Default Style Register
Daycare.com Forum
Daycare and Taxes>State Wanting to Tax Services
Mom2Two 12:44 PM 03-07-2019
So our state house of reps has been hashing over a proposed new tax bill. They actually introduced it just a few days ago, only two weeks or so before the end of the session. And it's a huge, far reaching bill.

But the big thing the supporters want to do is to broaden the tax base by taxing services the same way as sales tax.

As of yesterday, they did take out that part of it, but a good portion of the state (including daycare providers) was very upset and contacting congress from last weekend on.

They wanted to tax health insurance premiums 1% and many other services 3.1%. For a while, we were concerned that us daycare providers would have to charge/pay this sales tax.

In the end, we got word that there was a list being formed of excluded purchases, and daycare was put on it. I am not sure if daycare was on this list from the beginning though, or if it took us drawing the problem to their attention.

It would have been so problematic for daycare. For starters, a lot of what we charge for is food, materials, utilities etc that we already pay sales taxes on. Some of us that if the bill passed, we could give a split bill, like how car mechanics split for labor and parts, but then that wouldn't work well, because daycare parents would want to take the whole amount as a fed deduction.

Currently there are two states that tax services, and we were almost going to be the third. I just wanted to warn what might be coming for others if your congress starts looking at this approach. Apparently there's a problem as we all move to being more digital, where the tax revenue from regular sales tax is shrinking somehow and they want to tax service to make up for it.

If someone in your neck of the woods starts dreaming stuff like this up, just make sure that daycare services aren't taxed!
Reply
Tags:taxes, taxing services
Reply Up