Sales Taxes on Services
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The United States’ economy continues to shift away from goods towards services. As a result, many states are considering expanding sales taxes to more services so they can collect more revenues. This is especially prevalent in states struggling to balance their budgets or that rely more heavily on sales taxes.
Expanding the sales tax to cleaning services would increase prices for consumers, could decrease demand for these services, and create new compliance costs for businesses that don’t already collect a sales tax.
Seventeen states, plus the District of Columbia, already tax janitorial services: Connecticut, Florida, Hawaii, Iowa, Kentucky, Louisiana, Maryland, Minnesota, Nebraska, New Jersey, New Mexico, New York, Ohio, Pennsylvania, South Dakota, Texas, and West Virginia.
Three of the states that already tax janitorial services plus five that don’t have considered expanding the sales tax to more cleaning services this year. To see if your state is one of the states considering taxing cleaning related services, click here.
ISSA Will Continue to Track and Engage
ISSA believes the trend of states looking to tax services will continue as states consider ways to change their tax code or generate more revenues. ISSA Advocacy will continue to monitor and weigh in on this and other tax issues affecting our members. For additional information, or questions regarding taxes, other policy issues, or ISSA’s advocacy efforts, please contact ISSA Director of Government Affairs John Nothdurft at Johnn@issa.com.
Updated June 2019