08 LC 18
7197
House
Bill 1264
By:
Representatives Fludd of the
66th
and Mosby of the
90th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 48 and 36 of the Official Code of Georgia Annotated, relating
respectively to revenue and taxation and local government, so as to provide for
comprehensive tax reform; to provide for a short title; to provide for
additional requirements with respect to certain annual reports; to provide for
an ad valorem tax exemption for all tangible personal property constituting the
inventory of a business; to revise and change individual income tax rates and
tables; to provide for annual adjustments with respect to certain standard
deductions; to provide for an income tax credit with respect to ad valorem tax
expenses; to define a term; to provide for conditions and limitations; to change
the definition of a retail sale with respect to sales and use taxes to include
certain consumer services; to provide for an exemption from sales and use tax
with respect to the sale or use of natural or artificial gas, #2 fuel oil, #6
fuel oil, propane, and coal used directly or indirectly in the manufacture or
processing of tangible personal property primarily for resale and the fuel cost
recovery component of retail electric rates used directly or indirectly in the
manufacture or processing of tangible personal property primarily for resale; to
increase the amount of the excise tax on tobacco products with respect to
cigarettes; to provide for the elimination of 50 percent of ad valorem property
taxes on motor vehicles; to provide for motor vehicle tax relief grants; to
provide for definitions; to provide for procedures, conditions, and limitations;
to provide for powers, duties, and authority of the state revenue commissioner;
to provide for effective dates and applicability; to provide for related
matters; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
This
Act shall be known and may be cited as the "Better Economy Through Tax Equity
Reform (BETTER) Plan."
SECTION
2.
Title
48 of the Official Code of Georgia Annotated, relating to revenue and taxation,
is amended in Code Section 48-2-7, relating to duties and powers of the state
revenue commissioner, by revising paragraph (5) of subsection (a) as
follows:
"(5)
Submit to the Governor and to each regular session of the General Assembly an
annual report of the conduct of his or her office. The commissioner shall not be
required to distribute copies of the annual report to the members of the General
Assembly but shall notify the members of the availability of the annual report
in the manner which he or she deems to be most effective and efficient. As the
chief revenue official of the state, he or she shall advise the Governor and the
General Assembly on all matters relating to revenue.
Such report
shall include a cost-benefit analysis of all sales and use tax, property tax,
and income tax exemptions or credits granted under this
title."
SECTION
3.
Said
title is further amended by adding a new Code section to read as
follows:
"48-5-41.2.
All
tangible personal property constituting the inventory of a business shall be
exempt from all ad valorem taxation."
SECTION
4.
Said
title is further amended in Code Section 48-7-20, relating to individual income
tax rates and tax tables, by revising paragraph (1) of subsection (b) as
follows:
"(b)(1)
The tax imposed pursuant to subsection (a) of this Code section shall be
computed in accordance with the following tables:
(A)
For the taxable years beginning prior to January 1, 2009:
|
SINGLE
PERSON
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $750.00
|
1%
|
|
Over
$750.00 but not over $2,250.00
|
$7.50
plus 2% of amount over $750.00
|
|
Over
$2,250.00 but not over $3,750.00
|
$37.50
plus 3% of amount over $2,250.00
|
|
Over
$3,750.00 but not over $5,250.00
|
$82.50
plus 4% of amount over $3,750.00
|
|
Over
$5,250.00 but not over $7,000.00
|
$142.50
plus 5% of amount over $5,250.00
|
|
Over
$7,000.00
|
$230.00
plus 6% of amount over $7,000.00
|
|
MARRIED
PERSON FILING A SEPARATE RETURN
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $500.00
|
1%
|
|
Over
$500.00 but not over $1,500.00
|
$5.00
plus 2% of amount over $500.00
|
|
Over
$1,500.00 but not over $2,500.00
|
$25.00
plus 3% of amount over $1,500.00
|
|
Over
$2,500.00 but not over $3,500.00
|
$55.00
plus 4% of amount over $2,500.00
|
|
Over
$3,500.00 but not over $5,000.00
|
$95.00
plus 5% of amount over $3,500.00
