We’re not discretionary

What do cable or satellite television, sports and concert tickets, car repair, golf greens fees, marina fees, movies, and hair cuts have in common with legal fees?

These are among the services that won’t be subject to Michigan’s 6 percent sales tax.

The exemptions were part of some last-minute negotiations that helped push through a budget deal much earlier today to avoid a state shutdown.

But services such as bail bonding, bondspersons, consulting and lobbying, private investigators, couriers and messengers, and document preparation will get hit with the state sales tax.

According to an Associated Press report, state Treasurer Robert Kleine explained that “[e]xtending the sales tax to some services starting Dec. 1 would bring in an estimated $614 million for the 10 months remaining in the fiscal year at that point, or about $750 million annually.”

So, why were some services hit with the sales tax and not others?

A quick look at a partial list of what’s being taxed and what isn’t might leave you scratching your head.

The AP offered this explanation, attributable to Kleine: “The tax is designed to apply to services that people don’t have to use if they want to avoid the tax.”

The Detroit News had this take from Kleine: “lawmakers took care to skip services that are deemed unavoidable, such as plumbing and car repairs. ‘It’s discretionary only,’ he said.”

So, a lawyer’s services are considered just as essential as getting that leaky faucet fixed or that gummed-up carburetor overhauled.

Good news for law firms and their clients.

But having the untaxed services of an attorney, plumber or mechanic is apparently just as vital as being able to watch The Weather Channel or teeing one up and smacking it straight down the fairway without the state taking a cut of the action.

Governor Jennifer Granholm and state lawmakers are keeping mum about this for now.

But a lot of explaining will need to be done later.

2 thoughts on “We’re not discretionary

  1. An explanation is needed, indeed. This reeks of “pick and choose” which will only further fuel public cynicism. Oh sure, we can wax about access to justice for the little guy (or gal). But let’s be realistic … In the big picture, it is businesses and insurance companies who pay the most in attorney fees (and who presumably would have seen their expenses go up with such a service tax). That’s why attorney fees fell into the other “green fees” category. This whole package stinks, is embarassing, and would not have withstood public scrutiny in a “normal” legislative process.

  2. Of course, the best way to get tax revenue is to tax something people can avoid if they don’t want to pay the tax! Duh!

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