Georgia GOP pushes massive service-tax increase

At the halfway point in the 2011 session of the Georgia legislature, a measure has been introduced that would — for the first time ever – force Georgia citizens to pay sales taxes on certain professional services they receive. The proposal – HB 385 – also would greatly expand the number of personal services already taxed in the Peach State. If HB 385 — introduced last week by Republicans Mickey Channell of Greensboro and Larry O’Neal of Bonaire — becomes law, Georgia will join a total of only nine other states in taxing consumers for professional services they receive.

The genesis of this tax-raising measure lies in the recommendations issued in January by the “Special Council on Tax Reform and Fairness,” appointed last year by former Republican Gov. Sonny Perdue. According to an article last week reporting on the introduction of HB 385, the Council members recommended the personal services-tax measure, among others, because they believed the measures would “make the state more attractive to business.”

Setting aside the questionable logic of recommending new taxes as a way to lure business to a state or to encourage businesses to remain in the state, the new taxes most definitely will not be “more attractive” to consumers. It also is virtually certain that those businesses and individuals who would be required to collect, remit and report on the service taxes, would beg to differ with the manner in which the tax bill’s supporters characterize it.

The Tax Council included a laundry list of services from which it recommended sales taxes be collected (including laundry services); and the list – now incorporated into the pending legislation – includes far more than commercial services such as haircutting and styling. Most types of repair work, including that performed on shoes, clothing and jewelry, would be taxed. Every time you update your GPS device in your automobile, there would be a tax to be paid. Even the neighborhood lawn guy would tax you for cutting your lawn or trimming a hedge. Your local garbage service would become yet another tax collector; as would every person who cleans homes for a living.

The list goes on and on; the hits just keep on coming. (Even your dog or cat, if left with a pet-boarding service while you are out of town for a few days, will trigger the services tax.)

It remains unclear if the legislative version of the Tax Council’s recommendations will be voted on this legislative session, but Republican Channell, who chairs the Ways and Means Committee, has indicated this is his “goal.”

Americans for Tax Reform (ATR), the highly-regarded and non-partisan taxpayer watchdog group headquartered in Washington, DC, came out in opposition to the Council’s report when it was published last month. Looking at the 127-page piece of legislation — even considering it contains some long-overdue streamlining measures to the Peach State’s tax statutes – it is not difficult to understand why the Republican-backed proposal would run afoul of a fiscally conservative, taxpayer watchdog organization like ATR. Let’s hope it runs afoul of enough Georgia consumers and businesses to pressure the legislature into defeating it.

By Bob Barr — The BarrCode.

89 comments Add your comment

RF

March 2nd, 2011
6:37 am

Oh, wait, I thought it was the Democrats who always raise taxes….I’ll be danged if I’ll pay the lawn guy a “service tax”. Yet another reason I left the GOP and haven’t looked back yet!

Travis McGee

March 2nd, 2011
6:41 am

Blame it on those ol’tax and spend Democrats. Whoops!

“Read my lips. No new taxes!” Whoops, again!

sean Yankee

March 2nd, 2011
6:43 am

I am sure there will be a tax cut for the wealthy as a companion bill to go with raising taxes on the middle class.

Karl Marx

March 2nd, 2011
6:45 am

You think this service tax is bad wait until you see what they want to do to the gas tax. Remember most of these so call representatives are party jumpers and originally they were Democrats So what we have now are all Republicrats and Democans and very few true fiscal Conservatives. BTW don’t look to the Libertarians ( the loonatarians ) they have no fiscal conservatives either.

VietVet

March 2nd, 2011
6:53 am

As long as white, rural Georgians support only one political party they can be robbed and beaten at will. Taxes will go up, transportation, education, health, safety, will go down and they won’t do a damn thing about it. The Republicans own them lock, stock and barrel.

Ga Politicians

March 2nd, 2011
6:56 am

Have a special place waiting on them on their demise. Make the citizens pay more taxes for everything. The highway contractors have fought higher fuel taxes since I’ve been driving. They preferred to have the tax over the entire population rather than those that used it. Now after exhausting all possible general tax increases, they are willing to charge more for gas taxes. How about charging the attorneys like you do the barber shopps.

