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Georgia Tax Reform Package Unveiled In House - By Joel Aaron

March 20, 2012

[img_assist|nid=26981|title=|desc=|link=none|align=left|width=150|height=130]The 2012 General Assembly has unveiled a new tax reform package, the Jobs And Family Prosperity Act, in the waning hours of the session. Proponents say the legislation will bring an influx of new jobs and economic competitiveness to Georgia while lowering the individual tax burden across the State. See the fiscal note here.

The new legislation, House Bill 386, addresses several issues affecting Georgia taxpayers:

.The Marriage Tax Penalty – Currently, married couples are penalized in our state tax code. The new bill includes a $2,000 marital exemption for each partner.


.Elimination of job killing energy tax – The legislation presents a shot in the arm for Georgia businesses that will put them in a position to reduce overhead and expand operations with new hiring by phasing out Georgia’s taxes on energy used in manufacturing. Georgia businesses currently incur a tax on business inputs for the energy they use in production. These taxes drive up the cost of products and services and hamper jobs expansion. Surrounding states do not tax energy inputs. The Act will phase out these taxes over a four year period for most businesses with the exception of businesses that operate in the energy industry itself.

.Simplification of Georgia’s Agribusiness tax code – The legislation simplifies the tax code on Georgia’s number one industry – Agribusiness – by streamlining a convoluted series of taxes on agricultural inputs that have not been reviewed since 1936. This will free up Georgia farmers from the expensive cost of burdensome state government regulation and empower them to focus on providing the goods and services that drive Georgia’s economy. It also makes agricultural inputs, like farm equipment, seed, and fertilizer, exempt from sales tax.

.Taxes Internet companies that sell over $50,000 per year – Currently, Georgia-based businesses pay state taxes on products they sell in the state but online vendors operating from other states are able take advantage of Georgia’s customer base without having to pay the tax for selling to Georgia residents. This means online businesses are taking business away from Georgia. The legislation presents “E-Fairness” as a solution that puts Georgia businesses on a more equal playing field with online, out-of-state competitors. However, E-Fairness effectively means that Georgians will be paying a previously uncollected tax for online purchases.

.Sales Tax Holiday – The sales tax holiday helps families purchasing school supplies and other items during a short, calendar period.

.Abolition of Ad Valorem “Birthday Tax” – The legislation replaces the annual ad valorem “birthday tax” on automobiles with a one-time title tag tax while exempting family member-to-family member sales.

.Raises the Temporary Senior Freeze – The legislation freezes tax cuts on generated income for seniors and holds it to $65,000 per person over 65.

Overall, the Jobs And Family Prosperity Act reduces the tax burden on individuals, families and businesses at a time when jobs and the economy are on the minds of every Georgia citizen.

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