The Taxability Of Clothing Accessories
One of the most common things we are asked about at Sales Tax and More is taxability. Taxability almost always comes down to super-specific factors, and each state has their own ideas on what is and is not taxable. On top of this, there are constant changes in taxability and states are continuously clarifying these specific factors.
For instance, in states that consider clothing items exempt from sales tax sellers often run into issues and confusion when it comes to accessories. Specifically, what does and does not qualify as a clothing item. Consider this complicated taxability conundrum that the New York State Department of Taxation and Finance explained. Mitten clips are subject to sales and use tax because the clips qualify under the state tax law as taxable accessories and not tax-exempt physical component parts of the clothing to which the clips are attached. For most people in the U.S. right now the weather is starting to get chilly! As you pull on your mittens and attach them to your mitten clips, remember sales tax!
Sometimes it’s sellers trying to make stretches or to use common sense. However, sales tax doesn’t always make sense! This is a product of confusing guidelines from states when it comes to what is and is not an accessory. It is not always straightforward.
So in this example, for instance, you may be wondering how mitten clips are taxable when they seem to be a very functional item when it comes to your cold-weather attire.
“Mitten clips used in the manner outlined by the Petitioner are essentially accessories and not physical components or constituent parts of the clothing to which they are attached. Unlike zippers or snaps, for example, mitten clips do not become a physical component part of the clothing. Furthermore, they are readily removable rather than being sewn into a garment.
“Not all items worn on the body qualify as clothing and footwear, and mitten clips do not fall within any exempt items specifically delineated by the Department. See TSB-M-06(6)S. Thus, the crux of the Petitioner's question is whether the mitten clips become a physical component part of the clothing to which they are attached. The Tax Appeals Tribunal in Matter of Petition of Gem Stores, Inc., (Tax Appeals Tribunal, October 14, 1988) pondered the definition of “physical component part” in a matter not involving clothing. The Tribunal found that the word “component” is defined as “serving, or helping to constitute constituent” and that “constituent” is defined as “that which constitutes as a part, or an essential part, a component, an element.” The Tribunal found that “[c]learly implicit in these definitions is that components and constituents held for retail sale are, from the customer's perspective, more than unrelated or unwanted physical appendages.”
In conclusion, the confusion sellers and especially online sellers face when determining what is and is not taxable in regards to clothing and accessories is understandable. Navigating the world of taxability is complicated and it is important to do your research and work with reputable experts. If you need a taxability consultation please click here!
By: Ellie Moffat
This blog is intended for educational purposes and not as tax advice. Tax policies and procedures change frequently, so specific information, such as thresholds, rates, etc. included in this blog may have changed since it was originally published. Please request a consultation for more in-depth information.