California introduces sales tax proposal on veterinary services

Sacramento

— Calif. Governor Arnold Schwarzenegger is reintroducing a sales tax that would include veterinary services.

The proposal was introduced to offset a growing budget crisis in California. In response, the California Veterinary Medical Association is joining efforts with other associations in opposition to Schwarzenegger’s sales tax proposal.

On Sept. 1, representatives from CVMA testified at the state Senate and the Assembly Revenue and Taxation Committees joint hearing on the Governor’s Tax Reform proposal.

Previous failed attempts sought an 8 percent to 9 percent tax on certain professional services, which included veterinary services. The newest proposal would mandate a 3.59 percent tax on all services, including veterinary surgeries, routine exams and pet food purchases, to name a few. Accordingly, the present tax rate would be slashed by 1.5 percent.

Additionally, there is a proposal to cut the present income tax structure down to two brackets (from seven) and lower the highest rate from 9.5 percent to 6.5 percent. The corporate tax rate would be trimmed from 8.84 percent to 6.5 percent.