California lawmakers consider a new tax for salon services

ALAMEDA, Calif. (KGO) -- State lawmakers are considering a new service tax that would be put on hair and nail salon services.

Now many small business owners are having mixed reactions to the news.

Studio Barber Lounge in Alameda has a staff of barbers who work as independent contractors. For them, keeping their haircuts affordable and competitive are critical.

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"He's a little kid, I charge $15. For him raising my taxes, I'm going to have to charge him $25 and he can't afford that," said Raul Lindsay, a barber at Studio Barber Lounge.

Lindsay believes it will dissuade some customers from leaving a tip in a service-driven profession.

"We're a cash carry business, so right now anything that's taken out of our pockets, it's going to affect our family," said Lindsay.

The price for a manicure, your dry cleaning bill, a cut and color, would all increase with a possible 8.5 percent service tax. That means a $79 haircut could cost you nearly $7 more.

"Everything is so expensive, you've got to have two and three jobs just to survive," said Lindsay.

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The proposed bill could also hit customers in the pocketbook by raising the price on car repairs, yoga classes, and even gardening services.

The Board of Equalization's Vice Chair, George Runner is against the measure.

"It would collect about $2.3 billion, that means $2.3 billion coming out of consumers' pockets," said Runner.

The bill's language says the money would go to infrastructure, education, and healthcare. A senate committee is set to take up the tax on services idea next week.