Owners of giant luxury boats in need of repair and Georgians who lease cars ended up getting tax breaks from the General Assembly on the final day of the 2017 session.
But in the end, most Georgians were left out of the tax-bill frenzy that enveloped the Legislature over the past three months.
Legislation to lower the top state income tax rate stalled on the final night. And lawmakers didn’t renew a sales-tax holiday for back-to-school shoppers.
On the other hand, they also didn’t back moves to raise taxes on many used-car buyers and force all e-retailers to collect sales taxes on what they sell.
Senators said the Georgia House sent them $588 million worth of tax-credit and tax-cut bills to consider this year. The volume was impressive, even for a chamber that traditionally loves tax breaks. The Senate whittled some down. Some made it through, some didn’t.
The car-tax bill was one of the hot topics of the session.
House Bill 340 aimed to address problems created by a 2012 law that changed how cars are taxed in Georgia.
That law started the phaseout of the annual property tax on cars, replacing it with a one-time fee when Georgians buy a new or used car.
Currently, new cars are taxed based on that formula, whereas used cars are usually taxed at the typically lower book value. The used-car lobby worked overtime to kill that provision, and in the end, it was successful.
The part that passed would lower the bill on the same tax to those who lease cars, cutting their tab by up to $74 million in 2019, a number that could grow to $106 million by 2022.
Car dealers said the higher taxes on leased cars instituted in the 2012 law damaged the car leasing business, and they hope the change will help fix the problem.
Meanwhile, lawmakers failed to reach a deal on House Bill 329, which would have lowered the top state income tax rate.
It also would have forced 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. Some e-retailers, such as Amazon, already charge and remit sales taxes.
Several other pieces of tax legislation won approval on the final day, including House Bill 125 to give the owners of giant yachts a tax break if they agree to get their boats retrofitted or repaired in Georgia. State Rep. Ron Stephens, R-Savannah, said it would spur the creation of a big-boat repair business in his part of the state.
Stephens said the owner of the Savannah Yachting Center — Colonial Group — is planning to invest $50 million to $60 million into the big-boat business and is promising to create hundreds of jobs.
Colonial Group operates a collection of shipping, oil and gas businesses, including Enmark gas and convenience stores. Forbes magazine last year ranked it the 146th-largest private company in the country, with $3 billion in revenue the previous year.
The company and its president, Robert Demere, have been active in state politics, donating more than $33,000 to the campaigns of lawmakers over the past two years, including $2,500 to House Speaker David Ralston, R-Blue Ridge, and $1,500 to Senate President Pro Tem David Shafer, R-Duluth.
Demere has donated $6,500 to the campaigns of Lt. Gov. Casey Cagle, the Senate’s president. His former chief of staff, Brad Alexander, was part of the team pushing the tax break.
State Sen. Lester Jackson, D-Savannah, was among those who pushed the legislation for his hometown.
“This is a jobs bill, this is an economic opportunity bill,” Jackson said.
But some lawmakers objected.
“We would all like to have special treatment by the Department of Revenue for businesses and industries,” said state Sen. Josh McKoon, R-Columbus. “The problem is we send a message that if you come to the General Assembly and say you are going to create X number of jobs, you can negotiate special benefits under tax laws.”
Lawmakers also approved a rural Georgia investment measure that would provide $60 million in tax credits for investing in rural Georgia. Supporters say rural Georgia companies need access to capital; critics say it’s a giveaway to a few giant national capital companies. A similar proposal was vetoed by Gov. Nathan Deal in 2015 after it passed the General Assembly.
And legislators backed House Bill 155, the Georgia Musical Investment Act, which would provide tax breaks aimed at increasing live production, recording and music scoring in the state, and create more jobs in the music industry. It was patterned after the state’s highly touted tax-credit program for the film industry.
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