Preparing for Battle on Extending the Sales Tax to Services

Date: October 23, 2020

Podcast: The key to victory is making people understand what it would really do

It is the issue expected to crop up faster than any when a new California State Legislature sits down for business after the Election. With state finances in shambles, some see extending the state’s sales tax to include services as a great revenue-raiser and others argue it’s also a matter of fairness. After all, if hardware, book, and grocery store owners have to collect and remit a sales tax, why shouldn’t the doctor, dentist, accountant, and beautician have to do the same?

Not so fast, counter Anthony Pugliese, president and chief executive officer of the California Society of CPAs, and John Kabateck, California state director for the National Federation of Independent Business, NFIB, in a 32-minute podcast.

Pugliese discusses the unintended consequences of extending the sales tax to services, such as its punishing tax pyramiding effect, and the supreme difficulty of determining and recording when, where, and how a service was delivered. Far from helping stabilize California’s tax collection volatility, says Pugliese, it would actually exacerbate it.

Kabateck points out that small businesses, whether they provide goods or services, are not sold on the idea, and he talks about how Main Street enterprises would like to see some other things done first before discussing the issue.

Click on the graphic below to listen to the 32-minute podcast, and below it, you can listen to three prior NFIB California podcasts.

Prior NFIB California Podcasts

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