Could the new Michigan service tax be repealed?

The Freep has an article about business' anger over the new service tax. Here's the rub:

"The businesses say they fear the tax will raise the price of their services enough to cost them clients who decide to go without the service, such as janitorial, or to change to an out-of-state company that might avoid the tax.".

That's the real problem. The issue is really that companies will start to get some of these business-to-business services from Ohio, Indiana, or even further out-of-state companies. Why buy your accounting service in Monroe when you can get it for 6% less in Toledo? Why buy your payroll services in Kalamazoo when you can get it for 6% less in Chicago? Why use an Ann Arbor IT company when you can just use one from Dallas that costs 6% less?

An even better question: if you're thinking about starting an IT, HR consulting, accounting, or any other professional service company, why not put it in Ohio, Indiana, Illinois, or Wisconsin instead of Michigan and make an extra 6%?

Service tax repeal is plotted
Detroit Free Press

LANSING -- Business groups inflamed by the new sales tax on many services are plotting a campaign to repeal it, just days after it passed.

"There are a lot of discussions going on," said Todd Anderson of the Small Business Association of Michigan.

He said measures include a possible petition drive -- which could place the issue on a statewide ballot -- or merely lobbying the Legislature to rescind or make major changes in the new tax.

The tax on services is a key piece of the state budget deal lawmakers finished early Monday, hours after a deadline passed to shut down state government. It will generate about half the new tax revenues needed to help erase a $1.7 billion deficit.