News and Insights

Georgia Bill Sets Stage for Major Tax Revisions

Tax Development Apr 05, 2010

Georgia’s legislative leadership is lining up behind a House Bill filed this week aimed at overhauling the state’s tax system. House Bill 1405 would create the “2010 Special Council on Tax Reform and Fairness for Georgians” (“Special Council”), tasked with initiating a study this summer of the state’s current revenue sources and base revenue structure. The panel, made up of business representatives, economists, and political leaders, would report findings and recommendations to the House Speaker and the Lieutenant Governor by January 10, 2011.

Bill sponsor Representative Larry O’Neal, R-Warner Robins, who chairs the House Ways and Means Committee, said that House Bill 1405 sets the stage for “a total overhaul” of the state’s revenue system, which he said “has not kept up with our growth.” Speaker David Ralston, Majority Leader Jerry Keen, and Speaker Pro Tem Jan Jones have joined Representative O’Neal as sponsors of the bill.

Georgia lawmakers have spent much of their current session grappling with a major budget shortfall. House Bill 1405 contains nothing that would impact that, but the Special Council’s recommendations would provide new options for the General Assembly in 2011. Speaker Ralston said Thursday that the “time to undertake this kind of project is when times are not so good.”

The Special Council is expected to look at sales taxes and current sales tax exemptions, a possible reduction in income and corporate taxes, and the state’s capital gains tax. Representative O’Neal said the review will not consider local property system changes or seek to impact local taxes or tax collections.

Some members of the Special Council would be appointed by the Speaker and Lieutenant Governor. Others are actually named in the bill. House Bill 1405 provides for a seat on the Special Council for Zell Miller, a former Governor, Lieutenant Governor, and U.S. Senator, as well as economists Jeff Humphreys, Roger Tutterow, and Christine Ries; outgoing Governor Sonny Perdue, whose term ends in 2010; the 2010 President of the Georgia Chamber of Commerce; and the 2010 State Director for the National Federation of Independent Business. The Lieutenant Governor and Speaker would each appoint two additional members.

The bill would also create a special legislative committee called the Special Joint Committee on Georgia Revenue Structure (“Joint Committee”), composed of the President Pro Tem of the Senate and the Speaker Pro Tem of the House; the Majority Leader of the Senate and the Majority Leader of the House; the Minority Leader of the Senate and the Minority Leader of the House; the Chairman of the Senate Finance Committee and the Chairman of the House Ways and Means Committee; two members of the House appointed by the Speaker, including one from the Minority Party; two members of the Senate appointed by the Lieutenant Governor, including one from the Minority Party.

The Joint Committee would consider the Special Council’s recommendations and would be required to introduce “one or more bills” that reflect those recommendations "without significant changes." It would also have continuing jurisdiction over those bills during the legislative process. If the Joint Committee recommends that one of the bills pass or passes by committee substitute, the proposed legislation would go first to the House, where it would bypass the Rules Committee and be eligible to be called up for consideration on the House floor at any time fixed by the Speaker. The bills would be subject to an up or down vote on the House floor without amendments. If passed, the bills would move to the Senate, which would be required to follow the same procedure.

Representative Chuck Martin, R-Alpharetta, who also is a Director in Ryan’s Business Development group, applauded Georgia’s legislative leaders for introducing the measure and said he was glad to see support for it in the House and Senate, and from the Governor’s Office. Lieutenant Governor Casey Cagle and Senate Majority Leader Chip Rogers have also endorsed the bill.

“It’s time to review our current system and create a system that is fair, effective, and geared to today’s economy,” said Representative Martin. “Georgians deserve a system they can trust.”