What you need to know about the self-service laundry tax

January 7, 2016 | Investment

Taxing self-service laundromats is a hot button issue in the industry. Only three states now include a sales tax on coin-operated self service laundry machines. Most laundromat owners and regular laundry customers in the U.S. don’t even think about laundry taxes—as in most states laundry or use taxes are not applied—yet Hawaii, New Mexico, and West Virginia each have laws associated with the collection of taxes on coin laundries within their state lines.

This state-by-state issue in these three states has ignited a legal firestorm; the coin laundry industry has begun to lobby for the right of all laundromats to remain tax free, while the other 47 states wait to see what unfolds in this controversial debate over the taxing of laundromats.

For over 30 years, those in the coin laundry industry have fought for the exemption of the self-service coin laundry industry from taxation. Large organizations like the Coin Laundry Association (CLA) have been adamant about mediating on the behalf of individual laundry owners to legislators on why laundromats should stay exempt.

Here are the main three reasons why the laundromat industry is fighting against taxation:


1. It would hurt the majority of laundry customers

The CLA has found that the median household income for a regular self-service laundromat customer is $23,000 annually. They claim that taxes on these low-income customers—who may include apartment renters, senior citizens, and students who cannot otherwise afford a washer and dryer of their own—simply cannot handle an increase in taxes — which would naturally raise the prices of laundry services.


2. Collection is next to impossible

New states are also deciding whether or not to implement a laundry sales tax as well. Iowa legislators have proposed a sales tax that would effectively turn a $2.00 wash into a $2.11 wash. This presents a huge problem for coin-only laundromats, as coin machines can only be increased by multiples of 25 cents. That makes the collection of this tax become nearly impossible without raising prices to over double the amount of the proposed sales tax.


3. Clean laundry is a basic public health service

Clean laundry is a basic public health need and because of this, it should remain tax exempt. Laundromats provide a basic public health service to communities and should not be viewed as a luxury service. Because of this basic need requirement and the promotion of a healthier community, the laundry industry should remain exempt from taxation.

Self-Service Laundry should not be taxed because it would hurt laundry customers, it would be nearly impossible to collect and the industry provides a basic public health service to the community. The laundry industry provides equipment, which have already been taxed, to their customers who perform their own labor.