6:08 am February 28, 2011, by Henry Unger
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
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