|
|
Over
$5,000.00
|
$170.00
plus 6% of amount over $5,000.00
|
|
HEAD
OF HOUSEHOLD AND MARRIED PERSONS
FILING
A JOINT RETURN
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $1,000.00
|
1%
|
|
Over
$1,000.00 but not over $3,000.00
|
$10.00
plus 2% of amount over $1,000.00
|
|
Over
$3,000.00 but not over $5,000.00
|
$50.00
plus 3% of amount over $3,000.00
|
|
Over
$5,000.00 but not over $7,000.00
|
$110.00
plus 4% of amount over $5,000.00
|
|
Over
$7,000.00 but not over $10,000.00
|
$190.00
plus 5% of amount over $7,000.00
|
|
Over
$10,000.00
|
$340.00
plus 6% of amount over $10,000.00
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(B)
For the taxable years beginning on or after January 1, 2009:
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SINGLE
PERSON
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $2,500.00
|
1%
|
|
Over
$2,500.00 but not over $3,750.00
|
$25.00
plus 3% of amount over $2,500.00
|
|
Over
$3,750.00 but not over $7,000.00
|
$62.50
plus 4% of amount over $3,750.00
|
|
Over
$7,000.00 but not over $35,000.00
|
$192.50
plus 5.84% of amount over $7,000.00
|
|
Over
$35,000.00
|
$1,827.70
plus 7% of amount over $35,000.00
|
|
MARRIED
PERSON FILING A SEPARATE RETURN
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $2,500.00
|
1%
|
|
Over
$2,500.00 but not over $3,750.00
|
$25.00
plus 3% of amount over $2,500.00
|
|
Over
$3,750.00 but not over $7,000.00
|
$62.50
plus 4% of amount over $3,750.00
|
|
Over
$7,000.00 but not over $35,000.00
|
$192.50
plus 5.84% of amount over $7,000.00
|
|
Over
$35,000.00
|
$1,827.70
plus 7% of amount over $35,000.00
|
|
HEAD
OF HOUSEHOLD AND MARRIED PERSONS
FILING
A JOINT RETURN
|
|
|
If
Georgia Taxable
Net
Income Is:
|
The
Tax Is:
|
|
Not
over $5,000.00
|
1%
|
|
Over
$5,000.00 but not over $7,500.00
|
$50.00
plus 3% of amount over $5,000.00
|
|
Over
$7,500.00 but not over $14,000.00
|
$125.00
plus 4% of amount over $7,500.00
|
|
Over
$14,000.00 but not over $70,000.00
|
$385.00
plus 5.84% of amount over $14,000.00
|
|
Over
$70,000.00
|
$3,655.40
plus 7% of amount over
$70,000.00"
|
SECTION
5.
Said
title is further amended in Code Section 48-7-27, relating to computation of
taxable net income, by revising paragraph (1) of subsection (a) as
follows:
"(1)
Either the sum of all itemized nonbusiness deductions used in computing federal
taxable income if the taxpayer used itemized nonbusiness deductions in computing
federal taxable income or, if the taxpayer could not or did not itemize
nonbusiness deductions, then a standard deduction as provided for in the
following subparagraphs:
(A)
In the case of a single taxpayer or a head of household, $2,300.00;
(B)
In the case of a married taxpayer filing a separate return,
$1,500.00;
(C)
In the case of a married couple filing a joint return, $3,000.00;
(D)
An additional deduction of $1,300.00 for the taxpayer if the taxpayer has
attained the age of 65 before the close of the taxpayer´s taxable year. An
additional deduction of $1,300.00 for the spouse of the taxpayer shall be
allowed if a joint return is made by the taxpayer and the taxpayer´s spouse
and the spouse has attained the age of 65 before the close of the taxable year;
and
(E)
An additional deduction of $1,300.00 for the taxpayer if the taxpayer is blind
at the close of the taxable year. An additional deduction of $1,300.00 for the
spouse of the taxpayer shall be allowed if a joint return is made by the
taxpayer and the taxpayer´s spouse and the spouse is blind at the close of
the taxable year. For the purposes of this subparagraph, the determination of
whether the taxpayer or the spouse is blind shall be made at the close of the
taxable year except that, if either the taxpayer or the spouse dies during the
taxable year, the determination shall be made as of the time of the
death.
For
taxable years beginning on or after January 1, 2009, the standard deduction
amounts enumerated in subparagraphs (A) through (E) of this paragraph shall be
annually adjusted by the commissioner to reflect the effect of economic
inflation or deflation on individual taxpayers, and, for such purpose, the
commissioner may use the Consumer Price Index as reported by the Bureau of Labor
Statistics of the United States Department of Labor or any other similar index
established by the federal government if the commissioner determines that such
federal index reflects the effects of inflation and deflation on
taxpayers;"
SECTION
6.
