One example of the many sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. exemptions offered by states is an exemption for clothing. Eight states fully or partially exempt clothing in general. Clothing is fully exempt in Minnesota, New Jersey, Pennsylvania, New Jersey, and Vermont. In three states, clothing up to a certain cap is exempt (in Massachusetts the cap is $175, in New York it’s $110, and in Rhode Island it’s $250). Connecticut will exempt clothing and footwear under $50 starting on June 1, 2015.
The 37 remaining states (plus D.C.) with a state sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. include clothing in the tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. , subject to a few exceptions. Ideally, the sales tax should apply to all final retail goods and services – including clothing. Check out this week’s map to see where your state falls.
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Previous coverage here.
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