TAXING BARBERSHOPS, BEAUTY PARLORS, AND DRY CLEANERSFOR IMMEDIATE RELEASE:
10/16/2000 CONTACT: ARTHUR PURVES phone: 703 281-0176 e-mail: purves@fcta.org VIRGINIA COMMISSION TO RECOMMEND TAXING BARBERSHOPS, BEAUTY PARLORS, AND DRY CLEANERS
Arthur G. Purves, president of the Fairfax County Taxpayers Alliance, reported today that at its October 31 meeting in Charlottesville, the Commission on Virginia's State and Local Tax Structure for the 21st Century proposed a recommendation for imposing a sales tax on services, such as haircuts and dry cleaning. Currently Virginia sales taxes are imposed only on goods, such as food and clothing, but not on services. This recommendation violates the Commission's charter, as defined in House Joint Resolution No. 578 (1999) and Senate Joint Resolution No. 401 (1999). These resolutions state: "The commission is specifically directed to develop revenue-neutral recommendations that will not increase Virginia's per capita state and local tax burden." (Visit http://leg1.state.va.us/cgi-bin/legp504.exe?991+ful+HJ578ER and http://leg1.state.va.us/cgi-bin/legp504.exe?991+ful+SJ401ER). "To be consistent with its charter, the Commission should propose offsetting reductions in other taxes, but did not," Mr. Purves stated. The Commission is also considering changing state income tax rates, deductions, and tax brackets, which were set in 1920. The Commission chairman, Dr. Thomas R. Morris, asked the staff to propose changes that were both revenue neutral and that would increase revenues. At the October 31 meeting, the Commission also reaffirmed its recommendation approved on October 2 to eliminate the requirement for counties to have a referendum before imposing meals taxes. Commissioner James W. Dyke, of McLean, is pressuring the Commission to recommend regional transportation authorities with power to sell bonds. While Mr. Dyke states that such authorities should not have taxing authority, in his written recommendations presented to the Commission on October 2, Mr. Dyke wrote that these authorities should have taxing authority. This is also advocated by the Northern Virginia Transportation Compact announced November 14 by a coalition of business leaders. Mr. Purves commented: "Both the tax commission and business are ignoring the enormous tax increases already imposed at both the Fairfax County and state level. Tax and spending increases in excess of population growth and inflation since 1975 give Fairfax County an extra $1 billion and the state an extra $8 billion per year. About four percent of these increases go to transportation." The Commission will release its report on December 1, 2000. To take effect, the General Assembly and governor must approve the Commission's (www2.institute.virginia.edu/taxstudy) recommendations.
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