Said
title is further amended by adding a new Code section to read as
follows:
"48-7-29.13.
(a)
As used in this Code section, the term 'ad valorem tax expense' means the
expenditure of funds by the taxpayer for the payment of such taxpayer´s
state and local ad valorem taxes on real and personal property in the tax year
for which the credit under this Code section is claimed and
allowed.
(b)
A taxpayer whose Georgia taxable net income does not exceed $45,000.00 shall be
allowed a credit against the tax imposed by Code Section 48-7-20 for ad valorem
tax expenses in an amount not to exceed 3.5 percent of such taxpayer´s
Georgia taxable net income.
(c)
In no event shall the total amount of the tax credit under this Code section for
a taxable year exceed the taxpayer´s income tax liability. Any unused tax
credit shall be allowed the taxpayer against succeeding years´ tax
liabilities. No such tax credit shall be allowed the taxpayer against prior
years´ tax liabilities.
(d)
The commissioner shall be authorized to promulgate any rules and regulations
necessary to implement and administer the provisions of this Code
section."
SECTION
7.
Said
title is further amended in Code Section 48-8-2, relating to definitions
regarding sales and use taxes, by revising paragraph (6) by deleting "or" at
the end of subparagraph (F), replacing the period at the end of subparagraph (G)
with "; or", and adding a new subparagraph to read as follows:
"(H)
Sales of or charges made for the following services:
(i)
Towing of motor vehicles;
(ii)
Docking of watercraft or landing of aircraft;
(iii)
Repair or alteration of apparel or shoes;
(iv)
Interstate long distance telephone calls;
(v)
Repair of watches or jewelry;
(vi)
Maintenance or repair of motor vehicles;
(vii)
Cable or satellite television;
(viii)
Landscaping or lawn care; or
(ix)
Club membership fees or dues."
SECTION
8.
Said
title is further amended in Code Section 48-8-3, relating to exemptions from
sales and use taxes, by adding a new paragraph to read as follows:
"(70.1)
The sale of natural or artificial gas, #2 fuel oil, #6 fuel oil, propane, and
coal used directly or indirectly in the manufacture or processing of tangible
personal property primarily for resale and the fuel cost recovery component of
retail electric rates used directly or indirectly in the manufacture or
processing of tangible personal property primarily for
resale;"
SECTION
9.
Said
title is further amended in Code Section 48-11-2, relating to the excise tax on
tobacco products, by revising subsection (a) as follows:
"(a)
An excise tax, in addition to all other taxes of every kind imposed by law, is
imposed upon the sale, receipt, purchase, possession, consumption, handling,
distribution, or use of cigars, cigarettes, and loose or smokeless tobacco in
this state at the following rates:
(1)
Little cigars weighing not more than three pounds per thousand: two and one-half
mills each;
(2)
All other cigars: 23 percent of the wholesale cost price, exclusive of any
trade, cash, or other discounts or any promotion, advertising, display, or
similar allowances;
(3)
Cigarettes:
37¢
$1.37
per pack of 20 cigarettes and a like rate, pro rata, for other size packages;
and
(4)
Loose or smokeless tobacco: 10 percent of the wholesale cost price, exclusive of
any trade, cash, or other discounts or any promotion, advertising, display, or
similar allowances."
SECTION
10.
Title
36 of the Official Code of Georgia Annotated, relating to local government, is
amended by adding a new chapter to read as follows:
"CHAPTER
89A
36-89A-1.
As
used in this chapter, the term:
(1)
'County millage rate' means the net ad valorem tax millage rate levied by a
county for county purposes and applying to qualified motor vehicles in the
county, including any millage levied for those special districts reported on the
2004 ad valorem tax digest certified to and received by the state revenue
commissioner on or before December 31, 2004, but not including any millage
levied for purposes of bonded indebtedness and not including any millage levied
on behalf of a county school district for educational purposes.
(2)
'Eligible assessed value' means a certain stated amount of the assessed value of
each motor vehicle in this state to which the tax relief grant under this
chapter shall be applicable. The assessed value of motor vehicles shall be
determined pursuant to the uniform evaluation of motor vehicles prepared
pursuant to Code Section 48-5-442.
