States Get Wacky With New Taxes to Raise Money

The last few years have been tough for everyone. The states are no different. The loss of property and income tax revenues has seen huge deficits in many states. In response, state governments have passed a hoard of new taxes to try to make up the difference.

Kentucky is our first stop. Politicians aren't even trying to hide their effort. No, they've declared the "wealthy" aren't paying their fair share. How do they plan to tax them? By extending the state sales tax to luxury items like...balloon rides. In fairness, the tax also applies to limos, golf greens and professional laundry services. Kentucky thinks it will raise as much as $400 million in revenues. Kentucky is hardly alone.

Michigan is thrashing around like most states. To overcome its deficits, it is passing new taxes on a bevy of different services. They range from massages to pet grooming to bowling and tickets to movies and the zoo. What Michigan politicians don't seem to understand is these are all optional services and are already under pressure as people save their money given the risky times.

Missouri is a state that has really walked into a mess by trying to tax everything. The state is trying to apply a 4 percent tax on yoga. The only problem is yoga is actually a practice that is part of a religion. The United States Constitution prohibits the taxing of religious practices. Instead of collecting sales tax revenues, the state has managed to buy itself a large number of lawsuits and unfavorable publicity. Hey, nobody said politicians were smart.

Every state has their odd taxes, but Nebraska is really making a run for the top spot. It is trying to raise $44 billion in a year, so the new taxes are coming fast. That doesn't mean they aren't incredibly stupid. How about a tax on...fur storage. I didn't even know there was such a thing! It gets better. There is also a new tax on shoe shines, camera repairs and learning to dance!

The states are simply reacting the only way they can. Tax revenues are down and money needs to be raised. That being said, many of the new taxes in EVERY state are so bizarre as to invite ridicule.

Richard A. Chapo writes about IRS levy strategies and a host of other income tax issues for BusinessTaxRecovery.com.