An ongoing shadow effect of the pandemic on spending is revealed in a fourth-quarter state tax report.
Household goods repair and maintenance topped the nationwide list of business categories offering goods and services with the strongest sales and use tax growth in the fourth quarter of last year, the California Department of Taxes and Fees Administration reported Jan. 26.
A use tax is levied on goods that are not subject to sales tax, including goods purchased from California retailers. They may also include purchases shipped to California consumers from another state.
Of the total $20.1 billion raised in the period ended Dec. 31, the industry that keeps your oven going and microwave cooking brought in $242.7 million, which corresponds to an increase of more than 18% compared to the previous year.
January 2022 saw the highest increase in sales and use taxes collected, up 44% compared to the first month of 2021.
All business categories brought in over 6% more sales and use tax in the fourth quarter than a year earlier.
But for an industry that often operates under the radar but is expected to overreact in the shortest possible time, the amount it brings in comes as no surprise to its business owners.
This is especially true now, according to Eric Summers, owner of Affordable Appliance Repair in Santa Rosa.
Since the pandemic began in March 2020, sending droves of employees home to work in pajamas and whatever, Summers has seen a surge in service requests.
“I think that played a role. We’ve seen an increase,” he said.
In recent years, Summers has averaged seven to eight field visits on a typical work day. That’s an increase of about 5% compared to pre-pandemic years, he estimated.
And when disgruntled homeowners call because their appliances have stopped working, they mean business.
“If the fridge breaks or the washing machine breaks, they need that right away,” he told Business Journal.
Once at home, his industry expertise requires a bit of engineering and a lot of psychology. Dealing with the public can be a challenge, especially when afflicted with a broken device. He was physically attacked at work by a woman who looked like she had just rolled out of bed and threatened him with bad reviews for something he was wrongly accused of, he said.
In theory, Summers agreed that if more people in the home use the devices more often, they’ll only have a certain number of hours of use before they need any sort of attention.
And there is no “if”, there is only a “when”, it will be fixed either by him or his two workers. It also helps when two employees answer the phone on a day when many companies don’t. Plus, it doesn’t hurt that “affordable” is in the name, although money isn’t an issue in having a smoothly functioning home, he said.
“They will put all the money into it to fix it,” he said. “This business was recession-proof.”
Susan Wood covers law, cannabis, manufacturing, technology, energy, transportation, agriculture, and banking and finance. Susan has worked for various publications including the North County Times, the Tahoe Daily Tribune and the Lake Tahoe News for 27 years. Reach Wood at 530-545-8662 or susan.wood@busjrnl.com
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