Selecting the Perfect Valentine’s Day Gift – Love Can Be Taxing

Wolters Kluwer Tax & Accounting Takes a Look at Sales Taxes and
Popular Valentine’s Day Gifts

–(BUSINESS WIRE)–Wolters Kluwer Tax & Accounting:

What: Selecting the perfect Valentine’s Day gift is always
difficult, and taxes are unlikely to be the primary motivation behind
the gift selected. Still, different states can treat the taxes on the
same type of gift very differently.

Why: States do not impose sales taxes on all goods and services
in a uniform manner or at a uniform rate. A few states do not impose
sales taxes. Many states do not tax services. Many states have an
exemption for taxes on food, but they often define what is included in
the exemption very differently, especially with respect to candy. Here
is a look at some popular Valentine’s Day gifts and some of those
differences in the sales tax treatment.

  • Candy, and in particular chocolate, remains a popular Valentine’s Day
    gift choice. Some states have adopted a uniform definition of candy,
    but many use their own unique definition. A few states separately
    address chocolate
  • Candy is subject to sales tax in 29 states and exempt from sales tax
    in 16 states and the District of Columbia
  • Many states do not specifically address jewelry, making it subject to
    the general sales tax rate. In those states that do mention jewelry,
    it is taxable or even subject to a higher tax rate
  • Flowers are generally taxable; however, a couple of states have
    limited exemptions for flowers from certain sources. A few states have
    a sales tax exemption for food-producing plants
  • Dining out, or “prepared food” in sales tax speak, is pretty uniformly
    taxable even if there is otherwise an exemption for other food, but
    again definitions vary
  • A day at a spa is a service, and many states do not tax services. In
    the half-dozen states that specifically mention spas, some tax them
    and some do not
  • And, if a pet is the object of your Valentine’s Day attention, the
    gift is likely to be taxable

Who: Carol Kokinis-Graves, JD, is an attorney and senior tax
analyst for Wolters Kluwer Tax & Accounting, specializing in tracking,
analyzing and reporting issues regarding state and local sales and use
taxes. She is also an expert in e-commerce transactions involving state
taxes.

Contact: To arrange interviews with Carol Kokinis-Graves or other
tax experts from Wolters Kluwer Tax & Accounting on this or any other
tax-related topics, please contact:

MARISA WESTCOTT
212-771-0853
marisa.westcott@wolterskluwer.com

Contacts

MARISA WESTCOTT
212-771-0853
marisa.westcott@wolterskluwer.com