SALES TAX SMACKDOWN: Association Gets Out Front

Posted on February 17, 2010 by LCT Staff - Also by this author - About the author

LOUISVILLE, Kentucky — For the third year in a row, the members of the Kentucky Limousine Association are hearing a familiar “ca-ching” among state legislators as they murmur about levying a sales tax on the “rich folks.”

A $1 billion hole in this year’s state budget has spurred rumblings among legislators of levying a 6% sales tax on luxury items and services, such as country clubs, green fees, and limousines. The state now does not levy a sales tax on chauffeured transportation services.

No formal bill has been proposed, but there are discussions at the committee level in the legislature, said Carey Fieldhouse, the president of the Kentucky Limousine Limousine Association and owner of R&R Limousines in Louisville.

To ward off a possible sales tax bill until the legislature finishes its business in March, Fieldhouse sent an e-blast to members that asks each recipient to click a link, enter a zip code that automatically brings up the names and e-mails of the state senator and representative for that zip code, and then send a message to the legislators.

“One of our [reasons] for protest is if you open up the Yellow Pages for Louisville, there are 50 limo companies, yet only about 10 that are legally authorized companies,” Fieldhouse said. “You’ll have illegal companies collecting taxes that they won’t remit.”

Fieldhouse also underscored the fact that for most operators, only a small fraction of clients are actually considered wealthy. “The majority are not. They are prom students and couples having a wedding who have saved every penny to get a limousine,” she said.

In an e-mail to the KLA, Fieldhouse further stated: “Small business understands that times are hard and money is tight, but repealing the sales tax exemption on services would make things worse, not better. We have to remind House and Senate members today that small business is the lifeblood of Kentucky's economy. We can't afford a sales tax on services. And in this election year, neither can anyone who hopes to get re-elected.”

As part of a form letter to e-mail representatives, Fieldhouse highlighted the five following points on why limousine companies are good community stewards:

1) Provide drug-free, safe, and reliable transportation during proms and graduations.

2) Provide hundreds of donated trips to area charities, helping to raise hundreds of thousands of dollars in Kentucky communities.

3) Encourage academic excellence through participation in student reward programs.

4) Provide women traveling with children with pre-arranged chauffeured transportation rather than taxi transportation.

5) Encourage designated driver program — encourages groups of people to carpool during a night out — keeping potentially drunk drivers off of our roads.

— Martin Romjue, LCT Magazine

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