ATLANTA (Friday, March 23, 2012) –The Georgia Senate has unanimously passed HB 386, a major piece of tax reform legislation. The bill 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 measure 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.
“We have followed a steady process of cutting spending and lowering taxes. Today marks another significant legislative achievement as we eliminate the dreaded automobile birthday tax, cut the tax on married families, and make Georgia more competitive for job growth by eliminating a tax on energy for manufacturers and farmers,” said Majority Leader Chip Rogers (R-Woodstock). “Georgians can be proud that their legislature has been active in creating a pro-job, pro-family environment. The Georgia economy is growing again and jobs are increasing. We want to make Georgia the single best state in America to open a business and raise a family.”
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 tax payers and employers.
“Georgians of every party, place and persuasion have demanded that we create a dynamic environment for job growth in Georgia,” said Senator Don Balfour (R-Snellville). “Job creation is paramount to our competitiveness with our neighbors and in a global economy. This bill focuses on creating a competitive business environment that will allow us to be successful in creating jobs, securing jobs, and encouraging economic growth.”
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.
“This is the culmination of years of hard work and dedication to reforming Georgia’s antiquated tax code,” said President Pro Tempore Tommie Williams (R-Lyons). “I am excited by our final product, which lessens the burden on hard working Georgians and gives our business community a competitive advantage to excel in the global economy and attract more jobs to Georgia.”
Sen. Bill Heath (R-Bremen), Co-Chairman of the Special Committee on Tax Reform added:
“I am proud of the work of our committee and the General Assembly have accomplished during the past 2 years. With the proper foundation laid, Georgia is now poised to remain one of the most competitive pro-business environments in the nation.”
RELEASE
For Immediate Release:
March 23, 2012
Contact:
Natalie Dale, Director
natalie.dale@senate.ga.gov
404.656.0028