Tax reform measure benefits Georgia economy and taxpayers
Last week was a most productive week in the House of Representatives as the 2012 legislative session approaches final adjournment, scheduled for Thursday, March 29. Legislation on two priority initiatives, tax reform and criminal justice reform, earned overwhelming votes of approval in the House.
Also known as the Georgia Jobs and Family Tax Reform Plan, HB 386 would implement a variety of tax reform measures that were recommended by the Special Council on Tax Reform and Fairness for Georgians. This reform will change the way Georgia collects revenue, making our state friendlier to businesses and helping families as they recover from the economic downturn.
Most significantly, this legislation phases out the collection of a state sales tax on the cost of energy used in the manufacturing process. Georgia is presently the only state in the Southeast collecting such a tax on manufacturers, putting us at a competitive disadvantage. HB 386 will help create and save manufacturing jobs in the future. The energy sales tax exemption is also extended to our No. 1 industry, agriculture, which will help many farmers and agribusinesses in our part of the state.
I am very pleased that 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.
HB 386 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 and a state and local sales tax, those purchasing a new or used vehicle between March 1 and Dec. 31, 2013, would only pay a one-time title fee of 6.5 percent of the car’s value. The fee would go to 6.75 percent in 2014 and 7 percent in 2015.
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 and $1,000 each on separate returns. The measure would also close a loophole that currently provides out-of-state retailers a competitive advantage in online sales. HB 386 requires out-of-state sellers to collect and pay the Georgia state sales tax if they have certain relationships with affiliates in Georgia, just like their in-state counterparts.
HB 386 received unanimous approval in the Senate, sending the bill to Gov. Nathan Deal for his expected signature.
To address the problems caused by Georgia’s prison population doubling over the past two decades, House members approved HB 1176, which implements recommendations of the Special Council on Criminal Justice Reform.
This proposal would concentrate prison space on violent and career criminals by enhancing penalties for some serious offenders and more effectively punishing low-level drug users and property offenders. It also creates tougher, more effective probation supervision; improves community-based sentencing options, such as accountability courts, that reduce recidivism; and holds agencies accountable for better results through data collection and performance measurement systems. This bill will NOT reduce the sentences for any serious violent felonies or decriminalize or legalize any controlled substance.
By redirecting some of the money we spend incarcerating low-risk, non-violent offenders with substance abuse problems toward more effective community-based options that cost less and produce better outcomes, we will make all of Georgia’s communities safer. Moreover, the measures included in this legislation will save taxpayers an estimated $264 million by averting projected growth in prison costs over the next five years.
HB 1176 now goes to the Senate for its consideration.
Meanwhile, House members approved legislation I introduced urging the U.S. Department of Labor to withdraw its proposed policies that would restrict young people from working on farms. HR 1561 states that “passing on the family farm to the next generation is vital to the continued survival of the agriculture industry.” Also, Gov. Deal signed into law HB 477, which I introduced to increase the licensing renewal period for insurance agents from one to two years.
In the final three days of the session, lawmakers will consider giving final approval to the fiscal year 2013 state budget. I am very pleased that Sen. Tim Golden was able to add $8.5 million in the Senate version of the budget for construction of the new Health Sciences Building at Valdosta State University on top of the $23.5 million we had allocated in the House version. The South Georgia delegation will work hard to ensure the total $32 million appropriation remains in the final budget.
Also, I am working to gain final approval of HB 872, the legislation I introduced to crack down further on metal theft in Georgia. Sen. Renee Unterman, the author of similar legislation in the Senate, and I are working closely to reconcile minor differences between our two versions to make sure that we accomplish our goal of increasing penalties for metal theft crimes and strengthening the regulations for secondary metal recycling without punishing law-abiding business owners in that field.