Friday, January 04, 2008

The Services Sales Tax May Be Coming Back To Florida

The state of Florida doesn't currently tax domestic services such as residential cleaning, window washing, or carpet cleaning. In 1987, the state enacted a bill that mandated domestic service companies tax it customers. The bill was revoked within the first six months. However, state legislators are contemplating the bill again.

Click here to read the full story. (Caution: lots of boring tax talk)

Commercial cleaning is currently taxed based on the local sales tax rate. For example, if we clean an office in Escambia County, then we are required to collect an additional 7.5%.

Now taxes aren't necessarily a bad thing. After all, our government must receive revenue from its people somewhere along the way. But here's the problem when you tax a domestic service.

The professional cleaning companies are the only ones taxing its customers. Not only that, the unlicensed cleaners get to increase their rates because of the 7.5% increase forced on professional cleaning companies.

As a customer, you think cleaning is simple, mundane and easy. As a customer, you think that the only tangible difference is price. You don't care about sales taxes. If you did, you wouldn't hire them now. Because hiring an illegal cleaner means that you are skipping payroll and income taxes. So you hire the cheaper alternative. The illegal alternative.

So yes, this new law scares me. Professional cleaning companies are already working behind the eight ball. Professional cleaning companies have to pay more than illegal cleaning companies.

For the record, I'm not against taxes. In fact, I'm all for taxes. Our government needs its people. But a tax system can only work if everyone plays fairly. And since a domestic service such as house cleaning is invisible, there's no way to enforce the measure. Which means that it's not fair.

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