Citizens across the commonwealth will see a six percent increase in many of their bills for things like gym memberships, car repairs or modifications, veterinarian visits, and landscaping work.
The increase is attributed to a new sales tax for services that fall under 12 business categories ranging from personal health and hygiene to janitorial work. Starting July 1, these businesses will be required to pass down the six percent sales tax to their customers.
The increase was passed by state legislators at the conclusion of the Kentucky General Assembly in mid-April. State lawmakers claim that adding sales tax to these specific services will help generate roughly $436 million that can be used for things like education and social services, but critics say the new taxes will benefit the wealthy.
An article from the Lexington Herald Leader cites a quote from Jason Bailey, who says “much of the revenue gained by the sales tax expansion will pay for the income cuts, which disproportionately benefit the wealthy.” Bailey is the executive director of the Kentucky Center for Economic Policy in Berea.
“That’s why I call it a tax shift and not tax reform,” said Bailey.
The 12 services that will be taxed beginning July 1 are:
- sales of extended warranty services on personal property like cars, cellphones/computers etc.
- Admission fees for events and entrance to public and private facilities for sporting events, programs, displays, concerts, plays, movie, fairs, exhibits or other entertainment/amusement activities including bowling alleys, swimming pools, gyms/fitness centers, golf courses, tennis courts, and health spas.
- veterinarian services for small animals like dogs or cats but the tax will not apply for large animal services for pigs, horses, cattle, sheep, goats, etc.
- campsite rental services at campgrounds or parks including recreational vehicle parks. However rentals for a continuous period of at least 30 days will be exempt.
- pet care services for grooming and boarding, pet sitting, training, or walking.
- non-medical weight loss and diet services
- laundry and dry cleaning services
- limousine services that provide a driver
- landscaping services for lawn care, tree trimming or removal, design work, maintenance and even snow plowing or removal
- janitorial/cleaning services for residential or commercial properties including carpet, upholstery, window cleaning etc.
- tanning salons or parlors with booths, beds, or spray tanning services
- labor services for repair or installation of personal or digital property. An example would be labor bill for a new screen for your cell phone or for a mechanic to install or repair parts on a car.
The Kentucky Department of Revenue is asking businesses and consumers to visit taxanswers.ky.gov for further information or for questions related to the recent tax law changes.
By Adam Capps