MN Taxes on Service Industry
I don't sell CDs, tires, or books. There are no physical goods that trade hands when I build a website. I provide a service, not a good. For myself, as a web designer and developer, that means I do not pay sales taxes on my services.
No Goods, Only Services
As most Minnesotans know, Gov. Mark Dayton had introduced a plan earlier this year, proposing a sales tax on 'service industries,' the same as it does transactions involving physical goods. And a howl of protest from all sectors of the business community effectively killed this plan, claiming the loss of profits, loss of customers/clients, and a whole number of other ruinous effects.
I have nothing to gain from this new sales tax plan–it would likely cost me money. How much, I'm not sure. So I guess I'm glad it was defeated. I do agree, however, with the central argument Dayton and his supporters made. The current system is not fair. It was designed back when most of the economy was goods-based. Most of our economy is now service based. Why should someone pay sales tax for a selling a car, but not for designing an ad?
Is it fair?
The one argument I can come up with NOT implementing this new sales tax, and one I didn't hear much of in the debate, is just this - It can't fair until all the states implement it. If designing a website is only subject to sales tax in MN, and not the rest of the country, it is a disadvantage, I agree.
So that's where I stand:
1) Sales tax on services does sound fair
2) But it has to be implemented in all 50 states
What did you think?Tags: