The California pool industry’s biggest legislative threat in the past couple of years — the imposition of a service tax — seems to have been fended off for now.

California is the latest in a string of states whose legislatures have tried to pass laws imposing sales taxes on services, including pool maintenance and repair.

Connecticut recently enacted a service tax, while Illinois and Michigan failed to garner enough support to get one on the books.

Often these proposals are in response to widening deficits, and while luxury products are the most common targets, other items sometimes get swept into the process.

Currently, California’s deficit is expected to approach $16 billion.

Service taxes became a red-flag issue for the state’s industry in 2009, when a study by California’s Commission on the 21st Century Economy proposed such levies. To make up funds lost by the weakening manufacturing economy and collect more fairly, the commission concluded, the state should begin taxing services. SPEC , the California pool and spa industry’s legislative advocate, warned the industry that it likely would be pursued at some point.

The issue took a step out of abstraction and into tangibility this year, when two bills were introduced proposing service taxes, one of which specifically named the pool industry.

Assembly Bill 2540 by Mike Gatto (D-Burbank) listed several services that would have been taxed at a rate of 4.75 percent. Pool maintenance was cited along with discretionary expenditures such as yacht repair, elective cosmetic surgery, palm reading and spa services for pets.

Assembly Bill 1963, introduced by Alyson Huber (D-El Dorado Hills), proposed a 4 percent tax on all services except medical, educational, auto repair, tax preparation, legal, and agricultural services.

For now, the California industry can breathe a sigh of relief. In one round of amendments to AB 2540, pool service was removed from the list of industries that would be taxed while AB 1963 has been amended to call for a study on the issue of service taxes.

Though the threat has been neutralized for this session, the door remains open for future legislation, especially with one bill calling for research on a potential service tax, said John Norwood, president/CEO of SPEC.

“It will keep coming up as California keeps changing from a manufacturing or other [economy] to a service economy,” he said.

But it likely will be an uphill battle. While some states have instituted service taxes, most have shown great resistance to such levies since the 1980s, when Florida passed a service-tax law only to see it quickly overturned after severe backlash.

“Generally speaking, it’s been very difficult to expand sales tax onto services,” said Arturo Perez, fiscal analyst for the National Conference of State Legislators in Denver.

No doubt, officials proposing these taxes are met with severe dissatisfaction. Those states that have succeeded managed to do so by rolling the taxes out slowly, adding a few services at a time to the list, said Mandy Rafool, NCLS’ program principal on the fiscal affairs program. As for which services get included, it often depends on how popular they are and how much lobbying power their corresponding industries have, she added.

In California, SPEC and its members fear that a service tax would result in lost business for some pool firms. Customers would be divided among those wealthy enough to remain relatively unaffected by a new fee vs. homeowners on tighter budgets, said SPEC Chairman Mike Geremia, also president of Geremia Pools in Sacramento, Calif. “You’re going to get all the people who are on that edge to not be able to maintain their service. That would have a big impact on the [pool] service industry,” he said.

Facing the loss of such business and having to choose between passing the tax on to resistant customers or absorbing it completely to avoid lost accounts could drive some companies to join the underground economy, Geremia and Norwood added.

Because of this, Norwood said, a service tax would actually prove counterproductive — an argument that helped dissuade legislators as he and SPEC members lobbied not only the bill’s authors, but all members of the committees hearing the legislation.

“The argument was [that] the state isn’t going to gain revenue because you’re going to have companies losing income, and [it’s] going to force a lot of us into the underground economy,” Norwood said. “So they’re not going to produce income off it and it’s going to hurt small businesses.”