OHIO Service providers begin adding state tax to fees

The new law makes things complicated for some small business owners.
COLUMBUS (AP) -- On a typical Saturday, clients crowd Temple Tattoo and Body Piercing in Gallipolis. Once that flaming skull covers a shoulder or a ring hangs from an eyebrow, customers slap a few $20 bills on the counter, and owner Rich Thomas quickly moves to the next tattoo.
As of today, however, a $40 navel piercing costs $42.50 and a typical tattoo is $63.75 instead of an even $60, because of the 6.25 percent sales tax in southeast Ohio's Gallia County.
"I'm going to have to get a calculator out," said Thomas, known as "Rich T" to his customers. "I become less efficient with my use of time."
Small businesses are entering a new world of change-making and bookkeeping now that Ohio's 6-cent sales tax applies to several services.
"I have to get something to keep change in," said Tsehoye Abebe, a driver for Columbus-based Bobcat Cab Service, which charges fares in dollar increments.
A trip to the airport from downtown is about $18, and a rider usually pays with a $20 and doesn't ask for change, Abebe said. The 6.75 percent tax in most of Franklin County adds $1.22, leaving 78 cents for a tip.
"We're not going to get any more tips," Abebe said.
Lawmakers passed the expansion along with a penny increase of the sales tax to help balance the state's $48.8 billion two-year budget.
Affected businesses
The services include storage, tanning, manicures, massages, satellite TV, dry cleaning and laundry service, some delivery charges, taxis and charter buses for within-state rides, and towing.
Local taxes, averaging a penny, also apply. Cuyahoga County has the highest local sales tax at 2 cents.
The Ohio Department of Taxation mailed 300,000 letters to businesses that already charge the tax, in case they offer the newly taxed services, spokesman Gary Gudmundson said. Another 100,000 went to businesses that never charged sales taxes before.
The department had to rush to find and notify them all within a month, he said.
Criticism
Some business owners say the tax is unfair. Thomas asked why it doesn't apply to haircuts, coloring or styling.
Andrea Lynch, a licensed massage therapist in Columbus, said she worries the tax might spread to other professions overseen by the Ohio State Medical Board, such as chiropractors, dentists and doctors.
"This is like getting your foot in the door," she said. "Either they should make everyone do sales tax or no one."
Lynch is advising clients to get prescriptions for massages, making them exempt from the tax that adds $3.38 to a $50 hourly rate.
"That's not a lot of money. It's the principle," she said.