Members of the Georgia House Ways & Means Committee voted Thursday in favor of five tax changes.
The committee pushed forward bills to the House Rules Committee that adjust occupational tax, change how certain tax revenue is distributed, add more sales tax for marketplace facilitators and reduce interest rates for refunds.
House Bill 715 would change three of the methods local governments use to determine taxes for business.
The bill removes gross receipts as one of the variables used to calculate the amount of occupation tax businesses, organizations and professionals can be charged.
According to Georgia law, local governments can impose occupational taxes on entities that are located in or provide services within their geographical boundaries. If HB 715 becomes law, the occupational tax would be determined by the number of people employed and profit ratios, or local governments could opt to use a flat fee.
It also removes a special provision that allows certain professionals to choose how their occupational tax is determined.
Lawyers, doctors, accountants, engineers, architects and therapists are included in that exempt list. They get to chose if they are taxed under the government’s calculation method or pay a flat fee that is no more than $400.
The third portion of the bill would require regulatory fees collected by local government to be reflowed only to the specific industry it was collected from. If the bill passes, it will become law in July 2025.
House Bill 807 interconnects with HB 715 as it allows businesses to use an affidavit from a certified personal accountant instead of tax returns for an audit by local governments. It also stops local governments from using square footage to calculate regulatory fees for new construction.
House Bill 378 and House Bill 448 are related to the marketplace facilitator law signed by Gov. Brian Kemp on Jan. 31. The new law, which goes into effect on April 1, requires sales and use taxes to be collected from retailers who coordinate the sale of products or provide services in the state.
The two bills favored by the committee Thursday would require online rental car dealers to pay an excise tax and lodging companies to pay hotel/motel tax of $5 per unit.
Both bills would increase revenue for the state.
On the other hand, House Bill 846 might shortchange some Georgians. The bill would reduce the interest rate for state and local tax-return refunds from the prime loan rate plus 3 percent to just the prime rate.
House Bill 779 would revise a recent law. As of July 1, 2019, 28 percent of the revenue from Title Ad Valorem Tax, a tax based on the value of a vehicle, collected in a county was allocated to county governments, while its municipalities received 23 percent. The new bill would disburse 28 percent to the municipalities and 23 percent to the county.
