Governor Kasich has proposed a 5% sales tax on legal services, saying that they are “non-essential.” Ignoring for a moment the minor detail that the right to “Assistance of Counsel” is mandated by the 6th Amendment to the United States Constitution, this is simply a Bad Idea ™ for many reasons.
Tell the person whose house is getting foreclosed that an attorney is not essential. Tell that person that even though economic hardship probably got them there, it’s going to be even more expensive to stand up to that big bank. Tell the person falsely accused and facing prison that an attorney is non-essential. Tell the parent fighting for custody of their child that an attorney is non-essential. Tell a veteran struggling to get benefits that an attorney is non-essential. Tell an abused spouse that a divorce attorney is non-essential. These are fundamentally life-altering issues, and adding a tax to legal fees for these folks will strip many of them of the ability to get a lawyer. Under this tax, even legal services for wrongly convicted death row inmates are considered non-essential.
What about Ohio’s economy? Do we no longer want to bring in business and create jobs? Within the legal industry, paralegals, secretaries, administrators, and other staff will be hurt by the increased cost of their service. Outside the legal industry, businesses big and small need lawyers. You’ve now added 5% to their legal overhead. Think they’ll stay in Ohio? This is a job killer. Big companies that can staff their own legal departments may be able to avoid the tax, but small businesses that rely on outside counsel will be severely impacted.
47 states don’t tax legal services. Florida and Michigan tried it but repealed the tax. There’s a hint in there somewhere.
The bill is expected to go to a vote in mid-April. The Cleveland Metropolitan Bar Association has more information and samples of letters to send to your local state legislators.