11:36 am December 14, 2010, by James Salzer
The head of the commission studying the state tax system said this morning the panel will likely recommend expanding the sales tax base and lowering tax rates.
While A.D. Frazier didn’t provide specifics, the commission is expected to recommend charging the state’s 4 percent sales tax on more goods and services – maybe even groceries – while lowering income tax rates.
Frazier’s comments mesh with the thinking of Republican leaders, who have long sought to lower income taxes and make up for the lost revenue by charging the sales tax on more services like oil changes and hair cuts. In addition, some lawmakers have pushed the state to put the sales tax back on all groceries. The state’s sales tax was taken off on most groceries in the late 1990s.
Frazier said the panel will also probably call for an elimination of sales taxes on energy used in manufacturing, such as carpet and paper-product production.
Frazier’s panel will make its recommendations to legislative leaders in January, and then lawmakers will develop and vote on a proposal to change the tax system.
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