Sales Taxes on Air Ships: A Historical Tax Conundrum
From 1896 through 1897, people across the nation saw mysterious airships. The sightings began in San Francisco and traveled East, and by the end of the year, thousands of people had reported airship sightings, and newspapers across America had published drawings like the one you see here interviews with witnesses, and even the occasional photograph.
In Arkansas, a number of people shared their experiences with the airship. Two men in Hot Springs, according to the Hot Springs Sentinel, chatted with the pilot during a rainstorm. The pilot said the witnesses reported, “that he could take us where it was not raining. We told him we believed we preferred to get wet.”
Word of the airship’s travels around the state reached the General Assembly that spring, and they decided to take action. Specifically, they wanted to charge the airship’s owners tax on all the freight they were carrying.
Bear in mind, the airships had not been clearly identified at that point — many historians think the whole airship madness of 1896-97 was a hoax not unlike modern internet memes, and even now the owner of the airship (if it existed) is not known. There were no taxes on airship freight at the time. Sales taxes didn’t come about until the 1920s.
But the Arkansas General Assembly saw the potential. Taxes were levied on tobacco and alcohol, as well as on various kinds of activities, including the transportation of workers from one place to another. There was an estate tax and a luxury tax, and the United States was on the verge of a period of great creativity in the creation of taxes.
Arkansas never got a chance to collect taxes on the freight, if there was any, being carried by the 19th-century airships, if there were any. But states have continued to watch for opportunities to create new taxes, and they’ve continued to be creative about it.
That’s one reason that sales taxes are so complex. Your CPA should be able to tell you whether you need to collect sales tax and at what rate or rates. But it’s hard to be sure that every part of your business is collecting all the sales tax in every jurisdiction at the correct rates… and filing and remitting all those taxes correctly.
SalesTaxDataLINK is highly accurate. We can provide a tax engine that drills down into the small details that can cause confusion, and we can also handle all your sales and use tax issues directly. Contact us now and let us show you — with your own data — how simple sales tax compliance can be.
Even when taxing entities are getting creative.