As Hoosiers start stocking up for Independence Day, be sure not to blow your top at the fireworks shop! Instead, understand that the cost of fireworks is directly impacted by sales tax, as well as an additional public safety fee.
In the most recent Tax Talk blog post, Grace Bultman, the Digital Communications Manager for the Indiana Department of Revenue, noted that every vendor who sells fireworks is required to charge a 12 percent tax on all gross sales.
Bultman said that that aside from the standard seven percent sales tax, fireworks also include a five percent public safety fee. Additionally, retailers selling these items are required to register with the IDOR and the local fire marshal.
She added that any items that are detonated or burned to create a visible or audible effect are considered fireworks. This includes a number of Fourth of July favorites such as wire sparklers, roman candles and firecrackers.
So the next time you find yourself ready to harangue the cashier over a pricey fireworks purchase, just remember that 12 percent of that cost is going to Uncle Sam.