New State Taxes: Phase II

May 31, 1992

Food items and home security services take the big hits tomorrow when Phase II of the General Assembly's sales-tax expansion goes into effect. Starting Monday, these items will be subject to the state's 5 percent sales tax. But the impact will be far from uniform, leading to consumer confusion.

For instance, if you buy popped popcorn, corn chips, pretzels, nuts or any mixture of these items at a grocery or market, you'll pay the tax; if you buy these items at a church social, school picnic, volunteer fire company outing or veterans bull roast, there's no tax.

Similarly, you will be taxed when you select from a grocer's salad bar, or when you order a party platter or pay for heated foods or sandwiches. You'll even have to shell out more to buy frozen desserts sold in containers of less than one pint. But read the fine print: If you buy a single ice cream sandwich, you're taxed; if you buy a dozen ice cream sandwiches, you're not taxed.

Sound peculiar? It is. Instead of making the sales tax more uniform, legislators simply added quirks to the existing hodge-podge of items subject to the sales tax. Starting tomorrow, all credit reporting firms will charge a tax for their services. So will security companies for residential and commercial monitoring, private detectives, armored cars, guard dogs, bodyguards and private guards. But in a further irony, there's no tax for installing security systems, just for using them.

We fail to follow the logic. In the nutty world of the General Assembly it makes sense to tax a janitorial service on the soap it uses to clean floors but not on the paper towels the company stocks in a customer's rest rooms.

Paying more taxes becomes especially aggravating when new levies are applied haphazardly. The General Assembly should have overhauled the entire sales-tax code. Instead, it chose the expedient route. No wonder the public is confused.

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