Sales Tax Update

To:   MCA Members

Re:   Sales Tax Update

Date:   10/2/07

On Thursday, September 20th the Governor issued a press release describing part of his proposed tax package. It included extending the sales tax to four services: "In addition, the sales tax would be applied to some services including health clubs, tanning parlors, massage services, and real estate property management services." While the language used is favorable for the carwash industry, we can not be assured that carwashing may not be thrown in later. There is a long way to go before the Governor's proposal becomes law.

The process is a follows. The Governor's proposal will be introduced into the legislature, either in a special session this fall, or in January during the regular session. The General Assem-bly will no doubt modify the Governor’s proposal, or may pass a wholly different package. For this reason, the MCA will continue to be vigilant and monitor developments. MCA lobbyist, Frank Boston, has organized meetings for MCA leadership with key members of the House and Senate. MCA officers Dave DuGoff and Bob Heid have attended 15 meetings with legislators and have included Neil Hitchcock, Toni Maria Pellerito, Pam Piro, Benson Rice, Wayne Shepard, Will Speace and Scott Wolfkill for support. Special thanks are due to Benson, MCA's first president, for coming to most of the meetings. The concept of extending the sales tax to services is gaining nationwide attention. It was part of recent tax revision debate in Connecticut and Michigan. This is an issue that we need to be prepared for. Think for a moment of what 5 or 6% of your gross sales would mean to your bottom line. Could you pass it on the customer? Would your sales volume suffer if you did? This lobbying effort is one of the most important ways the MCA stands up for the indus-try. Your membership dues enable MCA to vigorously and professionally represent your interests as carwashers. As we have fought drought restrictions in Maryland and Virginia, our strength comes from our unity of purpose. If you know of an operator that is benefiting from these efforts vicariously, please urge them to become a member soon. Thank you for your continued support.