New October Taxes

October 1, 2019, marks the onset of millions of dollars in new tax and fee increases on some of our most consumed goods and services. These taxes, along with those that went into effect throughout the summer, were included in the Democrats’ state budget passed this year and will undoubtedly have a significant impact on families, seniors, and businesses throughout our state. I voted against this budget because of these many tax increases.

In an effort to keep you informed, I have listed some of the tax increases going into effect next week below:

Digital Goods – The current tax on digital goods of 1% will increase to 6.35%. This increase applies to a myriad of online services, including, but not limited to, TV streaming services (e.g. Netflix, Hulu), online music (e.g. Spotify, Apple Music), eBooks, and in-app purchases made on smartphones.

With an increased percentage of residents streaming and downloading their content (e.g. music, movies, smartphone apps, etc.), as opposed to watching on traditional cable television or listening on the radio, this budget hiked taxes on digital consumers. This is an effort to capture a new revenue stream as people flee cable for lower cost options.

Prepared Foods – Consumers will see a 7.35% levy on certain prepared foods. Last week, the Governor directed the Department of Revenue Services to release a revised bulletin backing off their original interpretation of what items were to be included with this tax increase. However, despite the governor’s current position, many food items we buy from grocery stores are still at risk of being taxed in the future. I signed a petition requesting a special session to remove this portion of the budget legislation. However, with no support from Democrats in the legislature, this special session will not be called, and it is possible for the grocery tax to be reinstated.

Motor Vehicle Trade-In Fee – The current motor vehicle trade-in fee of $35 will increase to $100. Instead of being rewarded for trading in their old cars for new, more efficient vehicles, car buyers are being punished with a tax increase. This tax hurts not only families looking to upgrade their cars but also businesses that rely on fleets of vehicles to facilitate their everyday operations.

Alcohol – The excise tax on all alcohol sales, except beer, will increase by 10%. This significant increase will be felt by package stores small and large, as well as consumers looking to make alcohol purchases for family gatherings and events.

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