Spring Bills: Tax on Service, Mobility... and an IRS Reorg?

AuthorFox, Jason
PositionCapitolBeat

Entering the Spring, the Legislature is in the midst of one of the busiest times of the year. Set to hear and vote on more than 2,300 bills, Senate and Assembly committees have their work cut out for them. CalCPA is tracking a number of bills touching upon a variety of topics--from a comprehensive tax on services to technical changes in various tax credits, as well as broad reforms to state licensing requirements to the regulation and taxation of cannabis.

As the year progress, stay tuned to CalCPA communications to stay current on the legislative and regulatory issues that can impact you and your clients.

CalCPA Comments on Tax on Services

Senate Bill 993 (Hertzberg) was introduced earlier this year. It would impose a sales tax on the purchase of certain business services--including accounting, legal and consulting. While the bill still lacks many specifics and has not been scheduled for a hearing, CalCPA has sent a letter to reiterate the CPA profession's opposition to this proposal and the ongoing concern with proposals for a sales tax on services.

The letter highlights the profession's main concerns with the business services tax outlined in SB 993 and the wide ranging implications of a comprehensive tax on senices. CalCPA's opposition particularly challenges the legislation's insinuation that the new federal tax laws make a services tax more easily managed by California businesses. However, SB 993 and the massive new business services tax would only create many more costly issues for California taxpayers, as well as further exasperate many of the current challenges taxpayers will be working through to navigate the new federal lax structure.

In addition, a sales tax on services would create immense and costly administrative challenges for the state and taxpayers; add a new tax burden to California consumers; further the competitive disadvantage of California businesses and cause disproportionate harm to small and medium sized businesses.

CalCPA will continue to be proactive in our advocacy efforts against SB 993, as well as the broader recurring policy proposal of a tax on services. CalCPA also will continue to work with a coalition of other service providers and pro-business groups for a unified front against a services tax.

You can read CalCPA's letter on SB 993 at calcpa.org/government-relations/advocacy.

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