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News & Press: Sacramento Report

Bill Proposing Tax on Services Sees Continued Widespread Opposition Despite Amendments

Tuesday, May 15, 2018  
Posted by: Heather Starkey
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A bill seeking to impose a sales tax on services in California, Senate Bill 993 (Hertzberg), continues to face substantial opposition from a widespread coalition led by CalTax and including CLTA, arguing that it would result in a significant tax increase. The bill is scheduled to be heard in the Senate Governance and Finance Committee on Wednesday, May 16th.

Recent amendments to the bill would impose a three percent tax on the purchase of services by businesses, and would establish a mechanism that attempts to reduce the retail sales tax on the purchase of goods by two percent if the estimated revenue loss does not exceed certain amounts. The bill also provides exemptions for certain services, such as health care, education, residential building construction, rental of real property, child care services, labor, etc., that are provided by businesses engaged in specified NAICS code activities.

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