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Legislators eye tax code changes to push job growth

Bill would cut incentives for businesses to locate to less developed areas

POSTED: February 28, 2011 11:42 p.m.

House lawmakers focused on taxes Monday, introducing bills that would encourage job creation and rewrite the state’s tax code.

Rep. Doug Collins, R-Gainesville, carried a bill for Gov. Nathan Deal that would give businesses a $1,750 tax credit per job for locating in Georgia or expanding a current business.

“We’re looking to encourage and help incentivize job creation, which really fits into what we need,” Collins said. “It takes a long-term look at what we need and what the governor wanted to initiate for job creation.”

House Bill 384 would change the state’s current system of tax credits, which ranks counties based on economic vitality and gives a higher tax incentive to locate in counties that need help. Intended to encourage economic development, the law often left rural areas competing and urban areas out of the picture, Collins said.

“In a summary, this bill updates the system we currently have and puts the whole state on the path to better viability for attracting and holding jobs here,” he said.

Monday marked the start to the second half of the 2011 legislative session, meaning lawmakers needed to introduce any extensive fiscal legislation that requires time to pass through both chambers.

“The economic development folks have been working on this for many months now, so it’s not a new idea but it’s putting together the formula for change,” Collins said. “In the end, we may see some issues as we go to the rural counties with this, but the bottom line is we’re losing jobs on both ends and we need a better system to incentivize jobs.”

Rep. Ron Stephens, R-Savannah, chairman of the Economic Development and Tourism Committee, sponsored HB 384 with Collins. Stephens also introduced bills Monday that would give additional income tax credits, such as a low-emission vehicle credit.

Two ex-officio members of the House Appropriations Committee started the process of completely revising the state’s tax code.

Rep. Mickey Channell, R-Greensboro, and House Majority Leader Larry O’Neal, R-Bonaire, introduced four versions of a 127-page bill that would implement recommendations from the 2010 Special Council on Tax Reform and Fairness for Georgians.

Channell and O’Neal also presented three constitutional amendments Monday to help back their push for change in the state’s tax structure.

House Resolution 420 would require direct allocation to counties, cities and school systems for taxes on communications services. Under current law, these taxes go into a state general fund and slowly trickle back to communities.

HR 421 would create the Economic Development Trust Fund, which would grant tax credits for job creation and capital investment by qualifying businesses.

In addition, HR 422 would enact general fiscal impact standards for the state. Any bill or resolution that would change tax exemptions or tax credits would be required to comply with the standards.

“They had to introduce these by today for them to go anywhere,” Collins said. “This really begins the process of talking about a tax rewrite, and these focus on the service-based issues of tax collection in moving away from our system of exemptions.”



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