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    Who are the NERD fund donors Mr Snyder?

    Raise the curtain.

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    I recall 2007... (none / 0) (#7)
    by geek49203 on Fri Feb 12, 2010 at 08:44:41 PM EST
    I recall my comments about the services tax in 2007.  Long story short, I closed up what was left of my business due to that idea, which became law for a few days.  For a few days, hookers, exotic dancers, baby shoe bronzers and freelance IT people (I'm one of those) had to charge tax, while accountants, doctors and lawyers didn't.  

    Since then, I've worked for 3 state governments, and have a bit more insight.  My opinion, however, hasn't changed.  

    1.  The taxation dept of any state government is highly computerized.  So too are the compliance tools -- think "TurboTax" only for CPA firms, as well as Quickbooks, etc.  State governments are not known for producing fixes, additions, or replacements to software, especially when budgets are tight.  The first question I'd have is whether that IT structure can be in place by December.

    2.  The cost of compliance for small businesses might be considerable.  Take, for instance, a service provider (say, your local computer geek) who doesn't need to charge sales taxes, but now will be forced to do those monthly filings for service sales taxes.  In his case, the costs of compliance will probably be more than the actual money collected.

    3.  For the self-employed service provider, this essentially is a 6% income tax.  In a "normal" supply-demand environment, taxes are always passed along to customers, and over time, they probably will once a bunch of service providers go out of business.  However, in the near- and mid-term, the current price pressures will prevent price increases.  Heck, if I could raise my fees by 6%, don't you think I would?

    So, self-employed service providers, from the baby shoe bronzer to the town hooker to the local IT geek now pay 15.5% for FICA, plus all income taxes, plus property taxes, plus this new tax.  

    Of course, on the "up side" (okay, I'm kidding, but there is humor to follow) cops will now be able to use sales tax compliance as a tool to get your local hookers off of the street.  Seriously.  Unless they have an accountant.

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