Sales tax on massage and spa services in NC? There is still time to speak up and make a difference!
If you've been reading my blog, twitter, facebook or newsletter entries of late, you know about the push by some NC legislators to add sales tax to personal services, especially "pleasure services" such as massage therapy, facials, hair cuts and pedicures. As of this writing, licensed massage therapists have been exempted from the proposed sales tax that I have previously written about (though this could change) because they are classified as "licensed health care professionals" in North Carolina's General Statutes. Obviously, no group should be singled out from other health care providers (chiropractors, physicians, physical therapists, etc.) to be taxed just because the service they provide is usually enjoyable. This is especially true since massage therapy services are not covered by insurance but are paid for entirely by the consumer.
Unfortunately, other personal services are still currently included in the proposed tax. Many spa, salon and other service businesses that will be affected by it have already seen a huge drop in revenue and are fighting just to stay in business all as a result of the economy. As personal care services are often the first thing to drop out of people's budgets, I suspect the tax - if approved - will not just be "passed on" to the consumer but rather absorbed by the business owners instead. Adding a tax to personal services will hurt these businesses and professionals and force many to close which will in turn hurt product and equipment manufacturers and other vendors that serve the industry.
Time is of the essence! Please take a few minutes today or over the weekend to write your representatives or the members of the NC House Finance Committee and NC Senate Finance Committee- contact lists are attached to the links and also included in other blog entries. You can also click here to visit the website for the NC Legislature to find out who your representatives.
I also encourage you to share this information with your local media, professional association, colleagues and clients. Special thanks to Massage Magazine, Skin Inc, DAYSPA, Spa Opportunities, SpaClique.com and the Day Spa Association as well as everyone who has gotten involved in helping me to get the word out. Keep it up!
Categories: Events and Publicity, General
Tags: day spa Spalutions NC legislature NC LMBT sales tax
Dear Felicia, I have written my legislators already, but I will do so again.
I am a former (retired) teacher, and the NCAE us supporting this legislation. That's how I learned of it, and then I wrote to the legislators and to the NCAE as being opposed.
The way I understand the bill, it would also require people who do services like lawn service or house cleaning, concierge services, pet or babysitting, etc. to pay the tax. I am not sure if it will include plumbers, heating and AC people, electricians, and carpenters, etc., but it extends the tax to a large number of mostly independent contractors and sole-proprietorships.
This is a recipe for cash transactions that involve underreporting of income and lower income tax revenues. The NCAE is proposing a general sales tax of 5%. I think that is lowering the tax across the board then adding it to the service industry. I don't know if this includes county taxes. If it does, it would raise the tax overall.
At any rate, the NCAE is a powerful lobby. We need to act now to counteract their influence. As teachers lose their jobs, they are not thinking of service providers or considering the ramifications of this legislation. They are also writing their legislators in hope of improving their own conditions.
You are right that MTs, spa workers, and hair stylists should not be singled out, nor should anyone who is trying to supplement his/her income with odd jobs during this economic disaster. Independent contractors and sole-proprietors are already hard hit.
The tax runs counter to encouraging entrepreneurship and creating new jobs.
Furthermore, the sales tax form is complicated. It is not designed so that if you sell $x you pay $x. MTs, spa workers, and hair stylists will be able to handle it, but there are many other service people who will simply ignore it, costing the state money to enforce the law.
I support education in NC. I spent 34 years of my life doing a job I loved. However, I love massage, too. We cannot finance education on the backs of the service industry. If we revamp and expensive, unwieldy, and child-unfriendly testing program in the public schools, we can find a great deal of money that could better be used on teacher salaries, supplies, textbooks, and materials. We don't have to tax the service industry if we spend already existing education funds more wisely.
Please write your legislators to oppose this bill.
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Suzanne -
Your thoughts are very insightful and spot on! I wonder if our legislators have considered this point of view (before you wrote them.) Thanks for sharing them with everyone here
Felicia
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Any masseuse or instructor at a school of massage is going to tell you how important massage is to our health. It is too bad that something like sales tax even has the possibility of getting in the way of our ability to afford relaxation.
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