Tax on Services in Michigan

Discussion in 'Business Operations' started by Class Act, Feb 8, 2007.

  1. Class Act

    Class Act LawnSite Member
    Posts: 11

    Anyone from Michigan????....Can't wait to see how hard it will be to compete now. Will everyone raise prices to cover extra costs? First high gasoline prices to deal with and now this. Sometimes I just want to give up..The competition is killing me as it is and now I will have to deal with the competitors that will pay no "service" taxes and will take cash only as payment..
  2. Billz

    Billz LawnSite Member
    Posts: 181

    did they pass that?
  3. Budget Lawn Service

    Budget Lawn Service LawnSite Member
    Posts: 3

    I find this proposal to tax service completely absurd.I personally own a Lawn Service co. a small service business that is struggling to make ends meet here in Michigan.With gas prices always in flux my bottom line change from day to day and now you want me to sell this tax to my consumer.No way , all this will do is drive down the prices of an already very competitive service industry.Oh and lets not forget that the majority of the service indusrty is fuel by the elderly in our state who cannot perform these services for themselves .So lets tax the old folks who can barely afford these services to begin with but have NO choice because they cannot physically do the things they were once used to doing.
    I thought your plan was to bail out Michigan .Maybe you should consider a proposal where ALL Michigan residents can bail Michigan out,not this discriminatory taxation.
    Here's an idea,tax the grocery stores on all non prepared foods.Everyone in Michigan will go grocery shopping thus everyone will help help bail out our state
  4. Grassmechanic

    Grassmechanic LawnSite Silver Member
    Posts: 2,697

    As predicted here last year. I can't understand why anyone would re-elect that liberal bimbo.
  5. Class Act

    Class Act LawnSite Member
    Posts: 11

    I have cut my costs and did without trying not to pass price increase onto my customers. This will be the end. I WILL have to raise and if I lose the client to a cheaper price, I wish the next guy luck. He will be right behind be. 15 years in Biz and have seen many go by the way side. Too bad it is they who have ruined this industry. When will the competition learn they are working for free. I have seen a 2007 lawn quote for services....I charged that price 15 years ago. It doesn't make sense. OH YA....Minimum wage will increase too....Who will end up paying? I am tapped...It is make it or break it time
  6. grant087

    grant087 LawnSite Member
    Posts: 184

    so did they pass this or not? or when is it suppose to go through?
  7. Grassmechanic

    Grassmechanic LawnSite Silver Member
    Posts: 2,697

    Not passed yet, grant087. They should have deal on the table by June 1. It will go in effect Oct. 1. Contact your state senators and reps and let them know where you stand.
  8. mastercare

    mastercare LawnSite Senior Member
    Posts: 289

    You called granholm a Bimbo? I have another word for her. It's not as nice.

    I don't think that 2% will bother customers as much as it bothers me. On a lawn that you charge $30 for, you're looking at $0.60. But, that ignores the administrative costs.

    Taxing the service means that WE are responsible for collecting taxes from our customers and then mailing a check to the state on their behalf. What people don't understand is that there is administrative costs from collection to Bookkeeping, tax filing, office staff, and CPA fees that will all increase. I think the general public doesn't realize that we can't just add 60 cents. We'll have to add closer to $2 per cut. I don't think that we as business owners should be forced to collect taxes for the government, and spend OUR money to do them a favor.

    This industry is tough enough already and prices aren't going any higher. I also have a problem with that BIMBO increasing taxes on tobacco and alcohol. Not that I'm a large consumer of either of these products, but why should people with bad habits (or enjoyable, depending on your view) foot the bill for everyone else. If taxes need to be raised to get MI back on track, shouldn't everyone be taxed equally if they're going to benefit equally from a healthy economy?

    I have no problem speaking politics openly when it affects my ability to earn a living. I will vote republican until the day I day just based on financial policy.

    The old theory of trickle down economics is for the democrats. Their idea is to raise taxes, and spend the money on government projects, parks, bridges, etc. The theory is that this creates jobs and benefits everyone.

