California Income and Sales Taxes Increased – but lumber and paint too?

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By now you’ve experienced the sticker shock of seeing your first paycheck of 2013 and higher Social Security taxes.  If you live in California and have bought a new car or truck you’ve definitely seen how sales taxes have increased.  If you are rich, you’ll also be paying a lot more state income taxes.  Just ask golfer Phil Mickelson who is now looking to follow Tiger Woods in heading to the “less taxing” havens such as Florida.  When Phil goes to sell his house in Rancho Santa Fe he’ll also have to cough up an extra 3.5% as part of the new Medicare tax ($3,500 per $100,000, or an extra $245,000 on the sale of Phil’s $7,000,000 home). 

To spice things up a bit, you are also going to be paying higher taxes on lumber and paint.  Yes, California added a new 1% tax on lumber.  This new tax has lumberyards and hardware stores, still struggling to bounce back from the housing slump, dismayed. Assembly Bill 1492 also has some hidden costs (surprise).  The new tax applies to lumber and products that are at least 10% wood but there is a list of exclusions including doors, moldings and firewood. Wood shingles and fencing are taxed, unless the fence is made from re-manufactured wood – go figure.

The tax is projected to affect 200,000 contractors and stores and raise about $35,000,000 to replenish the dry coffers of the state Department of Fish and Wildlife, Department of Conservation, Department of Forestry and Fire Protection and the State Water Resources Control Board, all of which have a hand in regulating timber harvesting plans – and all of whom are not traditional “friends” of new development.  This tax comes on top of the new quarter-percent sales tax increase California voters just approved with Proposition 30.  Interestingly, AB  1492 was a success for California logging companies because it will eliminate the fee California companies had to pay for harvesting permits, which can be as high as $5,000, by passing the bill to consumers through the new tax.  This supposedly level’s the playing field with out-of-state timber companies that don’t pay the fees.

Again it should not come as a surprise that the new law and tax will save the state’s largest lumber producer Sierra Pacific Industries about $250,000 a year.  In protest of the new law and the timber industry’s lobbying that helped it pass, Eric Almquist, who owns Almquist Lumber in Arcata, said he stopped buying from Sierra Pacific — formerly a primary vendor.  Another new law called the “Paint Stewardship Law” was passed in 2010 and is just now being implemented.  Assembly Bill (AB 1343) is also known as the paint recovery act – making California the second state in the nation to adopt this type of stewardship legislation.

Modeled after Oregon’s paint recycling bill, this measure requires paint manufacturers to develop and implement a program to collect, transport and process post-consumer paint to reduce the costs and environmental impacts of its’ disposal.  The program is called Paintcare. It is a nonprofit established through a bill endorsed by the American Coating Association (ACA), the California Department of Environmental Quality (DEQ) and Metro regional governments. The new bill will help recover a significant amount of unused paint for proper disposal.  Post-consumer paint is the largest component of local household hazardous waste (HHW) collection programs and is costly to manage. In California, post-consumer paint represents 35 percent of the HHW volume collected by local governments. In 2008, more than 26 million gallons of paint were collected in California, costing local governments more than $27 million.  Looking at the country as whole, the U.S. EPA estimates that about 10 percent of all paint purchased becomes leftover – around 64 million gallons annually. The cost for municipalities to manage leftover consumer paint averages $8 per gallon, making paint a half-billion-dollar-per-year management cost.   Paintcare is funded by sales of paint throughout the state, with fees ranging from 35 cents to $1.60 per gallon, depending on the size of the container purchased.  See (http://www.paintcare.org/california/index.php) for used paint drop off sites in your neighborhood.

Taxes, taxes and more taxes.  It shall be interesting to see how many more taxes Californians will tolerate before they scream from their homes, “I’m mad as hell and I’m not going to take it anymore.” Or maybe Californians will just end up like the boiled frog.

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J. David Rauch Bio

Dave Rauch is the Founder and President of ProTec Building Services (ProTec). He ensures that work quality is consistent.  Dave maintains a consistent presence within the company.  While managing the growth of ProTec, he strives to improve everything that ProTec does, especially exceeding client expectations.  At Mr. Rauch’s previous company he designed the original HOA manual and monthly building maintenance programs specific for each HOA. In 1996 Dave opened ProTec, which now provides maintenance programs to over 600 communities and other services to 2,000 communities.

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George Van Oosbree Bio

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Andy Henley Bio

With over 20 years’ experience in construction management and janitorial, Andy knows what it takes to repair and maintain your largest asset, your homes and common areas at your community. Not only will Andy provide unparalleled customer service for all ProTec’s work but he will ensure that all jobs and service exceed client expectations. Call Andy and request to meet at your community. He will walk your community, detailing what maintenance and repairs are needed to keep your property values increasing.

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Candy Allen Bio

ProTec’s controller, Candy Allen, has over two decades of experience in accounting and brings a wealth of knowledge and experience to the executive team.  Candy also has extensive HR, office management and organizational skills derived from her years of experience in the service industry.  What truly sets Candy apart from her peers is her energy and zeal to get the job/challenge done correctly and immediately.  She’ll explain that her success comes from devoting herself to creating a team environment in which the company can accurately track and maintain their various business and accounting systems.  Teamwork, honesty and hard work are all core elements of Candy’s work ethic.

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Laura Swirski Bio

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Fernando Urrea Bio

Fernando Urrea began his ProTec career in 2009. After a short leave he returned to ProTec in 2014 as the San Diego Maintenance Division Manager. He holds a General Contractors License; as well as, EPA Certified Lead Renovator. Fernando worked at Standard Pacific Homes and Pacific Bay Homes in the San Diego Divisions and has over 15 years’ experience in new home construction management. While working in Military Housing for 10 years he was able get hands on experience on all trades and management skills. His new home building and maintenance knowledge are unparalleled and is what makes Fernando a great asset.

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Mark Adams Bio

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Lee Sterling Bio

While attending Arizona State University pursuing a degree in engineering, Lee Sterling enlisted in the United States Army prior to Desert Storm. After completing his service he began working in the property service industry. Duly licensed as a Building (B1) and Roofing (C39) contractor, Lee rose through the ranks of the industry becoming the Division Manager and acting Chief Engineer for properties in San Diego, Irvine and Brea. His commitment to quality and superior service has earned him recommendations from his peers, clients and customers.

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Cesar Ibarra Bio

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Paul Mayeski Bio

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Chris McHenry Bio

Chris has over 25 years of construction experience in the residential and commercial industries. He has done everything hands on from operate heavy equipment, ro build and remodel custom homes, and commercial tenant improvements. He started working in his family’s business building custom homes during the summers in high school. He moved on as a Project Manager for an apartment maintenance construction company in Rancho Santa Margarita. He proceeded to get his contractor’s license and owned his own company for 7 years. Chris also holds the positions of superintendent on a high rise construction project and Project Manager with an industrial/commercial company.

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Sal Mendoza Bio

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Mirzet Velic Bio

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Timothy (Ty) Haisch Bio

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John T. (JT) Anderson Bio

John learned the value of hard work at his family business at the early age of 5, where he started out as a janitor.  He went on to learn additional trades and skills, where he eventually left the business world to attend college at The University of Hawaii and the University of Utah.  He received his degree in Political Science and Business.  After moving to San Diego in 2004 he founded Elite Services, which provided building services to Commercial and HOA clients.  In 2016, John saw an opportunity to join the ProTec team where he has put his many talents to work, expanding ProTec’s list of 172 services and engaging new clients.

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