Taxes on Tuxedos and Tummy Tucks?
October 31, 2005
A recent story in the Lansing State Journal reports that some officials in Michigan are calling for an expansion of the state’s sales tax to services.
“With state revenue stagnant for years amid a struggling economy and no end in sight, there’s a growing chorus of calls for Michigan to follow the lead of some other states and tax services.” Full Story
However, some local business owners are voicing concern over the proposed new tax, on grounds that it would “dissuade their customers and cut into profits.” What’s even more interesting is the fact that many states currently have selective excise taxes on services. For example, although Michigan currently does not tax services as a general rule, tuxedo rentals are taxed. According to the story:
“Arkansas residents pay a tax on tattoos and body piercings. Tummy tucks and hair transplants are among services taxed in New Jersey. And Nebraskans pay a few extra bucks when they hire private detectives or handymen.”
You can read more Tax Foundation research on sales and selective excise taxes here.