Revenue secretary says LA wouldn't be an outlier in taxing landscape, massage services

Tax proposals

NEW ORLEANS, LA (WVUE) - Some local landscapers and massage therapists do not like Gov. John Bel Edwards' proposal to have the state sales tax applied to services like landscaping and massages. But the head of the Department of Revenue said the change would make up for revenues the state would lose by removing the fifth penny of the sales tax and that some other states tax such services.

Lisa Loup, who owns AMK Landscape Services, thinks the tax is a bad idea.

"The higher the prices go the less, you know, we won't get the work is what's going to happen," she said.

On Airline Drive at The Plant Gallery, company president and owner Kenny Rabalais said he is against the proposal.

"The charge on service that means all the labor and I think it's a horrible idea and would certainly hurt my business," said Rabalais.

He said the sales tax is already charged on the materials.

"We're already taxed on the product, meaning all the plant material, all the soil, all the chemicals, anything that's a product we're already taxed on or we have to charge and pass it along and collect the tax from our clients," he said.

Loup said just the collection of the sales tax would cause headaches.

"It's another paperwork nightmare that you'd have to hire another accountant and other people to do for you just so you could collect the tax," she said.

"It raises prices in the long-run for the consumer," added Rabalais.

Another service the governor proposes to attach a sales tax to is massages. The idea is part of the recommendations submitted by a state task force that examined ways to improve the state's budget and overhaul the tax code.

"Massages, not medical massages, but other massages would be taxed," said Tulane economist Steve Sheffrin, who served on the task force.

But a local representative of the massage industry fired back with strong opposition.

"I'm totally against the state associating licensed massage therapists with escort services and attempting to tax a massage.  We are licensed healthcare providers in Louisiana and legitimate massage therapy establishments are regulated by our state board.  Nobody can arbitrarily decide for us if my clients' massage was health-related, or not," said Marie Humphries, a massage therapist and President of the Louisiana Chapter of the American Massage Therapy Association.

But Keith Thompson, also a licensed massage therapist said if the tax is fair and equitable it is not a bad idea.

"I would imagine it's not such a weird idea considering you know a lot of states are under a lot of financial pressure to meet budget obligations," he said.

Not all who provide professional services would be affected by the governor's proposals.

"No lawyers, no accountants, no engineering firms, they're out of it," said Sheffrin.

"How they're picking and choosing the different industries I don't think it's fair," added Rabalais.

The head of the Louisiana Department of Revenue issued the following statement:

"The taxation of services is a direct recommendation of the HCR 11 Task Force, a bipartisan group created by the legislature in 2016, to expand the sales tax base and allow for a reduction in rates, said Louisiana Dept. of Revenue Secretary Kimberly Robinson.  "With the fifth penny of the state sales tax rolling away that will mean less revenue for the state coffers.  The task force sees this as a viable option for increasing tax dollars and cleaning the remaining pennies of the sales tax.   Currently, massage services and landscaping are not subject to the sales tax.  These are taxable services in other states, including Texas.  Under the Governor's proposal, the sales tax would be applied to the massage or landscaping service.  All cable and satellite service would be subject to the sales tax.  Currently, customers pay tax on the rental of the equipment from the cable or satellite provider.  This proposal would make the actual service taxable."

Rabalais and Loup said businesses already pay a significant amount of taxes to the state.

"Numbers of taxes from inventory tax to franchise tax, it's just tax, tax, tax," he said.

"We're paying licensing taxes, we're paying payroll taxes," said Loup.

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