A key Senate committee backed a cut in the top state income tax rate Wednesday while also supporting legislation to force e-retailers to collect sales taxes for online purchases by Georgians.
The Georgia House earlier approved House Bill 329 by House Ways & Means Chairman Jay Powell, R-Camilla, which would have dropped the top tax rate from 6 percent to 5.4 percent. Everybody would have paid the same rate, but the bill created a low-income tax credit to make up for the elimination of lower rates paid by the poor.
Senators amended the bill to lower the top rate to 5.65 percent and increase the standard exemption by $300 per person.
Senate leaders said Powell’s bill would have meant a tax increase for some Georgians. Under the Senate version, they said, all Georgians would receive a tax cut. The savings to taxpayers, and cost to the state, would be about $200 million.
The committee tacked on House Bill 61 by Powell which would force online retailers with at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send "tax due" notices each year to customers who spend at least $500 on their site.
Copies of the notices would go to the state Department of Revenue so it would know who owes at least some of the taxes.
The combined bill will go to the full Senate for a vote next week.
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