Who Are You Calling Non-Essential?

In their search for more money, State Rulers are starting to broaden the tax base for sales taxes.  Rather than have it apply to just sales of physical items, fees for services are now in the cross-hairs.  Here in Arkansas, they are discussing levying the state sales tax on revenues from non-essential services. 

This will just start the typical fight over what services are non-essential and which are life or death.  This is really a pretty subjective assessment; especially considering that the services mentioned in this article include barbers and accountants.  I could make the argument that without our accounting services, the government wouldn't be receiving any tax money.  That should make us fairly essential.  Likewise, they also want to consider veterinarians non-essential and not human doctors.  This is blatant discrimination against our animal friends and will probably trigger a protest from PETA.

The bill currently being debated only mentions the State-wide sales tax of  5.125%.  However, if that makes it through, there is no way the local jurisdictions will sit back and not tack on their local taxes.  In some cities around the state, that will add an extra nine percent to the cost of these "non-essential" services.   

This is a perfect illustration of why I have never been afraid of losing work if the income tax system were ever replaced with a national sales tax.  We would have all kinds of fights over proper taxation and there would be plenty of work for creative accountants to help clients minimize their taxes.   

KMK

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/08/2003 02:26:00 PM Send this post: