Last year the House/Senate leadership and Governor tried to impose a far-reaching tax proposal during the last weeks of the legislative session. The proposal included a tax on professional services, including attorney fees. It excluded medical and real estate services. Thanks to the efforts of literally hundreds of attorneys who stepped up to the plate, the Legislature pulled the proposal and appointed a Task Force to study the whole tax structure and how various shortfalls and taxing discrepancies could be addressed.
The Task Force held eight public hearings up and down the state and held many interim meetings to revamp and refine its recommendations to the Legislature. The Bar was represented at literally every such public hearing by me, Dickson Burton and others. Virtually every issue was cussed and discussed, with a final report prepared to go to the Governor, who then called a special session to address the proposal.
The Bar’s opposition to a tax on attorney services is an Access to Justice issue. Making legal assistance more expensive serves as a “barrier to necessary help at critical times."
During a special session last week, the legislature passed a tax reform bill that substantially changes the tax structure of the state. The income tax rate was reduced while sales tax was fully implemented on food and applied to petroleum purchases. This reform also included a tax on many services in the state, including streaming services and ride sharing services like Lyft and Uber. Notably absent in the list of services to be taxed is the legal sector and other professions. This is due in large part to so many of you taking the time to contact your legislator with your concerns.
We genuinely appreciate the Legislature (and especially the Lawyer-Legislators) for their willingness to take on the tough issue of broadening the tax base and addressing tax modernization. It’s been a difficult process and they are sincere in wanting to help.
Please continue to stay involved. The tax reform task force is funded until the middle of next year and could be made permanent. As noted by many of the task force members, “tax reform” never ends. To paraphrase Winston Churchill, it may not even be the beginning of the end, but it is, perhaps, the end of the beginning. Stay informed. Stay involved. Stay active.
Thanks for all you do to support the legal profession.