You Can STILL Have Input on Tax Reform

Radio Commentary, 90.7, 91.7 New Life FM, May 27, 2011
By Sue Ella Deadwyler

Good morning, Jim. Don’t breathe a sigh of relief, yet. The legislature did NOT pass that huge tax increase, but it’s still in the works. Some say H.B. 388 is tax neutral, but it’s not. It DOES reduce the state income tax rate to 4.6 percent in 2012 and drops it to 4.55 percent for 2013. But, while cutting the income tax rate, it eliminates personal tax exemptions on everything except dependents. Then, it creates a NEW SERVICE TAX on every installation, maintenance or repair on motor vehicles. Right now sales tax is charged on parts, but if this passes, a service tax will be added to everything you have done to it. If you sell your used car, boat or airplane, you’ll have to collect a sales tax on it, unless you sell it to an immediate family member.

H.B. 388 also creates another unlimited revenue source in the new Georgia Communications Services Tax Act. It will tax any electronic transmission of voice, data, audio, video, or signal to, between or among destination points. Specific electronic services are not listed, so upcoming inventions can be taxed without further legislation. However, it DOES specify that telecommunications services voluntarily used by consumers will be taxed seven percent, with these exceptions: the Internet, which they cannot tax at this time, and prepaid calling or prepaid wireless calling services, such as Tracfone cards that are sold and taxed at the retail level.

Legislators were so aware of very strong opposition to higher taxes that they introduced four identical Revenue and Taxation bills on February 28th, so they could abandon each bill as it was rejected and proceed with the next number. H.B. 388 is the final version, but failure to pass this session does not mean it’s dead. It could be brought up during the special reapportionment session scheduled for August and, if it’s not handled then, it will be alive for the 2012 session.

Copies of H.B. 388 are available online or by mail through the House Clerk’s Office or the Office of the Secretary of the Senate. To comment on the bill, call Senator Heath at 404 656-3943 or Representative Channell at 404 656-5103. They are co-chairmen of the Special Joint Committee on Georgia Revenue Structure and there’s still time to influence their decisions on tax reform. For Georgia Insight I’m Sue Ella Deadwyler, your Capitol correspondent.