playing card tax: If you want a deck of cards in Alabama, be prepared to shell out an extra dime. The state government has levied a 10-cent tax on the purchase of a playing deck that contains "no more than 54 cards," plus the retailer must pay an annual license tax of $3 and a fee of $1, according to the Alabama Department of Revenue.

Blueberry tax: Like fresh, wild blueberries? If they come from Maine, you may be paying a bit of a premium. Anyone who grows, purchases, sells, handles or processes the fruit in the state is subject to a penny-and-a-half-per-pound tax.

Wagering tax: Speaking of cards – and bets – most people know they have to pay tax on their gambling winnings. But some places, including Pennsylvania, West Virginia, Illinois, and Oklahoma, exact a wagering tax on casino or track owners, whether you gamble or not. It can get passed onto customers through the cost of casino amusements.

Illinois forces casinos to charge a $2 admission price, which is essentially a tax since it must be remitted to the city and state.

Fur clothing tax: Keeping comfy during Minnesota winters can cost you. Businesses in the state must pay a 6.5 percent tax on the total amount received for the sale, shipping, and finance charges associated with the purchase of clothing in which fur accounts for three times more of the garment than the next most valuable material.

Most types of clothing in Minnesota are sales-tax-free, so if you want to keep warm switch to "leather, suede, or other animal skins where the hair, fleece or fur fiber is completely removed," as the Minnesota Department of Revenue Fur Clothing Tax instructions form puts it,

Fountain soda drink tax: This one hails from Chicago. If you buy a "fountain soda drink," you'll pay a 9 percent tax. If you buy the same soda in a bottle or a can, you'll only pay 3 percent.

Amusement tax: Ever wondered about the extra tax you pay on stadium seats? That's the amusement tax, often levied at both city and state levels. Most states, including Massachusetts, Virginia, and Maryland, and cities like New Orleans, have amusement taxes on tickets sold at any venue with more than 750 to 1,000 seats.

Amusing, isn't it?

Tattoo tax: As of last July, anyone in Arkansas wanting to get a eagle etched on their abs or a nose ring notched in their nostrils will have to pay an additional 6 percent, as the state included tattooing and body piercing in its list of services subject to sales taxes. Electrolysis treatments count, too.

To make this a baker's dozen, we'll throw in a freebie: Tennessee imposes a litigation tax. The tax varies with the offense, with the cheapest being $1 for a metered parking violation.

No sum is too small for the tax man.  Top of page

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