The Georgia House gave final passage Thursday to legislation aimed at making sure Georgians who buy goods from online retailers pay sales taxes on what they purchase.
And in the final hour of the 2018 session, lawmakers backed a bill that House and Senate leaders say could lead to a dramatic expansion of mass transit in metro Atlanta.
House Bill 930 would allow 13 metro Atlanta counties to impose new sales taxes for transit expansion if their voters approve them. Such referendums could pump hundreds of millions of dollars into new transit lines across the region.
Earlier Thursday, the House gave final passage to House Bill 61, which would require online retailers who make 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 sites.
Its passage could mean an extra $500 million to $600 million a year in sales tax collections for the state and local governments, according to state estimates. It would take effect on sales starting Jan. 1.
The bill’s sponsor, House Ways and Means Chairman Jay Powell, R-Camilla, said the taxes are already owed, but many online retailers haven’t collected them. Mega-retailer Amazon is among the exceptions, agreeing to start collecting Georgia taxes several years ago.
States across the country have been tackling the issue in recent years. But they have run up against a ruling the U.S. Supreme Court made more than 25 years ago saying governments can’t force retailers to collect and remit taxes unless they have a physical presence, such as a store, in a state.
The original ruling came before the internet sales boom. Now it is a major part of the retail landscape. Forecasters have predicted U.S. online retail sales could top $1 trillion a year in the next decade.
Senate Finance Chairman Chuck Hufstetler, R-Rome, said, “I think the internet is healthy and it doesn’t need any help.”
The Supreme Court has agreed to reconsider the issue using a law passed by South Dakota’s Legislature for the purpose of testing its legality.
Powell said the state needs to have its law in place to begin collecting money if the Supreme Court rules in favor of internet sales taxes.
NetChoice, a trade group that represents the Chinese internet retail mammoth Alibaba, Overstock.com, eBay, PayPal and others, has asserted that such changes have the potential to hurt small businesses and that Georgia’s proposal raises privacy concerns.
But many business groups say the measure would help local stores that currently collect sales taxes on their goods and must compete against internet retailers who don’t.
As part of the transit agreement, local sales taxes could generate big money for transit projects. The state would add $100 million in bonds for transit expansion under the budget for fiscal 2019, which begins July 1.
Taken together, the initiatives could spark the biggest transit expansion in metro Atlanta since MARTA finished its existing passenger rail system in 2000.
State Sen. Brandon Beach, R-Alpharetta, who helped negotiate the final bill, compared it to the General Assembly’s 2015 decision to raise nearly $1 billion a year for road construction.
“I really believe this will be transformational,” Beach said.
“This is a major, major achievement,” added state Rep. Calvin Smyre, D-Columbus, another negotiator.
The bill would create a regional board to oversee transit funding and construction. The board would have the final say over the project lists that counties submit to voters. The idea is to coordinate transit projects across county lines.
It would allow Gwinnett County to hold a vote on joining MARTA this year.
And it would authorize a special transit district in Cobb County. The district could ask voters to approve a transit expansion — one that could be paid for with any county revenue sources.
The district’s boundaries would be drawn by a committee consisting of county commissioners and state lawmakers representing the county. The committee must finish its work in 2019 — under the bill, it would be disbanded on Dec. 1 of that year.
The final version of the bill removed two potential sources of revenue: an airport concessions tax and a 50-cent fee on all rides for hire such as taxis, limousines and ride-sharing services.
But the $100 million in bonds would be a major boost in state funding. Currently, Georgia spends about $14.5 million a year on transit — 27th among the states.
The House and Senate also approved a proposal to crack down on distracted driving.
House Bill 673 would prohibit motorists from handling their cellphones or other electronic devices while driving. Motorists could still use their phones, as long as they use hands-free technology.