Georgia Legislature Considers Changes to Taxpayer Confidentiality, Refund Interest

On February 29, 2016, the Georgia House of Representatives approved legislation to enhance confidentiality of certain tax information, adjust the interest rate on tax payments, and notify local jurisdictions of certain tax refund requests. Now, the bill goes to the Georgia Senate for consideration.

House Bill 960 Committee Substitute by Representative Trey Kelley (R-Cedartown) passed on the House Floor with no opposition (Yea: 164; Nay: 0). Key provisions of the bill include:

• Taxpayer information will not be disclosed to state legislators or local government regarding the department’s administration of any tax.
• The tax interest rate would be adjusted to prime plus 3% to accrue monthly. Currently, the interest rate is 1% per month.
• The interest rate will apply to both taxes owed and taxes refunded.
• Interest for underpayment of tax will accrue from the date the tax is due until the date the tax is paid.
• Interest for overpayment of tax will be calculated from date of payment of the tax.
• Georgia taxpayers will be required to pay taxes and file refund claims electronically.
• It will require local government and taxpayer notification of sales and use tax refund claims of local significance. Local significance means a claim for refund or overpayment equal to or greater than 10% of the average of sales and use tax distributions to a single local jurisdiction.
• The Department of Revenue will notify the affected local jurisdiction impacted by a refund claim of local significance and furnish a copy of the notification to the taxpayer.
• Civil and criminal penalties will be applicable to a local government employee who does not adhere to Georgia’s confidential and privilege statute.
• Large refund claims of local significance may be subject to review by the Department of Audits and Accounts to determine whether the Department of Revenue followed proper procedures and used appropriate methodology to reach its final refund determination.
• Refund claims of local significance not completed within two years after the claim filing date will be automatically transferred to the Georgia Tax Tribunal for a show cause proceeding. The tribunal will determine the party at fault for the delay in determining the refund claim.
• If the tribunal determines the taxpayer is at fault, an order will be issued to forfeit the right to interest.
• If the tribunal determines the Department of Revenue is at fault, the order will require interest paid on the claim for refund.
• If the delay is considered justified, the order is sent back to the Department of Revenue.

The tribunal will remand all matters back to the Department of Revenue for the determination of the claim for refund. The tribunal, at its discretion, may award reasonable attorney fees to either party. Tribunal orders will be excluded from public disclosure.

• Ad valorem tax failure to file or late payment penalties will increase to a tiered approach with a 20% cap. After 90 days, penalty will be 5% of tax due. After 180 days, an additional 5% penalty will be imposed at each subsequent 180-day period and will cap at 20%. The current penalty is 10% after 90 days.

Ryan will have a full team of professionals engaged in tracking and monitoring all tax policy related issues.

TECHNICAL INFORMATION CONTACTS:

Susan Traylor Bittick
Principal
Ryan
512.960.1142
susan.bittick@ryan.com

Gwen Evans
Manager
Ryan
972.934.0022
gwen.evans@ryan.com