Reagan Lover

March 2nd, 2011
7:20 am

Here we go… tax cuts to the wealthiest multi-millionaires. Tax cuts to the corporations that aren’t worried about hiring new employees because it will cut into profit and bonuses.
So… let’s tax the middle class. Let’s make the everyday man and woman bear a large part of the burden.

cs

March 2nd, 2011
7:22 am

The democrats are looking better all the time. Got bills to exempt choo choo trains from diesal fuel taxes too and raise them for everone else. If this is the Republican agenda, I will be voting different next election.

Mongo

March 2nd, 2011
7:25 am

sean Yankee – of course there is. The state income tax will drop 2% so those that make enough to save or invest a large portion of their income will save money and those of us that spend most of our income get taxed more. It’s what’s known as a “disincentive to spend” that will be a drag on Georgia’s economy and kill more jobs. Conservatives are great at killing jobs.

I could be wrong on this, but I don’t recall reading that the services of lawyers and stockbrokers will be subject to sales tax like other services.I wonder why that is? It couldn’t be because the wealthy and influential use their services more and conservatives don’t want their masters to have to pay taxes, could it?

lynnie gal

March 2nd, 2011
7:27 am

Not only is it services they want to increase taxes on, but groceries, something no one who eats food can escape. These taxes on groceries, services and gasoline will, of course, be accompanied by tax breaks for corporations and wealthier individuals who pay more income tax because they make more money. I agree with Vietvet–Georgians can be beaten, robbed and spat upon by republicans but Georgia’s voters by a majority will continue to kiss their boots kicking them in the face and ask for more.

ATLER ( Semper Fi )

March 2nd, 2011
7:31 am

(As long as white, rural Georgians support only one political party they can be robbed and beaten at will. Taxes will go up, transportation, education, health, safety, will go down and they won’t do a damn thing about it. The Republicans own them lock, stock and bar.

I totally agree with the above statement. When will the people of Ga stop looking at things in color and see what the Republicans are doing to this State. If it wasn’t for Atlanta, the State of Ga would be another poor southern state.

Southwest ATL

March 2nd, 2011
7:38 am

So let me get this straight. There’s enough support to pass this, but Sunday sales gets stalled? Isn’t this the same group who just gave a tax break on airline fuel, again?

You Distort/We Deride

March 2nd, 2011
7:43 am

You’re getting what you deserve, Georgia.

How many times will you continue to be duped by liars spouting their ‘principles’ on the campaign trail, only to be baited and switched after swearing in?

Mike

March 2nd, 2011
7:44 am

I don’t think this is a good idea at all, but I do support raising the gas tax. It is way too low for such a large and growing state. Georgia is going to fall behind Florida and NC if we don’t do something about. How are we suppose to attract economic development without investing in our infrastructure?

By the way, for those who voted these lunatics in, how do you feel now??? When will people in this state WAKE UP and see the light?

I Know You Are But What Am I

March 2nd, 2011
7:47 am

Why don’t we remove all state and local taxes of all shapes and sizes, and simply let the wealth trickle down to all of us? Why can’t we just let divine providence lead us to wealth and prosperity? Let it rain money! Quit abusing the rich with marginal tax increases!

Love,

Sean Hannity

Where are they now?

March 2nd, 2011
7:54 am

Where are the Tea Party idiots now? I thought the GOP was for the “people”, but it ALWAYS seems the ones with the power are for their pockets and the rest are just numbers they need. I am surprised we don’t have over a 100 comments, because the “Republicans” are ALWAYS in here with something to say.

Also, because there are some ignorant Democrats that switched sides doesn’t mean a thing, because there are a LOT more Republicans that were there originally. So try another line.

Georgia will never prosper as long as we have these liars in office. You silly people elected a guy that can’t manage his own affairs to run this state. No matter how many stupid Tea Party chapters you form, you Republicans are NO better than the crazy Democrats. Get over yourselves and get a brain!!

Road Scholar

March 2nd, 2011
7:58 am

Yeah let’s put a tax on services so that ALL businesses have to file a quarterly or monthly report on each transaction to report the rvenue….Wait a minute…this sounds like that evil recording by businesses that have to report the healthcare services to their employees! Or close to having to use E-verify. How can legislators be against the healthcare and e-verify because it is too time consuming and causes “uncertainty ” to businesses ( Oh, the strain) but this wouldn’t.

