As the end of the 2012 Georgia General Assembly Legislative Session draws near, we have worked long hours this week to ensure the passage of vital legislation that will reform both our state’s tax code and criminal justice system.

Some of the legislative highlights of this week were:

HB 386, also known as the Georgia Jobs and Family Tax Reform Plan, HB 386 implements a variety of tax reform measures that were recommended by the Special Council on Tax Reform and Fairness for Georgians. In the 15 months since then, we have had time to thoroughly review the findings of the council and develop what is called the Georgia Jobs and Family Tax Reform Plan into House Bill 386, which passed the House this week.  This reform will change the way Georgia collects revenue, making our state friendlier to businesses and helping families as they recover from the economic downturn.

Among its many family-friendly tax reform components, HB 386 includes a measure that would eliminate the “birthday tax,” an annual vehicle property tax on cars, trucks and vans that is due on auto owners’ birthdays each year.  Instead of paying this annual tax and a state and local sales tax, people purchasing a new or used vehicle after March 1, 2013 would only pay a one-time title fee equal to 6.5 percent of the car’s value.  Although this change is not applicable to those currently paying the annual “birthday tax,” those who purchase a vehicle between now and February 2013 would have the option of choosing between the current system and the one-time title fee system.  All vehicles purchased after March 1, 2013 would use the new title fee system.

In addition to eliminating the “birthday tax,” HB 386 would also reduce the marriage penalty in the current Georgia income tax code.  By increasing the personal exemption for married couples by $2,000 on joint income tax returns and $1,000 each on separate return, HB 386 will eliminate an imbalance in the tax system that inadvertently punishes married couples with a higher tax rate. Under this change, couples filing with a “Married Filing Joint” status will go from an exemption of $5,400 to an exemption of $7,400, and married couples that file separately will have an increase in each of their exemptions from $2,700 to $3,700.

HB 386 would also close a loophole in our tax code that currently provides out of state retailers a competitive advantage over in-state brick and mortar retailers that directly or indirectly employ more than 1,000,000 Georgians.  Currently, all retail sales to Georgians, be they online or in store, are required to result in the collection and remittance of either a state sales or use tax.  While brick and mortar retailers within the state must collect a sales tax at the time of the sale, their out-of-state counterparts do not.  Instead, this burden is placed on their Georgia customers, who are required to remit the sales tax in the form of use tax, something many Georgians are not aware of even though it has been law since the 1950′s.  HB 386 would end this disparate treatment that unfairly burdens in-state retailers by requiring out-of-state sellers to collect and pay the Georgia state sales tax if they have certain relationships with affiliates in Georgia, just like their in-state counterparts.  Not only will this end an unfair tax policy that puts small businesses in Georgia at a disadvantage, but it will also stop incentivizing out-of-state retailers to keep their facilities and jobs out of Georgia.

Finally, HB 386 would reinstate the sales tax holidays on school supplies and energy efficient items for the next two years.  These sales tax holidays would be nearly identical to tax holidays in previous years, which allowed Georgia shoppers to forgo paying sales tax on school supplies for a specified time in August and energy and water efficient products in October.  This measure will help struggling families and keep Georgia businesses competitive with their counterparts in neighboring states.

While these measures will make a positive impact on the lives of Georgians across the state, they are not the only tax reform measures implemented in HB 386.  Other policies – such as eliminating energy sales tax on manufacturers, allowing certain projects of regional significance to exempt construction materials from the state sales tax and lowering the state tax on aviation fuel – will make Georgia a more attractive environment for businesses, which ultimately provides more jobs for Georgians.

The legislation also revises Georgia’s patchwork of agricultural tax exemptions into three broad input exemptions that would ensure fairness and consistency within Georgia’s number one industry.   Additionally, it would eliminate the sales tax exemption on goods used for film production, cap the retirement income exclusion for seniors, and limit a tax credit for land conservation easements.  Together, these tax reforms create a comprehensive shift in Georgia’s tax policy, which will create a modern tax code that benefits families and levels the playing field for businesses that create jobs for Georgians.  I am pleased that my colleagues showed overwhelming support for this measure, and hope that Governor Deal will approve these measures soon.

The also House Passed HR 1367 Urging Congress to Prohibit EPA From Regulating without Researching which can greatly affect agriculture in Georgia. This resolution calls for Congress to prohibit the EPA from regulating greenhouse gas emissions without first studying the environmental and economic impact of the regulations. The resolution also cites energy production by fossil fuels and manufacturing, noting the great impact regulations will have on competitiveness and jobs.