Reasons for tax reform bill and ‘Chase’s Law’
On Monday, March 19th, we returned to the Gold Dome to begin our 34th legislative day of the 2012 session.
As the end of session draws near, we worked long hours this week to ensure the passage of several important pieces of legislation, including a measure aimed at providing needed tax relief to Georgians and reforming some antiquated provisions in our tax code.
Also known as the Georgia Jobs and Family Tax Reform Plan, HB 386 implements a variety of tax reform measures that were recommended by the Special Council on Tax Reform and Fairness for Georgians and is a net $260 million tax cut on families and businesses in Georgia over the next three years.
Consisting of 11 business leaders and economic experts, the council conducted an in-depth review of our current tax structure and submitted their recommendations just before we began last year’s legislative session.
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 into House Bill 386, which passed the House [last] week.
This reform will make our state friendlier to businesses in the hopes of creating more and better jobs in Georgia and helps families as they recover from the economic downturn by providing needed tax relief.
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 auto owners’ birthdays each year.
Instead of paying this annual tax or the sales tax people currently pay when they buy a car, people purchasing a new or used vehicle will pay a one-time title fee equal to 6.5 percent of the car’s value.
In addition to eliminating the “birthday tax,” HB 386 would also reduce the marriage penalty in the current Georgia income tax code.
By increasing the personal exemption for married couples by $2,000 on joint income tax returns, HB 386 will eliminate an imbalance in the tax system that inadvertently punishes married couples with a higher tax rate.
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 would also close a loophole in our tax code that currently provides out of state retailers a competitive advantage over in-state brick and mortar retailers that directly or indirectly employ more than 1,000,000 Georgians.
Currently, all retail sales to Georgians, be they online or in store, are required to taxed at the same level. 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 use tax, something many Georgians are not aware of even though it has been law since the 1950s.
HB 386 would end this disparate treatment that unfairly burdens in-state retailers by requiring out-of-state sellers that have a physical presence in Georgia to collect and remit the Georgia state sales tax, just like their in-state counterparts.
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.
Finally, HB 386 would reinstate the sales tax holidays on school supplies and energy efficient items for the next two years. These sales tax holidays would be nearly identical to tax holidays in previous years, which allowed Georgia shoppers to forgo paying sales tax on school supplies for a specified time in August and energy and water efficient products in October. This measure will help struggling families and keep Georgia businesses competitive with their counterparts in neighboring states.
These are but a few of the measures in the bill that will result in a positive impact on the businesses and citizens of Georgia.
Like with any tax package, there are some provisions in the bill that I like more than others, however, any opportunity we have to allow Georgians to keep more of their hard earned money rather than send it into the state treasury is a positive step forward.
I view this as a good first step and will continue to work diligently in the years ahead to reduce Georgians’ tax burden and reform our antiquated tax code.
The measure passed the House 155-9 with overwhelming bi-partisan support and passed the Senate unanimously. I look forward to Governor Deal signing this measure into law soon.
In addition to passing tax reform legislation, the General Assembly also acted on two other important measures [in the past two weeks]. I have previously reported on legislation I introduced earlier this session to provide support and resources to schools with diabetic students. This is an important bill and will provide these children with the kind of safe and healthy environment necessary to achieve to the best of their abilities.
Finally, and perhaps most immediately on the mind of many in our community in is legislation to address the sale of synthetic marijuana, sometimes referred to as “spice.”
The state House also passed Senate Bill 370 which is the annual update to our state’s controlled substances act. This measure includes a ban on the chemicals used to manufacture synthetic marijuana.
The General Assembly previously banned these products in 2010 but the manufacturers, which are primarily in China, modified the formula after than 2010 law to avoid the ban.
The GBI chemists believe they have effectively gotten to the root of these dangerous products with this measure and we will hopefully have these products off the shelves in a matter of a few short weeks.
The measure was amended in the state House to title the law “Chase’s Law” as a tribute to Chase Burnett, a fine young man in our community who was the tragic victim of these dangerous and insidious products.
As we approach our last legislative week of the 2012 session, I encourage you to contact me with any concerns you might have regarding our state and its agencies. I look forward to hearing from the citizens of this community. Thank you for allowing me to serve as your representative.
[Rep. Matt Ramsey (R-Peachtree City) was first elected to the District 72 post in December 2007. He is a law partner with Warner, Hooper, and Ramsey, P.C., in Peachtree City. His email is email@example.com.]