Services tax hits local businesses, Falling Springs
Rodney King, owner of Bluegrass Lawn Care, took a break from mowing at the old Ruggles building on Crossfield Drive to discuss the matter.
“I don’t know. It’s kind of scary in one sense. I think it could cost me a little business. We (mow for) a lot of older folks that are on a budget, and I know (the 6 percent tax) … adds up to $10 or $15 a month, but over a period of a year, it adds up to several hundred,” he said. “So I think it could price me out of a few properties, and then I’m kind of also worried about the … weekend warriors around here that don’t have logos on their truck – that don’t really pay the taxes, don’t do this that and the other. … They’re not paying the 6 percent.”
King said most of his customers don’t know about the law that took effect July 1.
“My phone’s going to ring off the hook (with people) wondering what’s going on,” he said.
King said he’s sending all his customers a letter explaining that at the end of this month, when he bills for July, he’ll have to tack on the sales tax. He said he also wondered whether he’ll lose customers.
“They might cut back on a little landscaping, or cut back a little on this to compensate for it,” he said.
King, who said he employs eight people during the summer, said he’s also being hit by higher gas prices, and may negotiate with residential customers who say they can’t afford to pay more for lawn care.
“I’ll knock two bucks off each cut or something. I don’t want to lose your business over it. I’ll split it with you, I’ll meet you in the middle. I’ll work with them however I can to do it,” he said.
About 85 percent of his clients are senior citizens, he said.
“I’m thinking it’s going to hurt them more than anybody else,” King said.
A few blocks away, at The Body Shop on 109 Crossfield Drive, Tommy Jones watched as his younger brother Casey painted a car. A few days later, Jones would have had to charge the customer an extra 6 percent.
Last Friday, he said language in the notification he received from the state led him to believe that he may not have to charge sales tax “if the transaction does not include retail sales of taxable property.” He said he’d study the matter further on a state Revenue Cabinet web page, www.taxanswers.ky.gov.
“There’s a lot of labor in my work. We get paid by the hour, according to most insurers. It’s all kind of regulated, the way we write estimates, every bit of the labor,” Jones said.
He estimated repairs to a typical vehicle involved in an accident require $2,000 worth of labor.
“It’s just causing me to have to do more paperwork. And it’s going to make $120 towards going to total the car out, as opposed to getting it fixed,” said Jones.
Jones said he didn’t believe the new law would jeopardize his business, but isn’t happy about having to pass the higher cost along to his customers – or spend three to five hours a month on new paperwork.
“I’m going to have to go through every single estimate I get from Allstate, State Farm, Farm Bureau, Geico, Safe Auto – I’m going to have to pull up every single estimate every month and go back and calculate how much there was labor in it,” Jones said.
He’d prefer to spend that time working on cars, he said.
“It’s hard for me to find five extra hours for me to work on something of my own,” Jones said.
In Indiana, Falling Springs Arts and Recreation Center executive director Rich Pictor took time off from a youth baseball trip to discuss the effect of the new law on his customers.
“Because of House Bill 487, all parks and recreation departments across the state were notified that effective July 1, we must now charge 6 percent sales tax on all admissions, memberships, concessions and rentals,” Pictor wrote in an email.
His solution, for now, is to lower the price of day passes to $5.66 for adults and $3.77 for youths.
“With the 6 percent sales tax, this will keep costs to enter at $6 and $4. We plan to do this just for the remainder of the summer until after the outdoor pool closes on Labor Day,” Pictor wrote. “I really don’t understand why our state officials decided to tax gym memberships and admissions. With the rising obesity rate in Kentucky, it just makes it that much harder for people to afford a healthy lifestyle.”