Michigan’s Budget “fix”

October 3rd, 2007 by Justin Leave a reply »

So, part of the plan to fix Michigan was to increase the income tax. I’m not happy with this, but in all honesty “Welcome to Michigan: We only gank 4.35% of your income off the top” isn’t a whole lot worse than the previous 3.9%.

The real bitch is going to be expanding the sales tax to some of the services industries. I admit, I didn’t care too much about the issue because I trusted the media when I heard reports that they’d only be taxing a “few” services more. Then I see the list:

·Carpet and upholstery cleaning services

·Business service center services

·Consulting services

·Investigation, guard and armored car services

·Investment advice services

·Janitorial services

·Landscaping services

·Office administration services

·All of the following personal services:

-Astrology services

-Baby shoe bronzing services

-Bail bonding services

-Balloon-o-gram services

-Coin-operated blood pressure testing machine services

-Bondsperson services

-Check room services

-Coin-operated personal service machine services

-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 telephone services

-Personal fitness trainer services

-Personal shopping services

-Coin-operated photographic machine services

-Phrenology services

-Porter services

-Psychic services

-Rest room operation services

-Shoeshine services

-Singing telegram services

-Wedding chapel services, but not churches

-Wedding planning services

·Other travel and reservation services

·Scenic transportation services

·Skiing services

·Tour operator services

·Warehousing and storage services

·Packaging and labeling services

·Specialized design services

·Transit and ground passenger transport services

·Courier and messenger services

·Personal care services

·Service contract services in which the seller, in exchange for the buyer’s single payment, agrees to provide repair, maintenance, or replacement of 1 or more items of tangible personal property during a specific period of time, which services the buyer is not required to buy in connection with the purchase of tangible personal property.

·Security system services

·Document preparation services

·Mini warehouse services and self-storage unit services

Still with me? Good.

A former coworker shot me links today on this topic, as were both confused as to our status under “consulting services.” I must say, after following up I think the company that I’m employed with will most definately fall under that umbrela. We both work in IT (Information Technology) and we’re basically geeks for hire. You want a customized solution to problem X? We’ll build it! That kinda thing. This seems to fall under the larger umbrella of “consulting” accoring to the Michigan state government.

I could be totally wrong on this one. I’m sure I’l find out if I am, seeing as my employer will surely learn the ramifications of this legislation shortly as well as other people I associate with.

It’s easy to see what happens when your local dry cleaner needs to up your charges by 8% becaue of the law. Figure 6% for the actual tax an 2% for compliance. A pittance on a $30 bill, really.

What happens when you’re talking about a $150,000 deal? Yeah. Things change. You can’t really send your dry cleaning out of state, but you can damned sure send your IT projects out of state. What about the “use” taxes that are an extension of the sales tax? Will companies in Michigan that receive services now subject to the sales tax have to pay up on that even if they’re in Indiana? Or India?

I sure hope I read this thing wrong.

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6 comments

  1. The funniest item on that list is “Social escort services.”

    I was under the impression that most ‘escorts’ worked for cash. Good luck collecting on that.

  2. Josh says:

    Yeah … I think we’re screwed here.

  3. b

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