Michigan Taxes Graphic Design Services

[Selkirk]

Michigan Taxes Graphic Design Services (http://www.procata.com/blog/archives/2007/10/01/michigan-taxes-graphic-design-services/).

Yeah, I'm spamming my own blog post here, but I think there are some Michigan based site owners here.

The gist of it is we now have a 6% sales tax on things like logo design, but not programming, hosting or web design. Now what is the difference between "graphic design" and "web design?"

Who knows? Its a bad law.

[Todd W]

I didn't read your article but are they saying only printed graphic design? That may fall into a product and not a service?

[Chris]

Grr... The way government works you know that abolishing a tax is harder than lowering one. I thought they should raise the sales tax, if anything, but instead they add a new tax on certain services. If they had raised the sales tax, they could always lower it, but do you ever see them abolishing an existing tax? Governments don't do that.

Plus, now they've added a ton of paperwork for businesses that never had to deal with it before. That is lost productivity right there.


I didn't vote for Jenny.

[KLB]

The worst thing is that it puts a huge burden on really small one man operations who are not really capable of complying with complex regulatory requirements. The last thing any state should do is make it harder for someone to create a job for them self, especially if the unemployment is really bad to begin with. Simply not understanding how to complying with this new sales tax law will turn hard working individuals into law breakers. In general, sales taxes should not be placed on services, they should only be placed on retail goods.

[Chris]

Oh ya Ken, they also taxed lawn services & snow removal... you know those guys are the types to be able to deal with a bunch of paperwork requirements.

[Selkirk]

I suspect that before long, they'll expand the tax to all services because of revenue shortfalls and compliance problems.

[Chris]

And of course that is just a headache waiting to happen.

Sales is easy, it is defined, you are selling a product for a price. What consistutes a service?

Technically, if your neighborhood kid mows your lawn for you and doesn't collect tax he'll now be breaking the law.

What about say, credit card processing, that is a service banks offer, do you tax it?

Then there is the whole medical snafu, anything that ads any cost to medical bills is going to be met with huge opposition, and rightly so.

[Doug]

I have lived in Michigan for all 20 years of my life and have always wanted to stay in this state. The events of the last couple weeks have almost changed my mind. This is the first time in my life where I have actually considered moving to another state after college. I'm worried about spending all that money and time to get through college and still be managing the pizza place that I manage now, I don't want that.

I don't think that the budget problem is solved, I would be willing to lay money on the fact that we will face a similar or bigger deficit this time next year as unemployment climbs and state population falls.

Boy she really "blew us away" in five years just like she said.

[KLB]

It sounds like in a goal of fixing their budget, Michigan could really compound problems by making it too difficult for really small one and two person businesses to survive and compete.

[Doug]

I agree with that and I feel like they are making it very difficult for them.