(3)
'Fiscal authority' means the individual authorized to collect ad valorem taxes
for a county or municipality which levies ad valorem taxes.
(4)
'Municipal millage rate' means the net ad valorem tax millage rate levied by a
municipality for municipal purposes and applying to qualified motor vehicles in
the municipality, including any millage levied for those special tax districts
reported on the 2004 City and Independent School Millage Rate Certification
certified to and received by the state revenue commissioner on or before
December 31, 2004, but not including any millage levied for purposes of bonded
indebtedness and not including any millage levied on behalf of an independent
school district for educational purposes.
(5)
'School millage rate' means the net ad valorem tax millage rate levied on behalf
of a county or independent school district for educational purposes and applying
to qualified motor vehicles in the county or independent school district, not
including any millage levied for purposes of bonded indebtedness and not
including any millage levied for county or municipal purposes.
(6)
'State millage rate' means the state millage levy.
36-89A-2.
Each
year, the General Assembly shall appropriate funds for motor vehicle tax relief
grants to counties, municipalities, and county or independent school districts
pursuant to and in furtherance of the provisions of Article VII, Section IIB,
Paragraph I of the Constitution.
36-89A-3.
(a)
Each year, the General Assembly shall appropriate to the Department of Revenue
funds to provide motor vehicle tax relief grants to counties, municipalities,
and county or independent school districts. The General Appropriations Act
shall specify the amount appropriated which shall be sufficient for each 12
month period so that each taxpayer receives a credit in an amount equal to 50
percent of the eligible assessed value of each motor vehicle.
(b)
If for any reason the amount appropriated in the General Appropriations Act is
insufficient to fund the eligible assessed value stated in the General
Appropriations Act, the amount appropriated may be adjusted in amendments to the
General Appropriations Act.
36-89A-4.
(a)(1)
Pursuant to the appropriation of funds as provided in Code Section 36-89A-3,
such grants shall each month be allotted to each county, municipality, and
county or independent school district in this state as follows:
(A)
Immediately following the actual preparation of ad valorem property tax bills,
each county fiscal authority shall notify the Department of Revenue of the total
amount of tax revenue which would be generated by applying the sum of the state
and county millage rates to the eligible assessed value of each motor vehicle in
the county. The total amount of actual tax credits, so calculated, given to all
motor vehicles in the county shall be the amount of the grant to that
county;
(B)
Immediately following the actual preparation of ad valorem property tax bills,
each county or independent school district´s fiscal authority shall notify
the Department of Revenue of the total amount of tax revenue which would be
generated by applying the school millage rate to the eligible assessed value of
each motor vehicle in the county or independent school district. The total
amount of actual tax credits, so calculated, given to all motor vehicles in the
county or independent school district shall be the amount of the grant to that
county or independent school district; and
(C)
Immediately following the actual preparation of ad valorem property tax bills,
each municipality´s fiscal authority shall notify the Department of Revenue
of the total amount of tax revenue which would be generated by applying the
municipal millage rate to the eligible assessed value of each motor vehicle in
the municipality. The total amount of actual tax credits, so calculated, given
to all motor vehicles in the municipality shall be the amount of the grant to
that municipality.
(2)
Credit amounts computed under paragraph (1) of this subsection shall be applied
to reduce the otherwise applicable tax liability on a dollar-for-dollar basis,
but the credit granted shall not in any case exceed the amount of the otherwise
applicable tax liability.
(b)
The grant of funds to each county shall be conditioned on the county´s
fiscal authority reducing each motor vehicle´s otherwise applicable
liability for county taxes for county purposes by a credit amount calculated in
subparagraph (a)(1)(A) of this Code section.
(c)
The grant of funds to each county or independent school district shall be
conditioned on the county or independent school district´s fiscal authority
reducing each motor vehicle´s otherwise applicable liability for school
taxes by a credit amount calculated in subparagraph (a)(1)(B) of this Code
section.
(d)
The grant of funds to each municipality shall be conditioned on the
municipality´s fiscal authority reducing each motor vehicle´s
otherwise applicable liability for municipal taxes by a credit amount calculated
in subparagraph (a)(1)(C) of this Code section.
(e)
Each fiscal authority shall show the credit amount on the tax bill, together
with a prominent notice in substantially the following form: 'This reduction in
your bill is the result of motor vehicle tax relief enacted by the Governor and
the General Assembly of the State of Georgia.'
