Don’t squash that bug! It might be worth a tax break.
“While many states offer sales and use tax exemptions for agricultural products used for farming purposes, the states differ in their tax treatment of beneficial insects,” writes Emilie Burnette at BNA’s SALT Talk Blog. (For non-tax types who found this post by Googling “insect,” SALT is the acronym for state and local tax.)
She cites California, where the Golden State’s Board of Equalization specifies that sales of beneficial insects and earthworms are taxable. However, people who raise such crawly creatures may purchase feed for them tax-free.
But a couple of states eastward, New Mexico is a bit more bug tax friendly toward some bugs. Land of Enchantment tax law says that sales of insects “used to control [the] populations of other insects” to people in the farming and ranching business are exempt from sales tax.
Note that the sales tax breaks tend to apply only to commercial enterprises.
That means the price of that bag of ladybugs you picked up at your local nursery to take care of the aphids on your backyard rose bushes probably will include state and local tax.
In her post on insects and taxes, Burnette also discusses such things as the tax treatment of insecticides and pesticides. But I thought specific bug taxes would “bee” of more interest to most readers.
You also might find these items of interest:
- Bed bugs bugging IRS
- Tax deductible donations to environmental groups
- Could a flatulence tax on cows slow global warming?