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5 goods you would not expect to be taxed


5 goods you would not expect to be taxed

Excise taxes are normally levied on goods considered unhealthy for us, but these 5 goods might surprise you.

Brandon Lafving
by Brandon Lafving, IRS contributor (@TechDragoon)

Also known as "sin" taxes, excise taxes are instruments the government uses to skew consumer behavior away from damaging goods, and toward beneficial products. Alcohol, gas and tobacco products are some of the most heavily taxed goods out there. The Internal Revenue Service also offers tax credits for biodiesel, energy efficient lighting and other eco-friendly products.

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Some of these Federal excise taxes might surprise you, however.

  1. Indoor Tanning – A 10% excise tax is currently levied on getting your body bronzed inside. Is indoor tanning bad for your body? According to the Food and Drug Administration (FDA), "…the ultraviolet (UV) radiation from these devices [sunlamps and tanning beds] poses serious health risks." The indoor-tanning excise tax in one of the most recent to be instituted (2010).
  2. Bows, Quivers, Broadheads and Points – Bows and arrows that are designed to kill are taxed by 11%. The tax is placed on the manufacturer and is based on the final asking price of the good. But I need to ask, why bows and not guns? Why arrows and not bullets?
  3. Sport Fishing Equipment – Superior fishing equipment is subject to a 10% tax, which is applied to fishing rods, reels, fly fishing lines, spears, spear guns and spear tips. The tax is also levied on fishing accessories, such as fish stringers, creels, bags, baskets and other containers for holding fish, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, dressing lines. The list continues for terminal tackle, artificial lures and baits, hooks, sinkers and most other types of bait you could think of.
  4. Flights – Every time you fly, you pay a 7.5% excise tax, including layovers or other charges related to aircraft waiting time. Even though gasoline is already taxed, air travel is taxed again.
  5. Tires – Tires with a maximum-load rated capacity of more than 3,500 pounds are taxed by roughly 1 cent for every pound capacity over 3,500 pounds. So if you make a 3,600-pound capacity tire, you have to pay the IRS $1. If you make a 4,500-pound capacity tire, you pay $10. The tires tax falls in line with a greater tax on heavy trucks.

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For an in-depth explanation regarding how these taxes are instituted and how they impact prices, see my previous article.

The full list of Federal excise taxes can be found on Publication 510.