Reading Between the Numbers . . . Providing Knowledge, Insight, Experience and Creativity for our Clients' Benefit.

Visit our blog frequently to read our take on developments and news about taxes, accounting, financial and retirement planning.

Strange and Funny Tax Laws Throughout History

Tax season concluded late this year, with the filing deadline on July 15th. Between the COVID-19 pandemic and the economic instability that resulted from it, we are all a little stressed.

 

To lighten the mood, we decided to put together a list of funny and strange tax laws that have been levied throughout history. We’ve also included some strange tax laws that are still in place today.

the-new-york-public-library-kAJLRQwt5yY-unsplash (1)

In history

In the past, governments taxed anything they could to make more revenue. This led to some very strange and interesting tax laws. Here are some of our favorites:

  • In 1660, England placed a tax on fireplaces, which drove the population to cover their fireplaces with bricks to conceal them. The law was repealed in 1689.

  • In 1705, Peter the Great placed a tax on beards in Russia, hoping to get more men to adopt a clean-shaven appearance that was common in Western Europe.

  • In 1696, England put a tax on windows, which taxed houses based on how many windows they had. The result of this was housing with fewer windows, which in turn caused health issues. Despite this, the law was not repealed until 1851.

  • In 1712, England passed a tax on printed wallpaper. Builders started hanging plain wallpaper, then painted designs on it to dodge the tax.

  • Japan imposed a tax on whiskey that was based on the percentage of alcohol by volume. European whiskey paid the price on this because they were not allowed to dilute their whiskey. Japanese makers did dilute their whiskey, so they had the advantage.

 

Today

There are still some strange laws floating around today. Most of these examples are laws specific to states in America with a few exceptions. Check them out:

  • England has a tax on televisions. Everyone who has a television at home has to pay a yearly fee, which is called a television license fee. That fee is currently £157.50 ($197.96 USD) a year and £53($66.61) for black and white TV sets. This tax is used to find the BBC news service. If a blind person owns a TV, they only have to pay half the tax. You face a fine if you don’t pay the fee.

  • NYC has a special tax for prepared foods and for food. So something like a sliced bagel is taxed as both food and as a prepared food.

  • Tennessee began requiring drug dealers to anonymously pay taxes on the illicit substances they sell back in 2005. Alabama taxes the sale of illicit drugs by requiring sellers to have tax stamps. If someone from Alabama is caught with a large quantity of drugs, they will not only face drug charges, but also tax evasion charges.

  • In California, you pay a 33% tax on fruit you buy from a vending machine.

  • Double amputees in Oregon get a $50 tax credit.

  • If you’re over 100 in New Mexico, you are tax exempt, unless you are a dependant.

 

Why do you think these laws were created? What’s the story behind them? Did you enjoy the list?

 

Collecting unemployment? Here’s How It Will Impact Your Taxes

morning-brew-EWyE-0hYsJo-unsplash

Are you collecting unemployment? As of June 2020, the unemployment rate in America was at an estimated 13.3%. That’s down from 16% and those numbers don’t even reflect the scale of how many have had their income cut or lost their job due to the COVID-19 virus.

We’ve just passed the July 15 extended tax filing deadline. With that behind us, it’s time to focus on the 2020 tax season. Being already July, that means that the tax season is half over already. Time flies when you’re fighting a pandemic.

One of the biggest issues in the 2020 tax season will be the massive number of people that were on unemployment for several months during 2020. The number of people on unemployment broke records this year.

For many, that means that they’ll have to pay taxes off their unemployment income. We’ll break down how, why, who, and what you’ll need to know about paying taxes on unemployment so you aren’t surprised come April 2021.

What options do I have to avoid a large federal tax bill next year?

You have a couple different options to avoid a large tax bill for the 2020 fiscal year. We’ll break them down for you.

Automatically Withheld  

This is the easiest option for many. When you sign up for unemployment benefits, you’ll likely have the option to get taxes withheld.

If not, you can fill out a Form W-4V, which will ensure you’re being properly taxed on your unemployment benefits.

Estimated Quarterly Payments  

Freelancers and sole proprietors always have the option to pay taxes quarterly so they aren’t hit with a massive tax bill come April. You can do the same thing with unemployment benefits.

The catch is, you need to estimate how much you owe on your own using a IRS Form 1040-ES. If you underpay these quarterly taxes, you may be penalized. While a massive tax bill in April may seem daunting, consider if you need the money you would pay on quarterly taxes would be better used for rent, food, etc. It’s not worth not being able to afford housing, utilities, etc just to ease your tax burden next year.

Who doesn’t have to pay state taxes on unemployment?

There are a handful of states where unemployment income is not considered income. Here are the states that directly wave unemployment for state taxes:

  • California

  • Montana

  • New Jersey

  • Pennsylvania

  • Virginia

Then, there are nine states without a broad income tax that don’t tax jobless benefits. They are:

  • Alaska

  • Florida

  • Nevada

  • New Hampshire

  • South Dakota

  • Tennessee

  • Texas

  • Washington

  • Wyoming

If you are in one of these states, it’s likely you won’t have to pay state taxes on your unemployment. Be sure to check with a tax professional to make sure.

Strange and Funny Tax Laws Throughout History

the-new-york-public-library-kAJLRQwt5yY-unsplash (1)

Tax season concluded late this year, with the filing deadline on July 15th. Between the COVID-19 pandemic and the economic instability that resulted from it, we are all a little stressed.

To lighten the mood, we decided to put together a list of funny and strange tax laws that have been levied throughout history. We’ve also included some strange tax laws that are still in place today.

In history:

In the past, governments taxed anything they could to make more revenue. This led to some very strange and interesting tax laws. Here are some of our favorites:

  • In 1660, England placed a tax on fireplaces, which drove the population to cover their fireplaces with bricks to conceal them. The law was repealed in 1689.

  • In 1705, Peter the Great placed a tax on beards in Russia, hoping to get more men to adopt a clean-shaven appearance that was common in Western Europe.

  • In 1696, England put a tax on windows, which taxed houses based on how many windows they had. The result of this was housing with fewer windows, which in turn caused health issues. Despite this, the law was not repealed until 1851.

  • In 1712, England passed a tax on printed wallpaper. Builders started hanging plain wallpaper, then painted designs on it to dodge the tax.

  • Japan imposed a tax on whiskey that was based on the percentage of alcohol by volume. European whiskey paid the price on this because they were not allowed to dilute their whiskey. Japanese makers did dilute their whiskey, so they had the advantage.

Today:

There are still some strange laws floating around today. Most of these examples are laws specific to states in America with a few exceptions. Check them out:

  • England has a tax on televisions. Everyone who has a television at home has to pay a yearly fee, which is called a television license fee. That fee is currently £157.50 ($197.96 USD) a year and £53($66.61) for black and white TV sets. This tax is used to find the BBC news service. If a blind person owns a TV, they only have to pay half the tax. You face a fine if you don’t pay the fee.

  • NYC has a special tax for prepared foods and for food. So something like a sliced bagel is taxed as both food and as a prepared food.

  • Tennessee began requiring drug dealers to anonymously pay taxes on the illicit substances they sell back in 2005. Alabama taxes the sale of illicit drugs by requiring sellers to have tax stamps. If someone from Alabama is caught with a large quantity of drugs, they will not only face drug charges, but also tax evasion charges.

  • In California, you pay a 33% tax on fruit you buy from a vending machine.

  • Double amputees in Oregon get a $50 tax credit.

  • If you’re over 100 in New Mexico, you are tax exempt, unless you are a dependant.

Why do you think these laws were created? What’s the story behind them? Did you enjoy the list?

 

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.