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Resa,

A logical extension of your reply to question three about taxes on services is this: 

Your company provides services to a customer base NOT limited to clients that feel restricted for whatever reason to do business with a Kentucky based company (I don't know too many people who do feel that way, other than for convenience for some services.)

If I am your client, and you send me a letter out of the blue telling me you are sorry, but the KY Legislature has now added a 6% Sales Tax to my biill, and, of course, I cannot expect you to eat it (meaning you expect me to eat it), I have another choice than to eat it - I can go elsewhere, away from Kentucky, where I will feel I am getting value. Especially if I am a non-Kentuckian who could care less about 15 year old pregnant coal miner's daughters.

Then you are faced with a very difficult decision: to give me a "discount" and keep my business, thereby protecting your income (albeit lessened and harder earned) AND the state taxes thereon (not lessened, since they now get to tax you a little less on income - the loss of 6% income tax on the lost 6% sales tax you eat, but now get a BIG raise, a whopping 6% of your GROSS bill); 

OR to take a major cut in income by foregoing the clients business, thereby depriving yourself of a valued client AND the state ANY piece of the action;

OR, move your business to another "business friendly" jurisdiction (hopefully one that will not present you with the same problem in the near future.)

Hal

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