Sales tax on services to become a reality

Michigan will impose a new six-percent sales tax on non-essential services starting Saturday, December 1st.

The move is catching many business owners by surprise.

Some thought the tax had been repealed, in light of the headlines a repeal bill in the State Legislature has made lately.

Despite all the talk, the last time the repeal bill was considered was Wednesday, when it was defeated by the State Senate.

That means, in all likelihood, Michigan’s sales tax will officially go to the “dogs,” on Saturday.

“Honestly I think there's probably better areas to tax than dog grooming,” said Greta Dalrymple of Top Notch Grooming in Niles.

While dog groomers will be subject to the six-percent tax, people groomers will not. “I honestly think that human haircuts should be charged along with the four legged haircuts,” said Dalrymple. "It's both a service, so I think part of this is unfair the way they're singling out some industries versus others.”

Some in the carpet cleaning industry also feel singled out.

“I’ve only been in the service industry now a couple of years, but what I see is most service businesses are one-man operations,” said Steve Rutherford of Care Free Carpet and Upholstery. “It definitely hurts the little guy more than anybody.”

While carpet cleaners are subject to the tax, chimney sweepers are not.

While financial advice will now be taxable, karate lessons will not.

And while manicures and pedicures will be subject to the new tax, haircuts won't.

Tanning is also on the list of taxable items. At Maui Tan in Niles, they worry about the impact the service tax could have, given “Maui’s” proximity to the Indiana border.

“They'll probably end up going where its cheaper,” said Amber Valentine, “they'll end up tanning somewhere else if they're paying more here.”

Michigan State Representative Neal Nitz today apologized for the way the tax has been handled.

“We had always been telling the public that we were going to repeal it,” he said, “it was a bad idea.”

“I really am quite ashamed of being a part of the process,” said Nitz. “it’s something I’m not proud of, or happy the way it’s running.”

The following is a list of items that will be subject to the six percent sales tax:

Bail bonding services
Tattoos and piercings
Carpet cleaning
Dating services
Financial investment counseling services
Gift wrapping services
Lawn care services
Locksmith services
Manicure and pedicure services
Private detective services
Sun tanning

Here is a partial list of services are that exempt from the tax:

Chimney cleaning services
Chiropractor’s services
Dry cleaning services
Hair care (trimming, styling, shampooing, coloring, or waving)
Karate instruction services
Real estate services
Snow plowing services

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