NFIB chief fears sales tax talk

September 3, 2010
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Small business is being treated better and better by the Indiana General Assembly, says the state director of the National Federation of Independent Business, but the coming session could be tough.

Barbara Quandt noted in the group’s report from the 2010 session this week that 28 of the 100 members in the House voted with the NFIB all of the time on issues of greatest importance to the organization. That was better than last year, and she thinks the rate might climb in the coming session because legislators appear to want to help create jobs.

“We’re very fortunate in Indiana to have a legislature that by and large listens to small business,” Quandt said.

Still, she’s concerned about Statehouse chatter of extending the 7-percent state sales tax to services. That would clobber her members from two directions: Small firms would see their sales get hurt, and, because they buy lots of outsourced services, they’d also pay the tax.

“We’re going to have to be watching really, really closely,” she said.

The state is certainly desperate for revenue. What are your feelings about taxing services?
 

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  • stupid idea
    INDIANA FISCAL POLICY'S JOHN KETZENBERGER SHOULD BE ASHAMED FOR PUSHING THIS.
  • Equity and Fairness
    Just as an income tax is more appropriate than property taxes in today's economy, so a sales tax that treats the purchases of services equally with the purchases of goods is also more appropriate to the structure of our economy, and better reflects the elements of society that put a demand on the provision of government services.
  • BAD for IN
    On paper, it may look as if Indiana could raise more revenue if it starts taxing professional services. In reality, a service tax will put Indiana businesses at a huge disadvantage. Taxing professional services is a bad idea. Those in the service industry compete for jobs regularly with out-of-state companies. If Indiana companies are taxed for their work, they�ll be at a competitive disadvantage. A service tax will hurt local firms and drive away large firms with branch offices here, costing Hoosiers jobs. None of the surrounding states (Kentucky, Ohio, Michigan or Illinois) impose a tax on professional services, it will be tempting to go there for lower-cost services.

    In fact, only a handful of states across the country have such a tax. Florida, Connecticut and Michigan were forced to repeal the service tax, because the tax is difficult to manage, and did not bring the states the additional revenue windfall they had envisioned.

    If Indiana is serious about economic development ââ?¬â?? about promoting the benefits of working in Indiana and supporting Indiana companies ââ?¬â?? then state lawmakers quickly will dismiss any thoughts of taxing the service industry.
  • New Frontier
    If the government is so hard up for money, why don't they tap a new cash crop (marajuana) or legalize prostitution which isn't much different than what they do with lobbyists?

    Both would provide plenty of cash and create new jobs;)
  • Hey Mike
    Thanks for paying attention to what they Indiana Fiscal Policy Institute has to say, but please read the report before reaching a conclusion. The report, issued last October and available at www.indianafiscal.org, analyzes the state's sales tax, puts it in perspective of the rest of the country and estimates the revenue potential if the tax was extended to more services. We even include a scenario of what the state could do with that additional revenue. Nowhere in the report, however, does the IFPI advocate for its extension. That decision is best left to the General Assembly and those who do advocate for or against an extension.

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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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