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News & Press: Sacramento Report

Sales Tax on Services Proposed

Tuesday, March 20, 2018  
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Senate Bill 993 (Hertzberg) would impose California’s sales tax on services, although with a few exemptions. The exemptions are for health care, child care, education and insurance payments subject to gross premium tax. Escrow services and legal fees paid in connection with claims are not exempt. But businesses with gross receipts less than $100,000 in the preceding four quarters are exempt. The bill includes a Legislative finding that the state needs to reform its tax law to mitigate the impact of recent federal tax law changes. Because it is a tax bill, it requires a 2/3 vote of the Legislature. A coalition led by the California Taxpayers Association, and including CLTA, is opposed to the bill.

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