News and Insights

Georgia Tax Study Group Prepares Recommendations for 2011 Legislative Session

Tax Development Nov 30, 2010

The Special Council on Tax Reform and Fairness for Georgians (“Special Council”) has scheduled a December 1, 2010 meeting to begin preparing its recommendations for changes to the state’s tax structure. These recommendations will be presented in 2011 to the Georgia General Assembly.

Created as a result of House Bill 1405 (“HB 1405”) passed earlier this year by the Georgia Legislature, the Special Council is comprised of business representatives, economists, and Governor Perdue. It is required to conduct studies, report findings, and make recommendations to Georgia’s Speaker of the House and Lieutenant Governor by January 10, 2011.

In order to accomplish these objectives, the Special Council conducted a series of public hearings across the state this year, wrapping up the eleventh and final hearing on October 27, 2010 in Dalton, Georgia. As mentioned above, the Special Council has scheduled its first full working session to process its findings and begin working on recommendations for 1:00 p.m. on Wednesday, December 1, 2010 at Mercer University’s Graduate and Professional Campus in Atlanta.

“The Special Council’s efforts have led to constructive input to form the basis for effectively re-engineering the current Georgia tax code,” said Georgia Representative Chuck Martin, R-Alpharetta and Ryan Director. “I am confident that the Special Council’s recommendations will lead to a simplified tax system that will benefit Georgia’s taxpayers.”

With all taxes (except for property tax) on the table and every related exemption under review, the business community used the hearings to repeatedly caution the Special Council that the elimination or reduction of certain sales and use tax exemptions would hurt their ability to compete, particularly in light of current economic pressures. For example:

  • Hospitals and healthcare facilities told the Special Council that sales tax exemptions benefiting the healthcare industry ensure that they can provide services to patients regardless of the patient’s ability to pay.
  • The Georgia Agriculture Business Council and local farmers focused on the importance of the exemption for feed, fertilizer, and equipment.
  • Industrial companies spoke in favor of extending exemptions for energy used in manufacturing, telling the Special Council that Georgia is already at a competitive disadvantage relative to its neighboring states, with regard to manufacturing, in encouraging manufacturing opportunities in the state. Other industries similarly raised concerns that Georgia’s tax structure is not competitive with surrounding states and urged the Special Council to consider expanding sales and use tax exemptions.
  • A number of people advocated broadening the state’s base of taxable items to include more services.

Also of note, HB 1405 requires the creation of a special legislative committee called the Special Joint Committee on Georgia Revenue Structure (the “Joint Committee”) that will consider the Special Council’s recommendations and generate legislation consistent with such recommendations. Neither the Joint Committee nor the full House or Senate can make significant changes to those recommendations.

Information provided to the Special Council during its statewide hearings can be accessed via the Special Council’s Website at