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Thursday, March 22, 2012 - 1:20pm

Tax Reform Heads To Governor

A tax reform plan that would remove an unpopular car tax and the sales tax manufacturers pay on energy unanimously passed the state Senate Thursday. The state House has already passed the measure so it now heads to Governor Nathan Deal, who says he will sign it.

The bill would kill the so-called “birthday tax” and a sales tax that car owners pay. In their place, Georgians would pay a one-time car title fee.

And while manufacturers wouldn’t pay the state sales tax on energy, cities and counties could opt to continue collecting the tax.

Sen. Don Balfour, a Snellville Republican, explains how that would work:

“The folks in the Kia plant will say ‘We already gave away the farm. We gave them a whole bunch of stuff to move here already and now you’re giving them energy and they’re already here'," he said during Senate floor debate. "Well, once we pass this, the city council or the county commission could vote and say, ‘We already gave them the farm so we’re not giving them sales tax on energy, too.’ And they could vote it back in.”

The plan's Republican authors say the energy sales tax exemption will help spur new jobs. But Sen. Steve Henson, a Tucker Democrat, says Georgia manufacturers already pay low taxes. He voted for the measure but says plants have closed across the state for other reasons.

“We’re hoping that this part will create some jobs in Georgia," he said during floor debate. "But I want to point out to each of you and I want the citizens of Georgia to know this is not a master stroke that will revive manufacturing in Georgia.”

Republican lawmakers who unveiled the bill on Monday say they’ve been discussing the plan for two years. But critics say lawmakers rushed the bill through the legislature. And the plan differs sharply from last year’s failed attempt at tax reform, which would have cut the state income tax.