Most states tax the sale of shoes and socks. Some states exempt clothing and footwear, such as New Jersey, Rhode Island, and Vermont, which exempt general use clothing and footwear.
Taxable and Exempt Items
Accessories, equipment, protective equipment, and sports clothing are taxable in Vermont. Clothing over $175 is taxable in some states. For example, a $200 suit would be taxed $1.56 in those states.
Wool socks repel moisture well and have antibacterial properties, making them less prone to frequent washing than cotton socks. Some general socks can be exempt until February 2024, but socks for sports and other special purposes are generally taxable.
Wholesale sock sales taxed at a previous rate of 5% remain so after manufacturing. In California, most clothing is taxable at 7.25% plus local taxes, though exemptions apply for children’s clothing sold to non-profits and some thrift store clothing sales.
Tax Policies on Other Goods and Services
Attempts to expand taxing out-of-state online sales are unpopular. An origin-based sales tax could address inequities without taxing non-residents. Basic groceries are generally zero-rated. Dietary supplements are taxable in most places, while installing tangible property is usually not taxed if charges are stated separately.
Tax Exemptions and Inequities
What products aren’t taxed?
Toilet paper is taxed in Vermont at a 6% rate, with an additional 1% in some cities. Vermont taxes soft drinks and has an estate tax. Income and property taxes are high, but most states do not tax groceries, medicines, devices, or equipment.
What items should not be taxed?
New Mexico takes a different approach, not taxing food and offering veterans benefits like tax exemptions and reduced licenses. In Vermont, most retirement income and some Social Security benefits are taxed, with high income tax rates and property taxes, but many necessities are not taxed, including food, food products (except soft drinks), and general clothing.