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Economic and Tax Policy Pitfalls for Nebraska of “Tax Swap” to Reduce Property Taxes

Proposals offered in Nebraska to reduce property taxes by expanding sales taxes — a “tax swap” — pose numerous pitfalls that should be considered.

Accounting is a Business Service and Doesn’t Belong in the Sales Tax Base

Attempts to impose sales tax on accounting services are nonsensical: the data shows that they’re by definition business services, and thus do not fit in any rational sales tax base. Public finance experts agree that consumption taxes, like the sales tax, should not include business inputs. More than 90 percent of accounting services are either business inputs, or are sold to governments and nonprofits. Subjecting them to sales tax isn’t tax reform.

Lessons Learned from Utah

Read more about Utah’s recent attempt to expand sales tax to services in 2019 and 2020 and how the effort ultimately failed.

Lessons Learned from West Virginia

West Virginia recently joined the long list of states which have embarked on an idealistic path to expand the sales tax base broadly to services — only to find this road always leads to failure.