The tax overhaul bill rocketing through the Georgia Legislature has generated some complaints, some kudos, and many more questions about the haste behind its passage.
"This is happening so quickly that there’s not really time to look at it and say what is the impact going to be?" said Amy Henderson, of the Georgia Municipal Association. "Is it going to be good, or bad? Or in the long run is it going to be a wash? There hasn't been time to consider."
Among its many provisions, the bill eliminates the annual ad valorem tax on automobiles, the so-called "birthday tax." It would be replaced by a one-time title tax, which could affect the revenue stream for local governments. But local representatives can't be sure.
"The bill is based on the accuracy of their numbers, but we don’t know if their numbers are accurate or not," said Clint Mueller a lobbyist with the Association County Commissioners of Georgia. "We hope most local governments will be held harmless in this, but there's no guarantee there."
Local governments would also lose money on an energy sales tax moratorium for industry. To replace that revenue the state has promised to return a share of its take each year, guaranteeing at least $1 billion to local governments.
That guarantee is "some solace," said Angela Palm, of the Georgia School Boards Association. "But it's disconcerting that they're trying to move through this so fast."
The bill moved quickly through the State House Tuesday, passing 155 to 9. It should be presented to the Senate by Thursday.
The pace was deliberate -- legislators learned last year that introducing a tax overhaul measure earlier in the session is an invitation for opponents to pick it apart. This year's bill was unveiled with only days to go before the final gavel falls.
The grab-bag of tax cuts and tax increases would tweak the state's economy in ways that are difficult to predict. A new sales tax on internet commerce would generate an estimated $47.7 million in new revenue, while higher income tax exemptions for married couples would lower state revenue by $362.6 million, according to the Fiscal Research Center at Georgia State University.
Predictably, internet vendors aren't wild about it. "It would make us less competitive," said John Drummond, owner of the Marietta-based Banjo.com, which sells several thousand banjos a year.
But some internet shoppers said a tax won't change their purchasing habits.
Megan Lobe, an avid Amazon.com shopper who lives in Smyrna, said she's made seven purchases via Amazon in the past month, for a total of $120.77. Her sales tax would have totaled only a few dollars, she said, not enough to deter her from the convenience of shopping online.
“Not paying sales tax for online purchases has been a nice perk, but I can honestly say that is never a consideration in my purchasing decisions,” said Lobe.
Sucharita Mulpuru, vice president and principal analyst of e-business retail at Forrester Research, said changing the tax code isn’t likely to bring a large pay-off to the state.
“My perspective is that in a time of tight budgets it’s seen as an easy win, but the reality is that imposing online sales tax mandates won’t be a massive windfall to any state and is yet another tax that consumers are obligated to face,” Mulpuru said via email.
A sales tax exemption for Georgia's burgeoning movie industry that was created in 2002 would also disappear under the new code. The change means Georgia filmmakers (and those from out of state shooting here) will pay sales tax on film stock (or digital drives) and other film gear purchased or rented here.
"It's not a deal-breaker," said Craig Miller, whose company Craig Miller Productions does commercial and corporate work.
Dorsey Farr, an economist with French Wolf & Farr in Buckhead, took issue with the speed at which the tax reform bill is being passed through the legislature, not to mention that it incorporates a seemingly random smorgasbord of changes.
“It’s representative of the problems with the way we collect revenue at all levels of government," he said, describing it as "riddled with breaks for this or that behavior, or this or that industry.”
What we should be trying to do is raise the money we need to run the government as efficiently as possible," he said. "But that isn’t what we’re getting, especially when you make this decision at the stroke of midnight before the legislature ends.”
Henderson, of the municipal association, said that although she, too, is disenchanted with the way the measure was handled, she saw no point in calling for a delay. "I wouldn't waste my breath," she said.
-- Staff writer Katie Leslie contributed to this report.
About the Author
