House Approves Major Revisions to Tax Code, Criminal Justice System

By Pat Gardner

The Georgia House of Representatives voted Tuesday to approve a wide-ranging package of changes to the state's tax code.

Included in HB 386, which emerged from the Special Joint Committee on Georgia Revenue Structure, are the following revisions:

• Elimination of the sales tax and ad valorem taxes paid by the owners of motor vehicles, who instead will pay a one-time title fee when they purchase a car. The fee would be 6.5 percent of the vehicle's fair market value in 2013, 6.75 percent in 2014 and 7 percent in 2015 and beyond.
• Collection of a state sales tax on products sold online by companies with a physical presence, including warehouses, in Georgia.
• Elimination of the sales tax on energy used for manufacturing, agriculture and mining purposes over a four-year phase-out period. Local governments would be allowed to keep their 3 percent portion of that sales tax by re-adopting it as an excise tax.
• An increase in the income tax exemption for married couples from $5,400 to $7,400 to eliminate the "marriage penalty."
• A cap on the exemption on unearned income for retirees at the current level of $65,000.
• More limitations on the conservation easement that lowers taxes for some property owners.
• A 30 percent tax credit but elimination of a sales tax exemption for film productions in Georgia.
• A sales tax exemption for new business projects with a "regionally significant impact." The state's commissioner of economic development will decide which projects get the tax break.
• Reinstatement of the sales tax holiday periods for the purchase of back-to-school materials (Aug. 10-11 this year) and energy-efficient appliances (Oct. 5-7).
• Continuation of the sales tax exemption on jet fuel purchases, which primarily benefits Delta Air Lines, for at least two more years.

HB 386 was unanimously approved by the Senate on Thursday, sending the measure to Gov. Nathan Deal for his signature.  

Click here for an analysis of the legislation by the Georgia Budget & Policy Institute. 

Criminal Justice Reform: Also this week, House members approved HB 1176, a bipartisan proposal that seeks to find a balance between ensuring public safety and reducing Georgia's prison system costs, which have risen dramatically as the inmate population has more than doubled in the past 20 years.

The state now spends more than $1 billion a year to incarcerate more than 56,000 inmates.

Included in the measure are provisions that would give judges more sentencing discretion for nonviolent offenses; raise the threshold for suspects charged with certain felonies; revise sentencing guidelines for burglary, shoplifting, forgery, marijuana possession and other offenses; provide probation and parole agencies with more resources to supervise offenders in the community; and expand the use of drug and mental health courts, which offer alternative sentencing for certain offenders, and add more community-based treatment centers for low-level offenders.

HB 1176 now goes to the Senate for its consideration.

Rep. Pat Gardner represents the 57th district of Georgia.

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