Georgia tax overhaul raises some big questions — and could prove costly for local governments across the state

I posted earlier today about the suddenness with which the Georgia legislature has pushed some major changes to the tax code. The measure — HB 386 — was exempt from the ordinary rule for bills to be approved by at least one chamber by the 30th day of the session.

HB 386 was approved by an overwhelming 155-9 vote in the Georgia House today. The seeming bipartisan support sure doesn’t reassure me — I’m more concerned about the unanticipated impacts (or perhaps entirely anticipated, but not publicly discussed).

According to the AJC, the bill would do the following:

A key element of the tax plan would be a sales tax on some Internet purchases that would produce $81 million in state and local revenue over three years.

The bill would also cap income tax exclusions for seniors and do away with some tax exemptions for property in conservation easements. And it would change taxes on car purchases from dealers and between individuals.

New breaks could give married couples a bigger exemption on state income taxes and provide hundreds of millions of dollars in tax exemptions on equipment and energy for manufacturers and agribusiness, which supporters say would help lure businesses and jobs to Georgia. It could re-establish sales tax holidays for school shopping and energy-efficient appliances.

The AJC’s Political insider said that it posted the entire fiscal note from Georgia State about the bill’s impacts, but the document is missing a couple of pages.

But the summary of it shows how local government coffers will be affected by these changes much more than the state:

Changes to the system for car title fees will net the state half a billion dollars between 2013 and 2015, but will cost local governments $138 million.

I’m most concerned about the ridiculously called “E-fairness”, which will force many online retailers to charge state sales taxes. If that turns out to be enforceable, then that will likely cost Georgia consumers more than the slim estimates (will online shopping by the state’s residents really only increase by 4.5% from 2014 to 2015?).

I’m also very concerned about the elimination of the cap for taxing retirees’ income. If that impacts Georgia’s ability to attract retirees from other parts of the country, we could damage the state’s economy in myriad ways.

I’m disappointed that so many members of the Georgia House have already signed off on this bill with such questions unanswered — and for the most part unasked, due to the fast track treatment.