Thumbs up or down on sales tax for personal services?

Services — excluded from Georgia’s 4 percent sales tax — may not be for much longer, AJC writer Chris Joyner reports.

A special council convened to rewrite the state’s tax code has called for the state to move away from income taxes and toward consumption taxes, Joyner writes.

As part of that move, the council recommended that about 50 personal services be taxed for the first time — including haircuts, country club and health club membership fees, shoe repair, veterinary services, lawn care and watch repair, Joyner reports.

The problem, as members of the Special Council on Tax Reform and Fairness see it, is that services have become a larger part of the state economy over the years, Joyner writes. That shift means more of the tax burden is placed on businesses that sell goods — and the tax council concluded that is not fair.

But, the cost to consumers would rise. If the proposal is adopted, the addition of a 4 percent sales tax on services is expected to generate $298 million in new revenue for the state, Joyner reports. Local governments would add another 3 percent, or 4 percent for the city of Atlanta.

The council said the increase in state sales taxes would be offset by cutting income tax rates, Joyner reports. But some are skeptical that will happen.

What do you think? Do you support or oppose this change? Why?

- Henry Unger, The Biz Beat

For instant updates, follow me on Twitter.

94 comments Add your comment

David

February 28th, 2011
6:29 am

Enough of these horses asses already; I say we put our foot down and our middle finger up!

Wendy Breeze

February 28th, 2011
6:32 am

When are politicians going to realize there is not an endless supply of other peoples’ money to spend?

Destin Dawg

February 28th, 2011
6:33 am

A Sales tax is always better than an income tax….. income tax penalizes work.. a sales tax captures everybody including illegal cash economy ( unreported income )… Fed needs a simplified flat 17 % income tax exempting say $25 K / year and a sales tax… get rid of thousands of Acountants and lawyers.. pushing needless papers…

TT

February 28th, 2011
6:34 am

The leeches oops .. I meant local city officials that just won’t quit. They need to quit spending money they don’t have . Haven’t they learned that yet? It is a recession and GA barely any jobs and can’t even entice new companies to move and high employment rates yet they think more tax is the answer. Can’t wait to leave this place at the end of the year and they will be out of my pockets for good.

TT

February 28th, 2011
6:39 am

@Destin .. I agree but that is not going to happen with the Fed. Through the grapevine they want a VAT tax added on to the income Tax.. D*mn thieves. If the Feds manage to get that passed then the states will want it too.

Wendy Breeze

February 28th, 2011
6:45 am

Too bad we can’t do like the Fed, and just print more money when we run out.

Honest Customer

February 28th, 2011
6:51 am

Typical, I will tell you anything to get elected and then do what ever I want. How is that for your DEAL.
But we are still too juvenile to buy a bottle of wine on Sunday. News flash Georgia, that would bring in more taxes, as would taxing Churches which are just big businesses any way. Mega Church, Mega Rip Off

SB

February 28th, 2011
7:03 am

Georgia and the other states should lobby congress to no longer exempt out of state online sales from Sales tax. Not only would this increase our revenue but would create more jobs in Georgia as our local retailers would have to hire more people.

Bill

February 28th, 2011
7:03 am

The Govt. just don’t get it. When your income goes down you CUT BACK on spending. I have to balance my budget or they put me in jail !! I can’t just print more money and expect someone else to pay it back. It doesn’t work that way in real life. If they want a consumption tax then go with the “Fair Tax” and get rid of income tax all together. It’s looking like the govt. want’s to do both now. Do I believe they’ll get rid of or lower income taxes…….yea, right ! typical politicians they pee on your foot and try to convince you it’s raining.
I thought the States had to balance their budget each year by Federal law, if so why are they all in debt without a balanced budget ??

Destin Dawg

February 28th, 2011
7:10 am

yes we do need a tax on church income.. which is BIG business and a BIG Tax dodge.. ..and no public unions !!

Silverchief

February 28th, 2011
7:25 am

If they do away with all other taxes, it might work, but they won’t.

Laurie

February 28th, 2011
7:26 am

First of all, I do not believe that Ga government would lower the income tax in lieu of collecting sales tax on services. They have proven their capacity to break the public trust with decisions like the one they made regarding the Ga 400 toll. Second, I see small businesses performing more unreported services for cash to side step the 6-7% increase in cost to the consumer. I would have no problem paying my hair stylist in cash to avoid the tax. As far as I’m concerned the state and local governments waste too much of my money as it is.

