Sales Taxes for Service Businesses?

In case you have not been following the news coverage on Georgia's Speaker of the House Rep. Glenn Richardson's tax reform bill, here is a rundown.

A RESOLUTION proposing an amendment to the Constitution so as to provide for the comprehensive revision of provisions regarding taxation and finance and abolish most state and local taxes; to provide for a comprehensive flat tax to be known as the fair tax; to provide for procedures, conditions, and limitations; to provide for local revenue guarantee proceeds; to provide for applicability of prior tax provisions; to change certain provisions regarding certain defaulters; to change certain provisions regarding specific powers and limitations of powers of the General Assembly; to change certain provisions regarding other or supplementary appropriations; to change certain provisions regarding appropriations; to eliminate certain provisions regarding the motor fuel tax; to provide for the submission of this amendment for ratification or rejection; and for other purposes.

In other words, Richardson wants to do away with property taxes and tax services at 4%. However, I can see counties doing the same thing to services that they have done to the sale of goods - every county has added to that base 4% - not to mention occupancy taxes where most counties and/or local municipalities have added another 5-8% tax on hotel stays in addition to sales taxes. Some of the news articles even hint at this possibility.

Georgia General Assembly - Summary of Bill

Americus Times-Recorder - Positive net gain for Georgia since tourism is the second largest industry, demand for services will not change, but demand for land ownership will go up and help landowners, particularly farmers, reduce the cost of business.

Augusta Chronicle - Some are worried that it will hit low- and middle-income people the most, the ones that do not own land.

Augusta Chronicle - The change would hurt businesses, as most outsource at least some of their services (accounting, legal, janitorial), and this additional cost is passed on to the consumer.

The Brunswick News - Some are pointing out that it would help the housing markets not to have property taxes.

And from other Georgia Blogs...

Safe As Houses talks about the property tax deduction that you will have to forego on your federal income tax return.

Tondee's Tavern opposes the bill because it will hurt Georgia businesses, particularly ones near one of the state borders.