As part of HB 385, a bill introduced in late February, several proposed tax changes to Georgia’s tax code are being discussed. The Atlanta Journal Constitution has been covering the changes extensively but for anyone who has missed some coverage, here is a summary of the proposed revisions.
(For anyone who missed it here is first post on proposed tax changes in Georgia.)
Here are more of the recommendations put forth in the bill:
Elimination of tax breaks for retirees: Under former Gov. Sonny Perdue, taxes on retirement income were reduced significantly. Starting in 2012, the taxes on non-work income for seniors (65+) will be reduced annually until 2016, when they will be eliminated completely. However if some of the recommendations from HB 385 go into effect, these tax breaks may not happen at all. This would leave all income susceptible to taxes regardless of a person’s age.
Private sales: More proposed changes involve charging sales tax on sales of cars, boats and airplanes between private individuals. According to the AJC, the tax would likely kick in when the new owner pays county ad velorum tax on the new vehicle. The new owner would be responsible for paying sales tax based on the bill of sale from the seller (this would be in addition to tag fees and property taxes on the vehicle). Georgia is currently one of only six states that does not charge sales tax on private sales of vehicles.
Tax on communication services: A new seven percent excise tax on all communication services was recommended in HB 385. Four percent of the tax would go to the state and three percent would go to local governments. This new tax would replace current fees like local sales taxes and franchise fees. The proposed changes include a first-time seven percent tax on satellite service. There would also be increased taxes on other communication services such as cable and all but the most basic cell phone plans. The only service that would not be affected by the changes is land-line phone service.
Cigarette tax: One of the proposals in the bill suggests raising the tax on cigarettes from 37 cents to 68 cents per pack (an 84 percent increase).