As I have said before, this is a vital issue for all Georgians and a modernized, flatter, fairer, clearer tax reform must be passed during this session to avoid missing an opportunity to restore jobs to Georgians and vitality to our economy.
Today I joined with House and Senate leadership to announce a viable tax reform plan that will be amended into House Bill 388, which is currently in the Special Joint Committee on Georgia Revenue Structure. The legislation will create a flat 4.6 percent individual income tax rate beginning in 2012. This will amount to a 23 percent tax cut from the current top rate of 6 percent.
This is a historic time for tax reform in Georgia. This legislation will save Georgia tax payers $128 million dollars in the first year alone and $200 million over a span of 3 years.
After countless months, weeks, days, and hours, we have finally reached a comprehensive, forward-thinking proposal that will benefit our citizens and our communities. Furthermore, the modernization of our tax code, as presented in this bill, will mean overall tax cuts and substantial economic growth for Georgians.
Additionally, HB 388 will initiate a three year phase out of Georgia's sales tax on energy used by manufacturers throughout the state. Eliminating this sales tax will immediately make our traditional manufacturing industries more competitive as the state continues competing to bring jobs to Georgia and keep the ones we currently have.
The new tax reform will consolidate the state's current agricultural exemptions into one simple exemption that enhances fairness and equity among agriculture producers.
HB 388 will modernize Georgia's communication tax structure by creating a uniform communications services tax that treats all service providers the same. Specifically, the plan would replace the patchwork of multiple taxes and fees currently charged at the state and local level with a single, uniform 7 percent tax on the retail sale of communications services.
As we take these vital steps forward, this tax reform plan will bring Georgia in line with the 44 other states who tax the casual sale of vehicles. By eliminating this exemption, the General Assembly will close a loophole exploited by certain unscrupulous used car dealers.
Finally, this plan will also allow the state to join the 21 other states, including Florida and Tennessee, that tax labor on automobile repair as well as the parts used in auto repair, which Georgia already taxes.
This important tax reform legislation is a product of the combined efforts of the Special Joint Committee on Georgia Revenue Structure as well as the Special Council on Tax Reform and Fairness for Georgians. Both groups were created by House Bill 1405, which was signed into law on June 1, 2010.
The Special Council on Tax Reform and Fairness for Georgians was entrusted with conducting a detailed study of the state's current revenue structure.
The Council conducted this research through a series of public meetings and public hearings throughout the state of Georgia from July through December of last year.
During these public hearings, members of the Council gathered public input on how best to reform the state's tax code to more fairly serve Georgians. The Council then submitted its findings and recommendations for changes to the state's tax code to the legislature at the beginning of the 2011 legislative session.
The Tax Council's submitted findings have now been thoroughly examined by the Special Joint Committee on Georgia Revenue Structure.
This joint committee, co-chaired by Rep. Mickey Channell and myself, is comprised of both House and Senate members and has worked over the last three months to craft the Council's recommendations into meaningful legislation, which ultimately became HB 388. As stipulated under last year's HB 1405, HB 388 will go through the legislative process and receive an up or down vote by the House followed by a vote in the Senate.
As we approach the final days of the legislative session, I will continue to be devoted to Georgians as the chairman of the Senate Finance Committee and as Co-Chair of the Joint Committee on Georgia Revenue Structure. While we have made significant advancements for our state in these areas, I remain dedicated to all issues that affect the citizens of the 31st district. Please don't hesitate to let me know your thoughts on tax reform in Georgia, or any other issue you feel is vital to our state.