Lawmakers once again proved this week that having a lot of money doesn’t necessarily mean you shouldn’t get a tax break on what you buy.
Within a few hours Thursday the Georgia House approved a tax break for owners of some pricey boats, and the chamber's tax committee backed another break that would help Delta Air Lines, which recorded a $4.4 billion profit last year.
The two tax breaks come at a time when legislators are moving to assure that the state can collect taxes from people who buy goods online, have ignored legislation to raise the state minimum wage and are considering a bill that could raise taxes when you buy a used car.
Lawmakers typically pass a dozen or so special-interest breaks every year, sometimes cutting big money from the tax bills of chosen businesses or industries, usually with the promise of creating more jobs or “leveling the playing field.” Many such bills are currently working their way through the House Ways and Means Committee or awaiting action by the full chamber. Meetings of the tax-writing committee are packed with lobbyists either hoping to get a tax break or wanting to make sure changes aren’t made in tax law that hurt their clients.
“If you’re politically connected, the General Assembly is apt to help you out,” said Alan Essig, a former Georgia budget analyst who is now a public policy consultant. “The priorities seem to be off kilter.”
On Thursday, the House voted 152-14 for House Bill 125, which would give some owners of big boats and yachts a tax break if they get their vessels repaired or retrofitted in Georgia.
The measure was sponsored by Savannah Republican state Rep. Ron Stephens — a tax-break champion — and is aimed at attracting businesses that maintain and repair big boats.
"Currently we don't have a large-boat repair industry in Georgia," House Ways and Means Chairman Jay Powell, R-Camilla, told colleagues before the vote.
Under the legislation, a boat owner would have to spend more than $500,000 on a retrofit, repair or maintenance job before getting any sales tax breaks on parts, engines or equipment.
The only lawmaker who raised a question about the bill was state Rep. Michele Henson, D-Stone Mountain, who asked that its implementation be delayed a year. She noted that some state employees weren't getting pay raises this year at the same time lawmakers were considering the tax break for big boat owners.
Powell said the tax break in HB 125 is similar to one in Florida, with whom Georgia is often competing for business.
A few hours later, Powell's committee backed House Bill 145, known around the halls of the Capitol as "the Delta Bill."
Its sponsor, state Rep. John Carson, R-Marietta, told committee members it wasn't about helping Delta.
“This is really a jobs bill,” Carson said, “and it’s about equity with other states.”
Many states tax jet fuel at rates lower than the 4 percent Georgia charges, he said. Texas, for example, exempts jet fuel entirely from motor fuel taxes. That means, he said, that an airline company will have its planes fuel up in Dallas and then fly to Atlanta, instead of fueling up here.
Carson’s bill would exempt 45 percent of fuel loaded into a plane bound for an out-of-state destination. Carson said airplanes burn about 45 percent of their fuel on takeoff.
The bill, Carson told colleagues, “has a minimal fiscal impact.”
How minimal? asked state House Minority Leader Stacey Abrams, D-Atlanta.
Carson said it would cost the state — and mainly save Delta — $14.5 million to $30 million a year.
Lawmakers passed a tax break on jet fuel for Delta in 2005 when the company was in financial trouble. Legislators said it was never supposed to be permanent, but they kept renewing it and eventually made it permanent even when the company was racking up record profits.
They finally repealed it near the end of the 2015 session.
Essig said the money the state would be spending on the tax breaks could be better used filling needs in social service programs or giving tax cuts to low- and middle-income working Georgians.
State Sen. Vincent Fort, D-Atlanta, who has unsuccessfully pushed minimum-wage legislation for years, said the House tax bills are an example of how the General Assembly works.
“It shows the state Capitol is a place where special interests, rich people, look to legislators to help them out,” Fort said. “Legislators are looking out for rich people and corporate interests and not looking out for working, middle-class Georgians. It is proof positive this place is controlled by moneyed interests.”
Legislative session coverage
The Atlanta Journal-Constitution has the largest team covering the Georgia Legislature. To see more of its legislative coverage, go to http://www.myajc.com/georgia-legislature/. To track particular bills and resolutions, check out the Georgia Legislative Navigator at http://legislativenavigator.myajc.com/. You can also follow the proceedings on Twitter at http://twitter.com/GAPoliticsNews or on Facebook at http://facebook.com/gapoliticsnewsnow.
Subscribe to our newsletter for more news about Georgia politics. Subscribe to politics news alerts in the AJC news app.
About the Authors
