Senate notes: Revenue Committee making progress . . . slowly
[Last month] the Special Joint Committee on Revenue Structure met to discuss potential changes to Georgia’s tax laws in response to the report published earlier this year by the Special Council on Tax Reform.
Currently, there are four House bills, HB 385-388, that contain various aspects of the council’s recommendation. These four bills have been the source of widespread confusion and consternation in recent weeks.
The fact of the matter is that these bills and the recommendations in them were required to be introduced by the resolution establishing the council, and may not necessarily reflect the preferences and priorities of the legislature.
Two of the goals discussed at Thursday’s meeting were broadening the sales tax base and reducing the income tax burden.
In response to feedback from taxpayers, the committee expressed a desire to avoid taxing groceries, prescription medicines, veterinary care, hair care, AAA and other memberships, and Girl Scout cookies.
The main feature of the proposal, though, is a reduction in the state personal income tax from the current 6 percent to 4.5 percent or lower. The Senior Income Tax exemption of $35,000 ($70,000 for married couples) will remain intact; as will deductions for college savings plan contributions and Social Security. However, increases voted in last year might not be included.
The proposal offered by the committee also seeks to boost Georgia’s manufacturing sector by eliminating the sales tax on energy used in the manufacturing process. Currently, there are only 14 U.S. states that tax this use of energy, and only one other in the Southeast (North Carolina). The goal in eliminating this sales tax is to encourage recruitment of more manufacturing facilities by making Georgia more competitive with surrounding states.
In keeping with the revenue neutral goal of the tax proposal, the committee is contemplating a number of consumption-based taxes to make up for revenue lost by reducing the income tax.
Among these are taxes on casual (person to person, except for immediate family) sales of automobiles, boats, and planes, sales tax on auto repair service, and standardization of communications services taxes across all mediums (cable, and satellite).
The council recommendation on the communication services industry is to make the tax burden on luxury services consistent in each individual segment.
The proposal also removes a telecom tax on capital investment — a measure designed to encourage the construction of communications infrastructure and encourage the promulgation of wireless and broadband services to rural areas.
The legislation is still a work in progress, and will likely continue to evolve over the next few weeks with input from voters and legislators. However, portions of the proposal are not likely to change.
Moving toward a flatter tax and lowering Georgia’s personal income tax, the highlight of the proposal, will help ease the financial burden on our citizens during this recession and make the state more attractive to new businesses.
If you would like additional information regarding a specific piece of legislation, you may access the Georgia General Assembly website at http://www.legis.ga.gov/
Thank you for your interest. Please contact me if I may be of assistance at:
109 State Capitol
Atlanta, Georgia 30334
(404) 651-5795 (fax)
[Sen. Ronnie Chance (R-Tyrone) represents Senate District 16, which includes parts of Fayette, Monroe and Spalding counties and all of Lamar and Pike counties.]