Road Scholar

March 2nd, 2011
8:00 am

Oh and I support raising the state gas tax by adjusting it to inflation. It was set in 1982 and hasn’t changed since. Legislators make any increases easier to understand and transparent versus tieing it to obscure data.

Misty Fyed

March 2nd, 2011
8:03 am

Where is the Tea Party? The Tea Party is the one in favor of sound fiscal policy. That means either raise taxes to pay for the services or cut services. Since politicians have never met a hand out or a program they didn’t like, they are going to raise taxes. It’s a shame; but at least they are going to try to raise the money they spend. I still think that if America was forced to pay for all of the services it demands, plus the debt, the average voter would rebel and we could get back to sanity. That may be a pipe dream though.

Morrus

March 2nd, 2011
8:06 am

1 of 9 states with service tax and 1 of 3 with no Sunday liquor sales, it’s amazing!

roughrider

March 2nd, 2011
8:12 am

Cutting education funding, raising taxes on working class people and lowering taxes on the state’s wealthiest, corporations, are all trademarks of the GOP.

Carlosgvv

March 2nd, 2011
8:17 am

The Tea Party and Republicans worked long and hard to make gains in Georgia and succeded. Now they come out with a recomendation for new taxes that no one, liberal or conservative, likes. Have they suddenly decided to self-destruct?

ATLER ( Semper Fi )

March 2nd, 2011
8:18 am

Boy are Georgians dumb ass hell. This same Republican Party has been doing the same things for the last 8 years and yet you idiots still keep putting dummies and crooks in charge of this state!!!!!!

Buzz G

March 2nd, 2011
8:25 am

Tea Party, where are you when we need you!

MC

March 2nd, 2011
8:25 am

Because they squall about “immigration” to rally the racist redneck bigot base and smokescreen everything else with the ones that appeal to that crowd. Don’t you guys get it?

BJ Van Gundy

March 2nd, 2011
8:31 am

A point of clarification: The Georgia GOP is NOT pushing any such thing! Georgia Republican Legislators are.

JP

March 2nd, 2011
8:35 am

I am a DEM – first to admit we haven’t done a stellar job in this state, but what have the R’s done in the past 8+ years to merit continued support? Maybe they are really just the lesser of 2 evils.

Carlosgvv

March 2nd, 2011
8:44 am

BJ Van Gundy

I hope you don’t really believe that.

Eric

March 2nd, 2011
8:48 am

You can bet I’ll stop using all these services, and unfortunately, they will lose out on business. Not too smart is it, Ga Legis.? I certainly won’t pay taxes a lawn cut by a neighbor’s teenager looking to make a little summer income. How “unneighborly” our government has become!

the original and still the best John Galt

March 2nd, 2011
9:08 am

Where to begin… the previous alleged “Revenue Commissioner” Black Bart could not answer legislative questions last year about the amount of Sales Tax that was going unfiled and unpaid, because he had eliminated the jobs of the people who used to check that. Black Bart had no idea.

There’s no doubt that there’s a huge number of non-filers and non-payers who take the Sales Tax from their customers and fail to turn it over to the State. The Department of Revenue cannot enforce the current law effectively because they do not have the resources. So, adding whole new classes of businesses who must register for Sales Tax and file the returns each month is going to improve the situation? No way.

Ragnar Danneskjöld

March 2nd, 2011
9:14 am

Good morning all. I would prefer deep cuts in state services to imposition of any additional taxes. However, if the new tax on services is a companion to an abolition of the income tax – effectively a change from one to another – I’ll support it.

I Know You Are But What Am I

March 2nd, 2011
9:15 am

Back to the drawing board, Georgia Republicans.

Perhaps you might concentrate on the things that actually matter. Obama’s citizenship, for instance.

Ragnar Danneskjöld

March 2nd, 2011
9:16 am

While they are looking at it, how about a “service” tax that would enhance the business-friendly reputation of the state? If we declared, as a matter of policy, that punitive or exemplary damages awarded in lawsuits are property of the state, and taxed at the rate of 98% (award the standard sales tax collection fee to the litigating attorney), we would see both less frivolous litigation – end of spinning the big wheel – and some small revenue enhancement.

