A recent hike of 1 percent tax hike proposed by the governor of California has upset lumber sellers as they are afraid it will affect business
The tax is expected to garner up to $35 million a year to pay for the regulation of commercial forest lands and fire prevention, reports the Los Angeles Times.
The hike of 1 percent tax on 2-by-4s, plywood and other forest products has displeased some lumber yard owners and they want no part of the blame from the customers.
Home Depot spokesman Stephen Holmes pointed out that, "The new 1% tax singles out the hard-hit housing industry still struggling to recover from the economic recession, ” reports the newspaper.
"This tax is going to hurt business, The new 1% tax hike, combined with a quarter-cent rise in the state sales tax, which will be 9% in the city of West Hollywood, for example, could cause homeowners to scale back remodelling projects,” said Basil Alexander, manager of Anawalt Lumber in West Hollywood.
There are some people who are not opposed to the hike. According to Mike Winn, president of the California Building Industry Association, the tax will add only nominally to the cost of construction. Further elaborating to the newspaper, he said that it will be just an additional $115 to the cost of building a 2,000-square-foot new home.
His 3,200-member organization does not oppose the governor's legislation, reports the newspaper.
The California Forestry Association and supporters also believe that it will enable the Californian forest product companies to compete with out-of-state timber firms. The tax hike will be effective from Jan. 1, 2013.