Service Tax Could Hurt Businesses

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From movie tickets, to cigarettes, to accounting services, Michigan businesses could be hurt by Governor Granholm's proposed 2% service tax.

"I can see a lot of problems with it," said one local accountant.

Don Pazan is the vice president of Mid State Tax and Accounting and worries the tax could drive away potential customers.

"If they have to pay a sales tax or a service charge for everything they're doing, they'll probably find the cheapest way to do it," he said.

When it comes to taxes that could mean more filings on computer programs from home. While accountants could suffer, other businesses don't anticipate any setbacks.

Area auto repair shops believe they'll have a constant flow of customers. Managers say unless you're a mechanic, you may not have any choice if you bang up your car.

"With our business you really don't have a second option," said Jim Rossman of Vision Collision. "If you want to have a high quality repair done and your car's disabled, it's going to be something you have to get fixed."

The average auto repair bill is about $1,800. Throw on the service tax for labor and your bill will be about an extra $14. The tax would generate about $400,000 from Lansing repair shops alone during the year. And while the tax may hit your wallet, it'll be a minor inconvenience for most businesses.

"It's going to be more book work that we have to keep up with but that's part of doing business sometimes," Rossman said.

A part of business the governor hopes will solve Michigan's budget crisis.\

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