Scott

February 28th, 2011
7:31 am

It is funny how in this state with a very conservative, anti-tax government and populace that taxes still continually get raised. As a progressive democrat — I say ‘Right-on!’ We need to have sales tax on services as well as goods.

Can you Believe It!

February 28th, 2011
7:36 am

Nowhere was there any mention of attorneys’ fees being taxed. Tax the barber shop, but not the thieving attorneys. What a joke this commission is. The top 2% of Georgians are running it the way they want.

Bobby

February 28th, 2011
7:37 am

This is nothing more than a tax increase, the same as Georgia Power increases are nothing more than tax increases. They are just attempts by Republicans to disguise their tax increases as opposed to the Democrats who tell you upfront they want to increase your taxes. Both parties are toxic.

Overtaxed Citizen

February 28th, 2011
7:37 am

Sure, but only if they include:

Reduction of income taxes
Taxing of Churches
Right to vote on Sunday liquor sales

all on the same piece of legislation. Otherwise, it’s just another back door approach to increasing the public’s tax burden.

Bobby

February 28th, 2011
7:41 am

And insofar as taxing health club memberships, which help control health care costs. I would simply drop my health club membership if I have to start paying taxes on it.

Maybe Representative Bobby Franklin (R) can figure out a way to tax miscarriages on women while he trying to make them felons for having miscarriages.

Bird dog

February 28th, 2011
7:41 am

Where do these brainless wonders come up with these ideas? Georgia and Atlanta have already run most large companies out of the state. Add additional taxes and that will help many other companies decide to leave Atlanta.

The company I own is moving out of Atlanta and out of Georgia. We provide many jobs to mostly part time professionals. My company pays unreal amounts of state and local taxes. Where we are moving has no state taxes or sales tax on food.

Your loss is my companies gain.

Michael

February 28th, 2011
7:42 am

I am 15 Years old and I have 3 dogs and i dont want to pay like 5 extra dollars for each of them when they go to the vet or to get groomed thats an extra 15 dollars ever time i take them to the vet and i sure enough dont want to pay 5 dollars extra after i get a haircut this is a rip.

Clanmack

February 28th, 2011
7:43 am

They won’t reduce the income tax either before or at the same time they impose these service taxes because they won’t have to stand for election this year. They betrayed us taxpayers on the GA 400 tolls. If they impose this tax and don’t reduce the income tax, they should be impeached. They should have imposed spending limits on themselves when times were good, but they didn’t-they went on a shopping spree and spent the money instead of reducing taxes and letting the citizens keep it. It is a regressive tax proposal, hurting the lower income and middle class who spend a greater portion of their income on these services. How about they impose a larger tax on the wealthy spenders-like 15% on country club memberships-and less on the necessary services we all spend on, like auto repair? This will, as Laurie above says, push a portion of the economy off the books and they will get less in tax than they think. Then they will come after other taxes and fees, or they won’t lower the income tax. THEY NEED TO SPEND LESS and take the heat from the citizens who get mad about it. They asked the job. They should be careful what they ask for.

snoopy

February 28th, 2011
7:49 am

TEA (Taxed Enough Already) !!!

Just danged!! Trying to get blood out of a turnip?? Are the bozo’s in office so ignorant that they cannot see that what this’ll do is make (let’s say” 20 – 25% of peeps that already are on the fringe financially, just STOP getting their hair done, (lawns, mower, car repairs, wear shoes longer, etc) as often and dry up many of these businesses & therefore their ‘money pool’??

I await for the tax on just going for a walk in the neighborhood….

Hmmmmmmm

February 28th, 2011
7:53 am

What a JOKE, and the people of this country continue to sleep…… as the criminals(politicians) continue to stalk….

South Georgia Farmer

February 28th, 2011
7:56 am

Can you believe It! @7:36 ” The top 2% of Georgians are running it the way they want.”