    Prime the pump economics is a republican idea which encourages reducing the size (and expense) of government, reduce taxes, and put the money back in people's pockets. They will spend it, which encourages business growth.

    For those of you who don't understand the difference let me make a few points:

    1. When you go home at the end of a hard work day...who earned your payceck? YOU DID! Why should the government take more of your money and spend it for you. It's your money!

    2. When the government does take your money how do they spend it? Well, they give their good business buddies and lobbyists money without even bidding out the work. They overpay for everything, using YOUR MONEY! We've all seen the stories about government waste, $600 toilet seats, $300 hammers, "business vacations" etc. This is your money. You would spend that money and get more value for your dollar.....and then your money would stimulate more economic growth.

    3. Some democrats argue that the government will spend the money to stimulate the economy, and giving it back in the form of tax cuts (it was ours to begin with) will encourage people to stick it in the bank instead of spending. Well, there's two arguments to this: When you stick it in an investment, or even the banks, they are using your money. Corporatoins use it to complete more projects, banks use it to create loans for other consumers. this menas more cars and houses are bought, businesses have the capital necessary to complete more projects, and the cycle grows. And, besides, the national savings rate is -1%!!! So, we are experts at spending our money! We spend more than we make as a country!

    When money is spent, it creates jobs. It's that simple. The quesiton is who should be spending that money. If I earned it, then let me spend it. Not a government who will spend it foolishly, and then charge me more money to pay the gov't officials who have been chosen to SPEND IT FOR ME!

    I don't care if you believe in protecting the environment, illeagal aliens, polution, abortion, Schools, etc. All of these issues are important.. but bottom line is that based on my pocketbook, and all of yours, we should vote republican every time. Maybe some day this state will wake up and stop listening to all of the union leaders, all of the poor communities, and all of the people on governemtn assistance. They're being brainwashed into voting for "the working man" (democratic angle) not even realizing that they're asking for money to be taken out of their pockets.

    Sorry for the rant....but this has gotten me fired up the last couple days.
  9. Class Act

    Class Act LawnSite Member
    Posts: 11

    You are 100% correct....But living close to me you know getting $30 for a lawn is like pulling teeth...Guys have signs up for $12 with hidden cost ofcourse if you want it edged and trimmed. But that comes no where near $30! I have been in business for 15 years and have made more money 15 years ago. Now I am working more and harder for less. And not only do accounting fees increase but so do mechanic fees. I am so fired up over this. I have done my damnedest to keep my price from going up, cutting cost everywhere. Now istead of an increase going in my pocket..It will once again just pass through my hands....and my bottom line remains the same.
  10. mastercare

    mastercare LawnSite Senior Member
    Posts: 289

    Hey neighbor:

    I feel your pain. My average price for a residential lawn (7-8k sq. ft) is right around $25. Even that is hard to get. Only my large houses ($600-700k) have lawns big enough to charge $30, and those poeple are even trying to get the neighbor kid to do it for a few bucks less.

    I'm so angry I was thinking of sending a letter to every customer of mine with a pre-printed envelope addressed to their congressman. I think there will be plenty of people taking cash for work this summer, and cutting all of our throats. My only consolation is that someday they will put a rock through a window, or anger a customer to the point where it catches up with them. But, for now, our bids are gonna be about $2 higher just becuase of this stupid tax. Now, ignore that they don't pay taxes, or insurance, and they can bid another $7 below our cost. We can charge $24 for a lawn, and the scrubs will be able to charge $13 and come out with the same profit!

    I don't want our work environment to get as bad as FL, but I wouldn't mind if we had to have a license, insurance, and pay taxes as a requirement to be in this business. Just like the Dept. of Ag. checks Pesticide licenses all summer, we should have people handing out fines to people operating businesses illeagally. The only problem with this idea is that it costs taxpayer money to do it!

    Like you, I'm trying to provide a decent life for my family. We work longer hours than the typical time-clock puncher. We take risks with our family's money hoping that we'll get a decent return on our investment. With all the hours we work, the sweat we give, and the entepreneurial spirit we have, shouldn't we be better off? Not as long as the MI unions and the poor continue to put democrats into office.

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