Product Taxability Sales Tax 101

Is Your Christmas Tree Taxable?

by Jennifer Dunn

It’s that time of year when we head out of the lot to pick the perfect Christmas tree – or head over to the nearest store and buy a pre-lit one. I don’t blame you. Untangling these little guys is never fun!

Christmas tree taxability

But all this Christmas tree purchasing begs one question:

Do you Have to Pay Sales Tax on Your Christmas Tree?

The short answer is: yes.

Your Christmas tree is “tangible personal property.” Tangible personal property is almost always taxable. The only time it isn’t taxable is when there is some sort of exemption. Sales tax exemptions vary from state to state and you can find links to what each state considers sales tax exempt by choosing your state on this sales tax map.

Speaking of sales tax exemptions, you’ll notice that states tend to give exemptions to industries they are trying to support. For example, many states in the Midwest exempt agricultural equipment. Many other states, who are trying to prevent losing manufacturing to other states are countries, make manufacturing equipment sales tax exempt.

Last year, New York took the first steps in protecting and promoting another industry… The Christmas tree industry!

Times May be Changing

Pennsylvania lawmakers recently introduced a bill to make fresh cut Christmas trees tax exempt. State Representative Seth Grove cited that “Christmas trees are one of the few agricultural products [in Pennsylvania] not exempt from sales tax.”

And a proposed New York Senate Bill S06232 would make fresh cut Christmas trees non-taxable from November 1st to December 31st. Consider it a very long sales tax holiday.

The purpose of the bill, according to it’s sponsor, is to “level the playing field for farmers and consumers alike” and would “help make New York State [the] nation’s capital for fresh Christmas tree shopping.”

New York’s tax exempt period is designed to protect Christmas tree growers against the twin threat of artificial trees or New Yorkers heading across state lines to acquire their fresh tree.

Though the law has been kicking around the New York state house all year, it hasn’t passed yet, so it remains to be seen whether you can buy a tax free Christmas tree in New York state next year.

In conclusion, as it stands you’ll most likely find yourself paying sales tax on your Christmas tree this year. Maybe next year the taxman – at least in New York – won’t be such a Grinch!

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