PA may pass law on tax on lawyer’s fee…
Jan 15th, 2008 | By Michael L. Saile, Jr., Esq. | Category: Blogs, Saile & Saile LLP NewsThere is currently a bill before the Pennsylvania legislature to assess a tax (sales tax) on the cost of legal fees. Traditionally there has been no sales tax on legal services. This is probably because we have a constitutional right of a jury trial and the right to legal representation.
Legal fees are expensive, especially if the matter involves litigation. I estimate that hourly rates in PA and NJ range anywhere from the $200/hr to over $1,000/hour. Contingent legal fees like in a PA personal injury case sometimes exceed 45-50% of the personal injury recovery.
A tax on legal fees could only have a harsh deterrent effect on an individual’s access to our court system. I am sure some of you think this would be a good idea.
My position is, if somebody does something wrong to you, you should have the right to fix that wrong. In the old days people used to fight to the death about to solve their argument. We, a more civilized society have our court system to fix a wrong. A jury of our peers will decide your matter based on the facts of your case and the jury’s common sense.
You should have access to an attorney if your case needs it. A tax on legal services will only hurt the poor and make our civil justice system more unfair. We urge you to write to your local Pennsylvania representative as ask him or her to oppose the Rohrer Amendment.
The author of this Blog, Philadelphia car accident lawyer, Michael L. Saile, Jr., Esq. of Saile & Saile LLP, Attorneys-at-Law focuses his practice on fighting for plaintiffs’ personal injury and car accident victim’s rights in both Pennsylvania and New Jersey. We handle all serious injury cases including, car accidents (both limited and full tort), wrongful death, slip & fall downs, construction accidents, Septa, NJ Transit, and other cases other cases. We are located just outside of Philadelphia in lower Bucks County. We also handle Philadelphia plaintiffs’ personal injury and car accident cases. Please visit our personal injury only website at www.pa-nj-injurylawyer.com for more injury information.
How the heck can they tax us for legal fees? Don’t we pay enough darn taxes as it is? We pay and pay and pay and all the beaurocrats do is waste the tax money we pay on non-sense! Stop giving it away to all of the dirty illegal immigrants that are here. That will save the government and the tax payers a few trillion dollars right there. Stop giving away our tax money to other foreign country’s that hate our guts no matter how much we give them in foreign aid. Make it a flat tax and get all of the illegal drug and gambeling money that goes untaxed in this country! ENOUGH WITH ANY MORE OR ANY NEW TAXES!! We have a right to be represented by a lawyer. They have manipulated the legal system in such a way that nothing can be done at all with out the services of a lawyer and now they are going to try to tax us some more on top of it???? This is friggin lunacy! Where will it all end?? ENOUGH WITH THE TAXING US TO DEATH!
If there is a sales tax, that means attorneys will have to pay a percentage out of their fee’s to the State, right?
Are other sevices taxed, such a a pcontractor who comes to paint you r house, if he paying a sales tax on what he collects as weel as an income tax?
Could not this extra sales tax that lawyers will be pay decuted staright off the gross income or net income they take in every year and report on tax return?
The sales tax, in this light, I think is a great idea to tak emoney form the fed and out it in states hands.
The extra State revenue from legal fee sales tax can actually then be used to help the poor by putting more money into programs to help the poor.
see, lawyers will not haVE TO PAY INCOME TAX ON THE MONEY THEY GIVE THE STATE FOR SALES TAX, …. I REALLY DO NOT SEE A PROBLEM HERE
No Jim you have it all wrong. Sales tax.
Justlike if you buy a car you need to pay NJ sales tax in addition to the cost of the car. Sales tax gets added to the cost of the product or in this case to the cost of the lawyer’s fee.
Therefore, the client (and perhaps a poor client) will now have to pay tax in addition to the legal fee. This would prevent some people from going to court to solve their dispute because it would be too expensive.
THE SALES TAX IS PAID TO THE STATE BY THE PERSON OR COMPANY COLLECTING IT, NOT BY THE CONSUMER.
When i go to buy a car as you say, im not paying the state sales tax, im paying it to the dealership, who then pays it to the State,( but not after making intrest on it in an account)
insterad of raising the attorney fees, nice attorneys would take the sales take out of their normal fee,in essence lowering the fee to covcer the sales tax, thuis lowering their income, and thus INCOME TAX
I HAVE IT RIGHT.
As sales tax is only paid to the State periodocaly, i believe quarterly, and lawyers do not lower their fees to cover the consumer, it is lawyers that will be making thousands of extra dollars in intrest beraring accounts that hold this tax money until they have to pay the State.
As a matter of custom and reality, all business add sales tax to the amount of the bill and yes the business collects it and transfers it to the state. It is the consumer who bears the tax.
Law firms are businesses and I am confident that the client will bear this new tax if it is passed.
Yes, however, it is not lke going to the supermarket, where every consumer pays the same price for goods.
Attorneys charge all kinds of different vand varying fees, even sometimes based on the clients ability to pay.
It certainly will not be clear when an attorney lowers his fee for a client because of certain circumstances.
My experience is that attoreys usually pick the fee out of thin air , based on the clients income sometimes.
I would think that most attorneys use non-interest bearing checking accounts for their general business account as we do.
Well, now, for the sales tax thing, you can open up a intrest bearing account and make money on the sales tax you collect, before having to hand it over to the State.