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Sales, excise taxes light up fireworks' costs

In many states, sales taxes add to the costs of holiday fireworks. A few collect excise taxes, too. If the levies are dedicated to specific causes, they can do a lot of good. Read on for my suggested beneficiaries of pyrotechnics taxes.

Multicolor line of fireworks_giphy

States take almost every opportunity they can to add to their coffers. That tendency also applies to July 4th celebrations.

The obvious revenue connection is sales tax applied to purchases firecrackers, bottle rockets, sparklers and the wide variety of personal pyrotechnics.

The sales numbers explain the appeal to state and local tax collectors. In 2018, the U.S. pyrotechnics industry raked in $945 million in consumer fireworks sales. Another $360 million was sold to professional pyrotechnicians.

It's hard for some state lawmakers to see those types of revenue figures and not want a piece of the action for their state's coffers.

A handful of states want even more, also adding an excise tax on fireworks.

In for a penny, in for pounds of pyrotechnics: In 2018, 277.5 million pounds of fireworks were purchased across the United States, according to data from the American Pyrotechnics Association (APA).

The vast majority, 258.4 million pounds, was bought by consumers for personal Fourth of July celebrations.

Another 19.1 million pounds went to the pyrotechnic professionals who set up Independence Day displays across the country.

And no, the APA does not break out how many Black Cat firecrackers are in a pound.

The association does, as noted earlier, track the revenue produced by those hefty sales.

As you can image, the states and, where authorized, local government or special taxing jurisdictions enjoy the annual midyear addition from the weighty fireworks sales.

A few even collect a bit more.

Excise tax add-ons: Five states levy an excise tax on fireworks sales, ranging from 5 percent to 12 percent.

They are —

  • Georgia at 5 percent,
  • Indiana at 5 percent,
  • Michigan at 6 percent,
  • Pennsylvania at 12 percent and
  • West Virginia 12 percent.

Consumers, sellers are anti-tax: Fireworks fans no doubt don't like paying the added taxes. Nobody likes paying taxes of any type.

I suspect, however, that buyers simply grumble and hand over the amounts every July, as well as for New Year's Eve and other special events, like Cinco de Mayo parties in my neck of the woods.

July 4 vintage postcard_ZazzleThe companies that make the fireworks don't like them either.

Phantom Fireworks, a major maker of fireworks with stores all over the country, even filed suit against Pennsylvania, arguing that its 12 percent tax violated the Keystone State's tax code. A state court disagreed.

But the company at least made its case to the court.

Fireworks taxes are anti-consumer and anti-fun, according to Phantom officials.

Plus, Phantom Fireworks vice president William Weimer told Vox that taxes simply prompt buyers to shop around geographically.

Fireworks buyers whose homes are close to the border of states that don't tax fireworks or have lower tax rates will just cross the state line to purchase their preferred pyrotechnics.

OK with reasonable taxes: Weimer added that Phantom is not necessarily anti- tax, just opposed to what the company sees as excessive levies.

"We're not against a tax around 3 or 4 percent that hopefully helps fund the fire services or inspection costs," said Weimer. "That's great."

That's what Texas used to do with its fireworks excise tax. The 2 percent added levy, which was discontinued as of Sept. 1, 2015, went to fund rural fire departments.

An analysis of the fireworks tax by the Texas Senate, however, found that the amount of revenue collected from the fireworks tax was not worth the cost of administering it.

Fireworks fees for Fido and Fifi: Personally, I'd like to see Texas and other states without a fireworks tax give it shot with another special constituency benefiting from the fee.

I'm talking about pet shelters, which could use the money from a fireworks tax.

Every July 4th, terrified animals run away from home when the booming starts, often ending up in rescue facilities.

Dog in animal shelter_Dave Cooper via Flickr
Photo by Dave Cooper via Flickr CC

At best, the shelters face short-term overcrowding.

In some cases, the animal owners never reconnect with their pets, putting the burden on the shelters to take care of them longer term.

The results are even worse if the animal service isn't a no-kill facility.

So on this July 4 eve, I offer this post as my personal support for fireworks taxes dedicated to the care of pets who, like many of us humans, don't enjoy the explosive side of America's annual birthday party.

Until then, if you have a pet who is scared by fireworks, please take extra care to keep him or her safe and provide a bit of extra comforting.

And if you didn't spend too much on fireworks, taxes included or not, consider donating to your local animal shelter.

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