A post for the tax season

Taxes. Blegh.

Tax on yarn? Who knows the correct answer? Tien commented on this flickr photo that there were two taxes, which I didn’t even notice when I bought the yarn.

Adam was hypothesizing that yarn is taxed at half the rate since it has the potential to be clothing (generally untaxed under $110 in New York), but still has to be somewhat taxed since it is not yet clothing. (That sounded like a summary of a Greek philosopher or something. “It has the potential to be clothing, but it has not yet realized its potential.”) But recently, I went to Purl to buy yarn for Adam’s b-day hat* and noticed they charged no tax.

What was up? As tax season draws to its horrible end, I thought I would do some research. And here, my lovelies, is the answer, courtesey of the New York State Department of Taxation and Finance:

“Beginning April 1, 2006, there will be a year-round exemption from New York State sales and use taxes for clothing, footwear, and items used to make or repair exempt clothing, costing less than $110 per item or pair. The exemption does not apply to locally imposed sales and use taxes unless the county or city imposing those taxes elected the exemption.”

If you click through to the whole document, there is a great deal of fascinating wording** like, “The exemption applies only to clothing and footwear worn by humans.” Though they go on to specifically list yarn as one of the items considered exempt under this law, I’m not sure what would happen if you were to announce loudly while buying your yarn that it was to make a sweater for your dog. Perhaps they would then have to tax you.

Under their FAQs, they also answer a craft-related question:

  I plan to purchase a single piece of fabric that will cost more than $110. I will use the fabric to make several items of eligible clothing that will each have a value of less than $110. Can the fabric be purchased exempt from tax?
  No. A single piece of fabric that costs $110 or more is subject to both State and local taxes. However, if the fabric were purchased in multiple yardage pieces, each costing less than $110, the purchases would be exempt from the state tax and the local tax if the locality has elected the exemption.

So, Ithaca must have a local 4% tax that was applied to both items, and the additional sales tax was added on to the needles.

* I have added new projects to my sidebar progress bars.

** AKA why CPAs, actuaries, and tax lawyers get paid the big bucks.

Oh, and how is the yarn that started it all coming along? See here:

Spring Sock

Kind of ugly. Yet spring-y. Hence its new name: Spring Socks. Also, because it looks like an Easter Egg.

By the way, when I bought this yarn, Adam said, “Oh, is that self-patterning?” And I was like “No, it’s just multi-colored.” But he turned out to be right.

Posted in the Business, Uncategorized at April 2nd, 2007. Trackback URI: trackback

One Response to “A post for the tax season”

  1. September 9th, 2007 at 1:40 pm #New York Minknit » FO: Ugly/spring socks

    […] generic top-down sock pattern Yarn: 1 ball of Sockotta, 5% cotton/40% wool/15% nylon, $9 from The Homespun Boutique, in Ithaca. Needles: Inox 2, set of 5 Time to make: Started February 20, finished September […]