Yes, Can you Believe It!”, and we keep voting for the same group that makes is easier and easier for them while screaming “socialist” at anyone who dares mention the middle class. Listen to Republicans. How often do you hear them invoke the middle class? They do mention ‘the American people” by which they mean cafeteria Christians, the wealthy, anti-government, gun enthusiasts, big oil, anti-unions, big capital, faux patriots for profits and xenophobes. Everyone else be damned.

snoopy

February 28th, 2011
7:59 am

BTW – Why NOT allow Beer & Liquor sales on Sunday you frikking know it all morons?? I am not a flaming boozer, but I know folks that have driven to Tennessee & or Florida on a Sunday for their booze.. We’re leaving a LOTTA $$ outta the pocket of Ga & depositing it in the pockets of the neighboring states…

Another thing… If we got our school schedules along the lines of Fla, Tenn, SC, AL, we’d have the potential for more $$ thru entertainment! Example: Six Flags, Stone Mountain, White Water, Lake Lanier Islands, etc ‘close’ thru the week the first week of August because school starts then… (It also opens early, but no one from neighboring states go because they are in school) Many are still vacationing but cannot go to these venues because HS students are their main employees therefore the are closed & only open on weekends..

This is so stoooooopid.. I had read a few years ago that the 5 weeks GA is not ‘open for business’ costs the state like 1.2 Billion in revenue…

Go smoke on that….

GApeach

February 28th, 2011
8:00 am

I say go for it if that means our income taxes are going to go DOWN!!! That is the only fair way to bump up the sales taxes, give the workers more of THEIR money to spend!

J

February 28th, 2011
8:02 am

I have no problem with raising the sales tax in general. I do have a problem with taxing services and labor. We should only be taxed on a tangible item or items not a service that is provided. Gross mismanagement in government still remains as our biggest problem.

Wendy Breeze

February 28th, 2011
8:03 am

South Georgia Farmer, love your stereotype. Guess you also think black people are bad because someone may have robbed a convenience store or killed someone.

Then again, we could have put Democrats in the legislature, and been broke a lot quicker. I quess all that matters to poor South Georgia Farmer is that his subsidy check isn’t cut.

Wendy Breeze

February 28th, 2011
8:05 am

Wow, snoopy. Pretty angry aren’t you? You heard?….lol…..can’t read?

C B

February 28th, 2011
8:08 am

Taxes are always borne by individuals. Increasing taxes at a time when people are already overburdened is a grave mistake. And to single out those industries that are not easily relocated to just outside the state is unconscionable. Either apply it equally or not at all (which is also equal).

snoopy

February 28th, 2011
8:11 am

Good Morning Wendy… Not ‘angry’… Just stating somethings that would bring in revenue & therefore taxable income for the state government…

Now let me ask you something… You do not have your head buried in the sand enough to really believe that they are going to ‘lower’ income tax rates, are you??

See, the way government works is once they have a viable cash flow they are not going to cut/reduce it… Anyone that believes they will is a fool/tool or just plain ignorant!! & I do not believe you are any of the above..

Have a Blessed Day….

David Hoffman

February 28th, 2011
8:24 am

Great idea to broaden the tax base. Service providers use the services and facilities provided by the state, county, and city governments. Just in a different way form product suppliers.

roughrider

February 28th, 2011
8:24 am

I would rather see all the politicians take a pay cut than pay these new taxes of ” fees.”

crackbaby

February 28th, 2011
8:30 am

Henry,

You should mention that the same General Assembly is considering eliminating sales taxes on energy sales (electricity and natural gas) to the manufacturing industry. To make up for the budget shortfall, these legislators are scheming to transfer the revenue burden to the commercial services sector (small business). This represents another shift of state government financing from rural areas to Atlanta and other Georgia cities.

If any state representatives or senators from metro Atlanta vote for either provision, be prepared to face the wrath of your constituents in the next election. Small businesses will be the engine that drives economic recovery, DO NOT increase taxes on them.

justjanny

February 28th, 2011
8:35 am

Why not tax us for breathing! Enough already!!

Realtalk

February 28th, 2011
8:41 am

What a JOKE and another bad idea. Time to March on the Capital and Washington Next. Cut spending you idiots. What don’t you get! TEA!

Realtalk

February 28th, 2011
8:43 am

Get rid of all Public Service Unions NOW. You hear me Nathan! Kaseem? Anybody?
Stop all the Bloated and Corrupt Spending. I can’t wait to Vote all these Losers Out!

Rock

February 28th, 2011
8:43 am

Yep, find a way to take even more of the money we do not have…..Yep, Georgians got just what they VOTED for going for the past 9 years….No Jobs and no real leadership…..

Arlo

February 28th, 2011
8:46 am

In addition to the tax revenue that Sunday sales would provide as well as what we could collect from “For profit” churches, why don’t we start taxing the billions of dollars being wire transferred out of the country? Most of the money being sent out of the US is income that was not taxed. Before increasing taxes on US citizens, we should start collecting from those here illegally, especially since they are draining resources that should only be provided to tax paying Americans.

