NFIB State Director Julia Hammond says proposals to raise tax rates and expand the sales tax to a wide range of services would increase costs for small businesses and the Virginians they serve.

“These proposals will do little besides drive up costs for consumers and paperwork and compliance costs for small businesses, which operate on thin margins and usually can’t afford dedicated accounting and compliance teams,” Hammond said.

“What’s worse, these tax proposals would increase the cost of living, working and doing business in Virginia, even as Governor Spanberger and lawmakers say they’re looking for ways to improve affordability,” she said.

“Our members already rank taxes as the No. 1 problem facing small businesses, so it’s hard to justify new or higher taxes when Virginia is reporting a significant surplus,” Hammond said. “Small businesses are dealing with higher labor costs and rising prices across the board. Adding new or increased taxes now would make it even harder for them to grow, create jobs, and serve their communities.”

Under the proposal, the sales tax would be expanded to include many services commonly provided or used by small businesses and their employees, including:

• Admissions to entertainment and amusement venues
• Gym memberships and use of fitness, recreation, or sports facilities
• Personal services such as hair care, nail care, skin care, tanning, tattooing, and other nonmedical cosmetic services
• Dry cleaning, laundry, and clothing or shoe repairsPet grooming, boarding, walking, training, and related animal care services
• Residential home repair and maintenance services, including carpentry, painting, plumbing, electrical, and HVAC work that does not require a permitResidential landscaping and lawn services
• Residential cleaning services, including housekeeping, window cleaning, power washing, and pool servicingVehicle and engine repair, maintenance, and cleaning
• Repairs to appliances, electronics, computers, jewelry, musical instruments, and other personal property
• Delivery, packing, and shipping servicesStorage services, including self-storage and climate-controlled storage
• Travel planning, event planning, catering, and interior design services
• Digital services, including streaming services and online storage

“These are not luxury services,” Hammond said. “They are everyday services people rely on and the kinds of small businesses that exist in nearly every community in Virginia.”

“With a surplus on the books, now is not the time to raise taxes on Main Street,” Hammond said. “If lawmakers are serious about affordability, they should be looking for ways to ease financial pressure on small businesses and their employees, not pile on new taxes.”