Resource Library: Taxation of Professional Services
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Americans for Tax Reform Letter to the Nebraska Senate
On January 30, 2024, Americans for Tax Reform sent a letter to members of the Nebraska Senate urging them to oppose any proposals that would impose new or higher taxes on Nebraska families, individuals, and businesses.
The Economic Case Against Professional Service Taxes
The economic case against taxes on professional services is strong. Reasons include complex administration, regressivity for consumers, outsized impact on small businesses, and tax pyramiding.
Volcker Alliance Issue Paper: “The $195 Billion Challenge: Facing State Fiscal Cliffs After COVID-19 Aid Expires”
In a new research report, the Volcker Alliance explores the potential fiscal cliffs faced by states that used one-time state and local fiscal recovery funds for recurring expenses.
Research: Data Indicates Most Accounting Services Are Business Services
Attempts to impose sales tax on accounting services are nonsensical: the data shows that accounting services are by definition business services, and thus do not fit in any rational sales tax base.
Letter to Alaska House of Representatives
Read the letter from the Professional Services Alliance to the Alaska House of Representatives regarding HB 373.
Lessons Learned from West Virginia
Read a recap of West Virginia’s 2021 attempt to expand sales tax to services. Just like other states that have pursued these policies, lawmakers ultimately decided it was the wrong move for their state.
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.
Past Failed Attempts to Tax Services
Many states have pursued attempts to tax services, and each time the law has been repealed shortly after it went into effect.
Chicago Services Tax Proposal: Poor Tax Policy
A new tax on professional services in Chicago represents poor tax policy, poses substantial administrative problems, and, most importantly, will have a significant and negative impact on Chicago’s economy in both the near and long term.
Other Resources
Click the buttons below to read what other organizations and economists are saying about professional service taxes.
Americans for a Modern Economy Op-Ed Against Utah Tax
California Foundation for Commerce & Education: Services Tax Study
Americans for Tax Reform Letter: R
eject Utah House Bill 441
Study: Economic Impact of Taxing Professional Services in Minnesota
Council On State Taxation Letter:
COST Opposes Utah HB 441