Furious Styles

February 28th, 2011
8:46 am

God, we’re getting nickled & dimed to death…where does it end.

Blueberry Green Tea Party Member

February 28th, 2011
9:16 am

The people composing this “Special Council on Tax Reform and Fairness” belong in Hell.

Welfare recipients, crooked politicians and panhandlers already get enough of our already-overtaxed money.

Doug

February 28th, 2011
9:17 am

The AJC’s reporter didn’t bother to include in the story who sits on this ‘Special Council on Tax Reform and Fairness.’ The 11-member panel included Sonny, 4 economics professor, a bank consultant, a big construction contractor, the president of Atlanta Gas Light, a real estate broker, a nursery operator, and an accountant. In other words, this council included ZERO representatives from service industries that would be impacted by this unnecessary taxation proposal.

MarkG

February 28th, 2011
9:22 am

Political thinking 101:
1. Raise taxes, increasing cost of services
2. Run patrons off as taxes are paid by buyer
3. Drive business into the ground, i.e. it fails
4. Create higher unemployment
5. Move more people to unemployment benefits increasing deficits
6. Create even more anger among the electorate driving fool hardy politicians out of office
7 Elect “more responsible” representatives
8 Repeat vicious cycle
9 Public scratches head wondering when the nightmare will end

USMC2841

February 28th, 2011
9:22 am

TAX COUNCIL??? What a sham. Politicians plan on using this council as a scapegoat. “We had to raise them it was the recommendation of the council”. They new what these people would come up with before they nominated them to this pane. To all politicians- grow a pair and stand behind your policies. I will investigate and vote against anyone behind this council or the raising of taxes.

Rider

February 28th, 2011
9:23 am

Slowly circling the drain. . . .

NO_MO_TAXES

February 28th, 2011
9:27 am

NO NO NO Let’s cut services and reduce State spending but No to new taxes on the back of hard working Georgians. This will drive away businesses in Georgia !!!!!!!!!!!!!!!!!!

ANYONE WHO VOTES FOR THIS TAX INCREASE SHOULD BE THROWN OUT !!!

mcdaviddawg

February 28th, 2011
9:28 am

sales tax revenue is to a large part how the govt. have gotten into this situation, It is government that considers it free money and spends with no responsibility. They must stop spending on new buildings. We’ve built just about everything that they could think of with sales taxes. They have become the local govt. version of intitlements. Now with revenues down they don’t know how to pay for them. Yet still our basics have not been done (sewer systiems, etc). There needs to be no more free money for the governments. Taxes need to hurt so people will say no. Sales taxes don’t create enough pain.

MSTC-1

February 28th, 2011
9:33 am

All I got to say, if I were a democrat, liberal, or union member, I would be advocating violent rhetoric regarding the addition of another tax (sorry – need to remove the part about unions since their union “heads” use our tax dollars to buy the liberal. democrat candidates at election times). But since I believe in the rule of law, I must wait until the next election cycle to vote these people who believe in the police power of government to sieze my property to use for unconstitutional purposes.

By the way, crackbaby and other anti-business responders, a business (big or small) does not pay pay taxes!!! They pass it on to the consumer or sharholders which include those of us who have to put our own money into our own medical and retirement account because we cannot use the police power of government to seize it from someone else like the unions.

Road Scholar

February 28th, 2011
9:33 am

Mark G: You left out No. 10- Blame Pres. Obama! (sarc)

Bill: When the politician pees on your foot, who pays the tax, the peeer or the peeee? It is services rendered!

Why don’t we triple the sales tax for people who bring their unruly children to restaurants and do nothing when the “precious one(s)” act up? Pay for a babysitter and stop ruining other peoples night out! Oh would babysitters be taxed?

Greg Orr

February 28th, 2011
9:38 am

(if you drive a car, car;) – I’ll tax the street;
(if you try to sit, sit;) – I’ll tax your seat;
(if you get too cold, cold;) – I’ll tax the heat;
(if you take a walk, walk;) – I’ll tax your feet.

Taxman!

Thanks to Lennon adn McCartney

Road Scholar

February 28th, 2011
9:39 am

MSTC-1: The present state government as well as other states and the House are controled by Republicans/conserves. So those unions having spent soooo much of their OWN money on their candidates worked well! Eh? Your conserves are really the answer, as they look to raise our taxes and promise again lower income taxes, they go after working adults.