Thursday, March 29, also known as Sine Die, is the 40th and final legislative day, our last opportunity to pass legislation this year. We have worked long hours to ensure the passage of vital legislation that will reform our state's tax code.
HB 386 implements a variety of tax reform measures that were recommended by the Special Council on Tax Reform and Fairness for Georgians. The council conducted an in-depth review of our current tax structure and submitted their recommendations in December 2010.
In the 15 months since then, we have had time to thoroughly review the findings of the Council and develop what is called the Georgia Jobs and Family Tax Reform Plan. The legislation for this plan is contained in HB 386, which passed the House this week.
The reform will change the way Georgia collects revenue, making our state friendlier to businesses and also helping families as they recover from the economic downturn.
Among its many family-friendly tax reform components, HB 386 includes a measure that would eliminate the "birthday tax," an annual vehicle property tax on cars, trucks and vans that is due on the owners' birthdays each year.
Instead of paying this annual ad valorem tax plus a state and local sales tax, people purchasing a new or used vehicle after March 1, 2013 will only pay a one time title fee equal to 6.5 percent of the car's value. Although this change is not applicable to those currently paying the annual "birthday tax," those who purchase a vehicle between now and Feb, 28, 2013, will have the option of choosing between the current system and the one-time title fee system.
In addition to eliminating the "birthday tax," HB 386 will reduce the marriage penalty in the current Georgia income tax code.
The personal exemption for married couples is increased by $2,000 on joint income tax returns and $1,000 each on separate returns.
Under this change, couples filing with a "Married Filing Joint" status will go from an exemption of $5,400 to an exemption of $7,400, and married couples that file separately will have an increase in each of their exemptions from $2,700 to $3,700.
HB 386 will close a loophole in our tax code that currently provides out of state retailers a competitive advantage over in-state brick and mortar retailers. While brick and mortar retailers within the state must collect a sales tax at the time of the sale, their out-of-state counterparts do not. Instead, this burden is placed on their Georgia customers, who are required to remit the sales tax in the form of a "use tax."
Many Georgians are not aware of the "use tax" even though it has been law since the 1950's.
This legislation will end the unfair treatment of in-state retailers by requiring out-of-state sellers to collect and pay the Georgia state sales tax if they have affiliates in Georgia.
Not only will this end an unfair tax policy that puts small businesses in Georgia at a disadvantage, but it will also stop incentivizing out-of-state retailers to keep their facilities and jobs out of Georgia.
The sales tax holidays on school supplies and energy efficient items will be reinstated for the next two years.
These sales tax holidays will be nearly identical to tax holidays in previous years, which allowed Georgia shoppers to forego paying sales tax on school supplies for a specified time in August and on energy and water efficient products in October. The measure will help struggling families and keep Georgia businesses competitive with their counterparts in neighboring states.
Other tax reform measures implemented in HB 386 will make Georgia a more attractive environment for businesses.
These include eliminating energy sales tax on manufacturers, allowing certain projects of regional significance to exempt construction materials from the state sales tax, and lowering the state tax on aviation fuel.
The legislation also revises Georgia's patchwork of agricultural tax exemptions into three broad input exemptions that will ensure fairness and consistency within Georgia's number one industry.
Additionally, it will eliminate the sales tax exemption on goods used for film production, cap the retirement income exclusion for seniors age 65 and older at $65,000, and limit the tax credit for land conservation easements.
Together, these tax reforms create a comprehensive shift in Georgia's tax policy, which will create a modern tax code that benefits families and levels the playing field for businesses that create jobs for Georgians.
Saturday, March 31, will be my last breakfast with constituents for the 2012 Legislative Session. We will meet at 8 a.m. at the Wagon Wheel Restaurant in Dahlonega. Come join us.
Rep. Amos Amerson can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533; phone (706) 864-6589; e-mail email@example.com. Or contact Gerald Lewy, my communications director, at (706) 344-7788. He'll know how to get your message to me. Remember, the secret of good government is a well-informed electorate.