There has been a lot written about the federal tax cut and how some states might experience a windfall and wind up keeping part of taxpayers refunds as state taxes. Gov. Deal, Lt. Governor Casey Cagle and Speaker David Ralston presented a tax cut plan this week that will pretty much insure any tax refund a taxpayer gets from the federal government will all go to the taxpayer.
This plan cuts Georgia Income tax rates and raises the standard deduction. Between the two, over two years, the plan will cut Georgia taxes by some $5 billion dollars.
Here are the main features of the bill:
Starting January 1, 2018, this tax year, the standard deduction will double for individuals to $4,600 (single) and $6,000 for married filing jointly.
In Tax Year 2019, the top individual income tax rate and the corporate tax rate drop from 6 percent to 5.75 percent.
In Tax Year 2020, the Legislature must vote to affirm the lowering of the top personal income and corporate tax rates to 5.50 percent.
These changes expire when the Federal Tax cuts expire on December 31, 2025.
As with all tax legislation, there are details. For more specific information, look up HB 821 and HB 918 at the address below.
Passed in the Senate this week
SB 184 — Reduces the burden inconsistent state agency databases place on the Office of Planning and Budget by establishing an integrated Population Health Data (iPHD) Project. Tasks the iPHD project with secure receipt, maintenance, and transmission of data into an integrated database of anonymous, more generalized data.
SB 330, Green Agricultural Education Act — Enacts an agricultural education program with a three part core-classroom/lab, real world learning, and FFA participation. Permits Department of Education to pilot program in a minimum of 6 public elementary schools before deciding to implement statewide.
SB 356 — Reassigns the Commission on the Holocaust to the Department of Community Affairs.
SB 371 — Helps counties and cities determine if businesses are collecting and remitting sales taxes by attaining basic information on businesses’ sales tax certificates from the Department of Revenue.
SB 319 — Removes office of State Fire Marshall from the Department of Insurance. Creates the Department of Fire Safety, Commissioner of Fire Safety, Fire Safety Advisory Board, and a Professional Development Division tasked with overseeing training.
SB 363 — Allows county election superintendents to process and tabulate advance voting ballots after 6:00 P.M. on the day of the primary/election/runoff; the same way that absentee ballots are processed and tabulated. Maintains secrecy by sequestering tabulators from time of process and tabulation until poll closing.
SB 375, Keep Faith in Adoption and Foster Care Act — Protects from adverse action child-placing agencies who decline a department referral or decline to perform particular services due to their sincerely-held religious beliefs. Would allow more adoptions.
SB 377 — Moves the State Workforce Development Board from the Department of Economic Development to the Technical College System of Georgia.
SB 427 — Outlines recommended items (earnings, income, ability to pay, etc.) which courts should take into consideration when determining a parent’s owed child support amount. Currently, law simply states that courts should make determination based on “evidence.”
Full transcripts of bills may be found at http://www.legis.ga.gov/en-US/default.aspx . Simply type the bill number into the box at the top left-hand corner of the screen and specify if it is in the House or the Senate. The FY 2018 budget (H.B. 44) may be found at http://www.senate.ga.gov/sbeo/en-US/AppropriationsDocuments.aspx. As always, I welcome any questions you may have.
January revenues increased some 16.7 percent that may have signaled many taxpayers prepaying taxes in December to get ahead of federal tax changes. Individual income taxes also fluctuated, gaining 27.0 percent. Net sales taxes were positive at 3.3 percent. So far this fiscal year, state revenues are showing a 6.2 percent growth rate.
State revenues now exceed the FY 2018 budget by about $500 million and Georgia’s 12-month trailing average shows a 5.5 percent growth. A comparison of other states’ 12-month trailing average shows North Carolina at 1.1 percent, Alabama at 4.0 percent, South Carolina, 5.4 percent and Tennessee, 3.0 percent.