36-89A-5.
(a)
The state revenue commissioner shall administer this chapter and shall adopt
rules and regulations for the administration of this chapter, including specific
instructions to local governments. The state revenue commissioner may adopt
procedures for partial or installment distribution of grants when the
commissioner determines that a full distribution will only result in the
necessity of return of funds under subsection (b) of this Code
section.
(b)
If any excess funds remain from the funds granted to any county, municipality,
or county or independent school district under this chapter, after the county,
municipality, or county or independent school district complies with the credit
requirements of Code Section 38-89A-4, such excess funds shall be returned by
the county, municipality, or county or independent school district to the
Department of Revenue.
36-89A-6.
Any
credit under this chapter which is erroneously or illegally granted shall be
recoverable by the political subdivision granting such credit in the same manner
as any other delinquent tax."
SECTION
11.
(a)
Except as otherwise provided in this section, this Act shall become effective
upon its approval by the Governor or upon its becoming law without such
approval.
(b) Unless prohibited by the federal Voting Rights Act of 1965, as amended, the Secretary of State shall call and conduct an election as provided in this section for the purpose of submitting Section 3 of this Act to the electors of the State of Georgia for approval or rejection. The Secretary of State shall conduct that election on the date of the November, 2008, state-wide general election. The Secretary of State shall issue the call and conduct that special election as provided by general law. The Secretary of State shall cause the date and purpose of the special election to be published in the official organ of each county in the state once a week for two weeks immediately preceding the date of the referendum. The ballot shall have written thereon the following:
(b) Unless prohibited by the federal Voting Rights Act of 1965, as amended, the Secretary of State shall call and conduct an election as provided in this section for the purpose of submitting Section 3 of this Act to the electors of the State of Georgia for approval or rejection. The Secretary of State shall conduct that election on the date of the November, 2008, state-wide general election. The Secretary of State shall issue the call and conduct that special election as provided by general law. The Secretary of State shall cause the date and purpose of the special election to be published in the official organ of each county in the state once a week for two weeks immediately preceding the date of the referendum. The ballot shall have written thereon the following:
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"( ) YES
( ) NO
|
Shall
the Act be approved which grants an exemption from ad valorem taxation on
inventory of a business?"
|
All
persons desiring to vote for approval of the Act shall vote "Yes," and all
persons desiring to vote for rejection of the Act shall vote "No." If more than
one-half of the votes cast on such question are for approval of the Act, then
Section 3 of this Act shall become effective on January 1, 2009, and shall
apply to all taxable years beginning on or after that date. If Section 3 of
this Act is not so approved or if the election is not conducted as provided in
this section, Section 3 of this Act shall not become effective and Section 3 of
this Act shall be automatically repealed on the first day of January
immediately following that election
date.
(c) Section 4 of this Act shall become effective January 1, 2009.
(d) Sections 5 and 6 of this Act shall become effective on January 1, 2009, and shall be applicable to all taxable years beginning on or after January 1, 2009.
(e) Sections 7, 8, and 9 of this Act shall become effective on July 1, 2008.
(f) Section 10 of this Act shall become effective on January 1, 2009; provided, however, that Section 10 this Act shall only become effective on January 1, 2009, upon the ratification of a resolution at the November, 2008, state-wide general election, which resolution amends the Constitution so as to authorize motor vehicle tax relief grants and require appropriations to fund such grants. If such resolution is not so ratified, Section 10 of this Act shall not become effective and shall stand repealed in its entirety on January 1, 2009.
(c) Section 4 of this Act shall become effective January 1, 2009.
(d) Sections 5 and 6 of this Act shall become effective on January 1, 2009, and shall be applicable to all taxable years beginning on or after January 1, 2009.
(e) Sections 7, 8, and 9 of this Act shall become effective on July 1, 2008.
(f) Section 10 of this Act shall become effective on January 1, 2009; provided, however, that Section 10 this Act shall only become effective on January 1, 2009, upon the ratification of a resolution at the November, 2008, state-wide general election, which resolution amends the Constitution so as to authorize motor vehicle tax relief grants and require appropriations to fund such grants. If such resolution is not so ratified, Section 10 of this Act shall not become effective and shall stand repealed in its entirety on January 1, 2009.
SECTION
12.
All
laws and parts of laws in conflict with this Act are repealed.