Heath: Tax Package ‘Significant Progress’ for State

Last week, Gov. Nathan Deal signed HB 386 into law, a move supporters say marks a positive step in tax reform for Georgians. State Sen. Bill Heath, R-Bremen, chairman of the Senate Finance Committee and co-chairman of the Special Joint Committee on Georgia Revenue Structure, applauded Deal’s action in signing the tax reform package.

In a news release last week, Heath said HB 386 will promote pro-jobs, pro-family tax reform with measures that cut taxes for Georgia citizens, recognize the value of marriage and increase the competitiveness of Georgia businesses.

“I was honored to stand by as Governor Deal signed this innovative tax reform package into law," Heath said. "This will provide much-needed tax relief to Georgia families and open the door for businesses to call Georgia home. By adopting this reform, we are modernizing our outdated tax code and making significant progress toward reviving Georgia’s long-term economic growth and recovery. The result is a product of the dedication of many who worked diligently to craft a tax package that will provide Georgia with a pro-business reputation and provide our families millions in tax savings.”

One feature of the bill is the elimination of the birthday ad valorem tax and sales tax on motor vehicles. When a Georgia resident titles a car in the state after March 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 initially be 6.5 percent on March 1, 2013, and will go up to 6.75 percent on Jan. 1, 2014, and then 7 percent on Jan. 1, 2015, which is less than or equal to the sales tax in most counties.

The bill also provides a three-year sales tax holiday for school supplies as well as energy- and water-efficient products. This cuts sales tax by an estimated $35 million every year for three years for Georgia consumers, with Heath adding that the move reaffirms the legislature’s commitment to Georgia’s families and education. An additional component of the bill is the reduction of the marriage penalty in the income tax code.

Other components of the bill include an “E-Fairness” measure, which creates equity and fairness among retailers with a business presence in Georgia and levels the 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 competitive advantage out-of-state retailers have over Georgia taxpayers and employers.

Heath says 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. The Special Tax Reform Council was comprised of economic and business experts who devoted 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 toward a fairer and more economically attractive tax structure for private citizens and businesses alike.