With the recent announcement that California Governor Schwarzeneger’s proposal to raise 4.4 billion in taxes to reduce a budget shortfall, there is some talk such as……
The Governor’s office said, “Raising taxes is never a good idea, but in this extraordinary situation, there is no question that new revenues must be brought into the state to protect education and vital services.
The Governor is proposing broadening the Sales and Use Tax to the following services beginning February 1, 2009: appliance and furniture repair, vehicle repair, golf, and veterinarian services.
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Based on an initial analysis of auto body repairs processed through AutoClaims Direct’s Directlink system for 2008, an increase in the sales tax along with the taxation of labor on auto body repairs would increase overall severity between $95 to $115 per auto damage claim. This is only a preliminary figure but this gives some indication regarding the ramifications of such a move.