Calif.
CPAs say tax on tax services is a tax on taxes
In
response to reports that Gov. Arnold Schwarzenegger may recommend taxes on
services in order to compensate for a shortfall in the state budget, the
California Society of CPAs warns this will harm the state’s economy and create
an unnecessary burden on small businesses, tax consumers for filing taxes, and
eventually prompt businesses to move their business to other states.
Additionally, businesses that pay sales taxes on services they use will have to
raise the prices of the products they sell to consumers to compensate.
The
CalCPA opposes any effort to impose a tax on
services, said Teresa Mason, chair of the 32,000 member association. “Consumers
in California already pay among the nation’s highest sales tax. If accounting
services are taxed, people and small businesses will be paying a tax for having
CPAs and tax preparation services prepare their federal and state returns.
That’s essentially a tax on taxes.”
The
California Society of Certified Public Accountants (www.calcpa.org) is the
nation’s largest state accounting organization.