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ASK THE EXPERTS

One-time fee replaces sales, ad valorem taxes

POSTED: April 25, 2012 4:00 a.m.

The most sweeping legislation passed during the recent 2012 Legislative Session was HB 386, which is a comprehensive reform of how taxes are collected in Georgia.

HB 386 eliminates both the sales tax and ad valorem tax on non-commercial (privately owned) vehicles and replaces them with a one-time title fee that is paid when the title is transferred from one owner to another. Currently owned non-commercial vehicles will continue under the old ad valorem tax system until they are sold.

The bill also phases out the taxes placed on energy used in manufacturing, which will align Georgia with surrounding states.

Georgia has lost manufacturing jobs over the past few years because energy taxes put us at a disadvantage when competing for jobs.

HB 386 levels the playing field between retailers by requiring online retailers to collect and remit sales tax, just as the brick and mortar retailers do now.

Without this change, the state is giving preference to online retailers who do not employ Georgia workers and do not support local Georgia communities.

Finally, the bill caps the retirement income exclusion for senior citizens at $65,000 for a single filer and $130,000 for joint filers. Nothing is reduced below what exists today.

On April 24, Sen. Steve Gooch and I were the guest speakers at the Dawson County Republican forum. We discussed the above mentioned comprehensive reform of how taxes are collected in Georgia, next year's budget, and a number of bills passed by both Houses and sent to the Governor for signature.

In the closing days of the FY 2013 Budget discussions, it became evident that differences between the House, Senate and Governor were not going to be resolved with the revenue estimate the Governor had given the Legislature back in January.

Based on the previous year's growth, the governor increased his revenue estimate by $117.5 million, and these additional funds were placed very deliberately into a long-term fiscal plan for encouraging and supporting economic growth for our state.

March's revenue collections continued the climb that began almost two years ago. The March 2012 increase over March 2011 was $55 million (about 5 percent).

The third quarter (January - March 2012) net revenues totaled $11.7 billion for an increase of $525 million (4.7 percent) compared to the same period last year.

We know that the economy is improving and Georgians are going back to work, because $34 million of that $55 million came from an increase in personal income tax.

This is an 8.8 percent increase over March 2011.

Sales and use tax accounted for another $15 million in growth.

The Criminal Justice Reform Act, HB 1176, is a comprehensive revision of Georgia's drug laws and is designed to ease the rising costs of our prison system.

Last year the budget for the Department of Corrections exceeded the $1 billion mark.

The bill focuses judgments for low-risk drug offenders towards rehabilitation rather than confinement and strengthens Georgia's probation and parole systems by increasing supervision and accountability.

The Act includes two other important changes.

First, it subdivides burglary in an effort to differentiate between breaking into someone's home versus a place of business. Both offenses remain felonies.

Second, the bill removes the statute of limitations provision for victims of certain sex crimes who were under the age of 16 at the time of the incident.

Many of us have had tax disputes with the Georgia Department of Revenue and nothing we could do led to a satisfactory resolution.

HB 100, the Georgia Tax Tribunal Act, provides a low-cost method for citizens to resolve tax disputes with the department. However, the tribunal does not limit a citizen's ability to file their matter with the Superior Court, and all decisions of the tribunal are subject to appeals to the Superior Court.

The comprehensive tax reform measures will probably generate lots of questions.

Rep. Amos Amerson can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533; phone (706) 864-6589; e-mail hamerson@windstream.net. Or contact Gerald Lewy at (706) 344-7788.

 

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