Georgia Chamber of Commerce President and CEO Chris Clark told members of the Buckhead Business Association that Georgia’s reform of its tax code will be good for them.
Clark spoke at the BBA’s Thursday morning breakfast on March 22. Hours after he spoke, the changes that will mean tax breaks for economic development, tax cuts for married couples and a new tax on internet sales was on its way to Gov. Nathan Deal for approval.
The bill was introduced toward the end of the legislative session, but Clark said the basic components of the bill were discussed last year.
“Some folks are saying you’re rushing this, it’s too fast,” Clark said. “Folks, we’ve got a good bill.”
The good things in the bill, Clark said, include:
-Phasing out over four years an energy tax on manufacturing, mining and newspaper publishing.
-Charging sales tax for internet purchases, projected to bring in about $89 million in state and local revenue over the next three years, according to a financial impact statement for the bill.
-Allowing the state to waive the tax on construction materials in order to lure a big business, something Clark called “another tool in the tool box.”
-Increases the state tax exemption for married couples from $5,400 to $7,400.
The legislation also ends taxes on vehicles purchased after March 1, 2013 and replaces it with a 6.5 percent title fee which increases to 7 percent by 2015.
In the next three years the state would lose $62.8 million in revenue, and local governments would lose about $200 million, according to the financial impact statement.
State Rep. Wendell Willard, R-Sandy Springs, who is also the city’s attorney, said through the city’s spokeswoman that cities would receive money to offset this cost. Spokeswoman Sharon Kraun said the city would need at least a week to determine what the impact would be on the city’s budget.
The bill does not lower the threshold for job creation to allow small businesses to take advantage of tax breaks offered as economic incentives to big businesses, something Clark said he wished was in the bill.
There is another bill, though, he hopes will pass this year. He said it would use some of the retirement funds of state employees to invest in small businesses. It would essentially allow the state to have partial ownership of the company, meaning it would see a potential return on that investment.
He also said that charging the sales tax on internet purchases won’t be easy. He said the state will follow models used in California and Texas.
“Other states have done it,” Clark said. “It’s taken them time. It will take three to four years to put up the technical systems.”
BBA President Catherine Cattles said while she appreciates the state’s efforts, she wants to see more of a focus on building up the state’s home-grown companies.
“Who are the real drivers in this state? Small to medium-sized businesses,” Cattles said.