ATLANTA (Thursday, April 19, 2012) – Today, Governor Nathan Deal signed HB 386 into law marking a positive step in tax reform for Georgians. This new law promotes pro-jobs, pro-family tax reform with measures that cut taxes for Georgia citizens, recognizes the value of marriage and increases the competitiveness of Georgia businesses.
Features of the reform package include a three-year sales tax holiday for school supplies and energy efficient products, significant reduction of the marriage penalty, elimination of the “birthday” tax and sales tax on motor vehicles, a tax exemption on energy used in manufacturing and construction materials, as well as an E-Fairness measure which will aid in the growth of local businesses.
“The new economy requires Georgia to make changes to be more attractive to businesses and to have them bring jobs to our citizens and this new law is a strong beginning”” said Majority Leader Chip Rogers (R-Woodstock). “Governor Deal today by signing HB 386 into law has tipped the first domino in Georgia reclaiming its momentum as the top pro-business, pro-family, pro-taxpayer state in the South. As Georgia’s Senate Majority Leader it is my promise to bring more legislation that reduces or eliminates the tax burdens on families and businesses in our state. ”
The bill will eliminate the “birthday tax” and sales tax on motor vehicles. When a Georgia citizen titles a car in Georgia after Jan. 1, 2013, they will pay a one-time title fee instead of sales taxes and the annual ad valorem tax due each birthday. The title fee rate will be 6.5 to 7 percent, which is less than or equal to the sales tax in most counties. The bill also includes a minimal fee for transfers between immediate family members and eliminates this local tax on the ownership of personal property.
The bill provides a three-year sales tax holiday for school supplies as well as energy and water efficient products. Historically, Georgia is known as one of the first states to establish the popular tax holiday. This cuts sales tax by an estimated $35 million every year for three years for Georgia consumers and reaffirms the legislature’s commitment to Georgia’s families and education. An additional pro-family component of the bill is reduction of the marriage penalty in the income tax code.
Pro-jobs components of the bill include an E-Fairness measure, which creates equity and fairness among retailers with a business presence in Georgia and levels playing field so that Georgia businesses may compete equally with out-of-state competitors. By enforcing the current sales and use tax law, the bill reduces the unfair competitive advantage out-of-state retailers have over Georgia taxpayers and employers.
Successful tax reform has been a goal of the General Assembly for decades. In the 2010 Legislative Session, the General Assembly passed HB 1405 which established the Tax Council to make recommendations and the Special Joint Committee to consider legislation. Special Tax Reform Council was comprised of economic and business experts who devoted significant time and resources to work on a proposal to make Georgia’s tax code friendlier and more attractive to employers. The Council’s objective was to present a tax proposal that would help create jobs and move Georgia towards a fairer and more economically attractive tax structure for private citizens and businesses alike.
For Immediate Release:
April 19, 2012
Natalie Dale, Director