December 21, 2006
Sales Taxes on Legal Fees
States are constantly on the hunt for more sources of tax revenues. With our increasing service economy, their lustful eyes often fall on services fees.
Hawaii has just made the move to subject legal fees to sales taxes and you can bet they will not be the last. Of course, they couldn’t make it simple, so the tax varies from island to island.
I picked up the new Hawaii sales tax law when one of the Juris client service team members sent out an e-mail about Jay Fidell, partner in the Hawaii firm Bendet, Fidell, Sakai & Lee. The law firm is a long-time Juris client. Mr. Fidell had been interviewed by TV station KITV in Hawaii about the impact of the new tax laws. Juris got a nice plug from the partner, who remarked, “This tax increase will cost businesses thousands of dollars to reprogram their accounting software; our firm was fortunate—we use an accounting package by Juris.” Juris® already handles sales taxes, including multiple jurisdictions.
The moral of the story is that it is just a matter of time before sales taxes come to all U.S. law firms. So when and if you start considering a change in your business systems, be sure that sales tax capabilities are on your list of requirements.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Operations by Tom Collins