Written by Gordon Webster, Jr.
The California Chamber of Commerce has identified its 28th job killer bill in Sacramento this session, and this one is aimed at federal tax reform that is “disastrous for California.”
To help “provide tax relief to middle-income and low-income Californians,” SB 993, introduced by Sen. Bob Hertzberg (D-Van Nuys), would impose a 3-percent tax on services purchased by businesses.
The CalChamber identified this one as a job killer “because because it adds another layer of taxes onto California companies, raising costs, and puts them at a competitive disadvantage.”
In a press release from Hertzberg’s office, it notes that the services targeted for the tax include “high-end business services, such as those provided by lawyers, consultants, and accountants for corporations and other high-income businesses.”
But the CalChamber also points out that it would also tax day-to-day operational needs like janitorial services. While large businesses can avoid paying the taxes by bringing some of those functions in house, it’s the small businesses who won’t have that luxury.
“The burden of complying with this new tax will also be more challenging for small businesses that provide services — as they likely have limited resources to set up a new tax system within their companies. Additionally, such small businesses could suffer a loss of customers and revenue due to higher prices for their services,” according to the CalChamber.
The Trump tax cuts will provide the needed “tax relief” Hertzberg desires for low and middle-income Californians. All this bill would do is make us even more unfriendly to businesses.