Michigan Businesses to Attack New Sales Tax

Over 50 business groups along with many individual Michigan Businesses plan to form a coalition in hopes of influencing lawmakers to amend the newly expanded 6 percent sales tax to services, which include carpet cleaning and tree trimming as well as a large assortment of other business consulting services.

Legislature claims the new taxes will help balance the state of Michigan’s budget.  Most businesses and associations are livid about the new taxes, claiming the legislators do not really know how much the Big Three spend on services.

Chuck Hadden, activist for the Michigan Manufacturers’ Association, said big companies based here in Michigan, including the automakers, could face huge tax liability through the sales tax extension.

The new taxes cover 23 types of services all taking affect on December 1, 2007.  This gives the Michigan Treasury Department adequate time to print new tax forms and provide all the necessary instruction to the effected businesses.

The state income tax also was raised from 3.9 percent to 4.35 percent, effective Oct. 1. This tax increase is said to raise $765 million a year.

Small businesses are going to be hit the hardest, since they are both buyers and sellers of such services as landscaping, office cleaning and mailing.

NEW MICHIGAN SERVICE TAX OF 6% APPLIES:

Utilities, including telephone and electricity
Hotel, motel and bed and breakfast rentals
Laundry service contracts, with some industry exceptions
Carpet cleaning
Private mailbox rental
Word processing, PC rental and fax services
Management and human resources consulting
Scientific and technical consulting
Environmental services
Security, armed guard, patrol and protection
Financial investment advice
Janitorial and maid (home cleaning) services
Lawn care and landscaping
Snow removal
Ticket offices and agencies - all types
Bus tours, sightseeing excursions
Tourist attractions
Ski resorts not offering accommodations
Tour operators and packagers
Packaging, sterilization and assembly services
Astrology
Baby Shoe Bronzing
Bail bonding
Balloon-o-grams
Coin-operated blood pressure testing machine services
Bondspersons
Check room services
Coin-operated personal service machines
Comfort station operation services
Concierge services
Consumer-buying services
Credit card notification services
Dating services
Discount buying services
Social escort services
Fortune-telling services
Genealogical investigation services
House-sitting services
Social introduction services
Coin-operated rental locker services
Numerology services
Palm-reading services
Party-planning services
Pay telephones
Personal fitness trainers
Personal shopping services
Coin-operated photographic machine services
Phrenology services
Porters
Psychic services
Rest-room operation services
Shoeshines
Singing telegrams
House-sitting services
Wedding chapel services
Wedding planners
Consulting (including lobbying)
Tanning
Escort services
Massage
Administrative services (like payroll)
Private investigators
Labeling
Business service centers
Carpet and upholstery cleaners
Couriers and messengers
Document preparation services
Self-storage
Transit and ground passenger services
Taxicabs and limousines
Office administration
Travel agents
Interior design
Commercial art and graphic design
Medical illustration
Warehousing and storage
Weight loss and diet centers
Repair of shoes, appliances, computers
Repair of tools, clothing, electronics
Repair of office machinery, watches and jewelry
Alarm system services
Word processing, secretarial services
Resume preparation
Editing and proofreading
 
EXEMPT FROM THE NEW MICHIGAN 6% SERVICES TAX:

Cable television
Sports and entertainment tickets (but not ticketing fees)
Golf
Movies (but not ticketing fees)
Legal services
Accounting services
Medical services
Architectural services
Haircuts and hair care (but not other spa or salon services) 

Tim Somers
MichiganBusinessHub.com