LA

March 2nd, 2011
9:20 am

Why is GA always behind other southern states when it comes to taxes etc?

Then again, GA isn’t going bankrupt anytime soon.

LA

March 2nd, 2011
9:30 am

Hey left wingers,

Explain to all of us why your party couldn’t come up with better candidates?

Roy Barnes was the best that you could come up with. Explain that one.

Road Scholar

March 2nd, 2011
9:36 am

LA: They all became wonderful republicans!

RD: “I would prefer deep cuts in state services to imposition of any additional taxes.”

So what future year would you like your 2010 tax refund? Drivers license?

Jefferson

March 2nd, 2011
9:46 am

Higher marginal rates on income would be a better idea to raise revenue.

jm

March 2nd, 2011
10:02 am

Taxing services is a damn good idea, putting it on equal footing with products. Part of the reason manufacturing has declined so much in this country is the taxes on goods, which are a shrinking part of our economy because of the taxes on goods only, keep increasing. Manufacturing and goods production is in a death spiral because its the only thing to tax.

If you tax services too, you can lower the overall tax rate. As always, Barr is an idiot.

Thou shall not encroach

March 2nd, 2011
10:08 am

Tax IQ! Bob Barr is a genius. I’m a moron. All the other commenters here are uber-brilliant geniuses too. Tax IQ!!

Tax IQ. Here’s my two cents.

bwa

RF

March 2nd, 2011
10:12 am

“It’s a shame; but at least they are going to try to raise the money they spend”

Noble thought, but hardly accurate. They’re overlooking grossly unfair tax rates and exemptions they’ve given to the wealty and corporations. This is a consumer-based tax that will squash many small businesses and force those who spend most of their income to bear the burden for taxes. I’d favor, like many here, the reduction of services before I’d impose yet another tax that the middle-class carries the burden for. I guarantee luxury level services that cater to the wealthy will likely not make the list. We’ll see…

jconservative

March 2nd, 2011
10:20 am

The Republicans have been in charge of Georgia for 8 years and state government is bigger than ever.

All the state legislature wants to talk about is taxes. No one is cutting the size of government.

So government grows larger, requires more revenue, and, like Pavlov’s dogs, the governor & legislature raise taxes.

“And round and round it goes and where it stops nobody knows.”

the watch dog

March 2nd, 2011
10:48 am

The Georgia legislators are considering among other service taxes, a “pole tax” for Georgia strip clubs. I say, that is unconsitutional. I mean, really, what service does a pole provide? Texas imposed a similar strip club fee in 2008 and the judge declared it unconstituional. It is people that perform services, not inanaimate objects.

The Automotive Service Association[ASA] opposes the proposed auto repair tax. Now if the Georgia legislators use the same reasoning here, they would be taxing the hoist that lifts the cars.

The Georgia legislators have gone to far, leave those poles and hoists alone.

JP

March 2nd, 2011
10:53 am

Watch Dog – if we institute a pole tax at strip clubs – our legislators might stop going to those clubs and stick with hookers and escorts instead.

killerj

March 2nd, 2011
11:01 am

Amazing how are Government functions increase to tax the public?What a bunch of smart behind closed door politicians we have,Go Tea Party.

Why?!

March 2nd, 2011
11:07 am

Again I will ask, why do you people keep voting them in when you know stuff like this is going to happen? Why? Why? Why? Why? Why?

When Democrats were in office, they turned GA into THE STATE in the South to do business. It was like a no-brainer. Now look at us…

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Markie

March 2nd, 2011
12:04 pm

I wonder if this is started in part by the pharmaceutical companies that make the RX to euthanize dogs, cats, horses and other animals. Their stock is going to go through the roof!! Rescue organizations, oh they will be a thing of the past. The shelters will be full. Animals will suffer. Pet owners will have to cut back, not only on “elective” services like hip replacements, dental cleanings, cancer treatment but necessary ones as well. GOP pigs, I hope their pets bite them and piss on their beds.