Taxes Blog

Finance Blogs » Taxes » Sales-tax-free Old Glory

Sales-tax-free Old Glory

By Kay Bell · Bankrate.com
Wednesday, July 2, 2014
Posted: 3 pm ET

July 4th is my favorite holiday. No, it's not the fireworks. It's because it came about because of taxes, or rather because of taxation without representation.

© StacieStauffSmith Photos/Shutterstock.comYou know the story. The Boston Tea Party. The Declaration of Independence. Betsy Ross and the Stars and Stripes.

The connection between taxes and our flag continues today in many states.

Flag sale tax exemptions

The sale of U.S. flags, along with state flags, is tax free in 10 states. They are Connecticut, Florida, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, West Virginia and Wisconsin.

Flag sales are tax free in California and Vermont if the banners are sold by nonprofit veterans' organizations.

In Tennessee, flags are tax exempt if sold by any nonprofit.

And no sales tax is collected on flag purchases made through a government agency in Virginia.

Flags only

In most states, the tax exemption applies only to actual flags.

Red, white and blue banners, miniature flags, patriotic decorations and any other products displaying images of Old Glory are still fully taxable.

So, too, are accessories such as flag poles and mounting equipment.

Symbolic tax savings

While exempting U.S. and state flags from sales taxes is a nice gesture, the tax savings typically are small.

A bit of online comparison shopping found the most expensive three-by-five foot cotton U.S. flag priced at around $35. It's $10 to $20 less if you opt for a synthetic version.

In the 45 states and Washington, D.C., that collect sales taxes, the state rates are less than 10 percent. Added local levies might push into the double-digit mark in some jurisdictions. Still, a 10 percent tax on $35 comes to just $3.50.

That means states aren't losing a lot of revenue and flag buyers aren't pocketing a lot of money back from their tax collectors.

But like the Star Spangled Banner, the sales tax savings are symbolic. And unlike the Stars and Stripes, they might not be forever.

So if your state offers a tax break on our Grand Old Flag, take advantage of it while you can.

More tax info from Bankrate

Want the latest news on taxes, tax reform prospects, filing deadlines, IRS alerts and tax-saving tips? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter: @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
3 Comments
Peter Rudolph CPA
July 08, 2014 at 2:12 pm

This gestures of State and Local Governments is a nice signal. During the independence of your country this easy to understand gestures reinforces the meaning that the United States is a fair place.

The solidarity of a country is a thumbs gesture and has my approval.

Add a comment

(Comments may take 5-10 minutes to appear)