Georgia Special Council on Tax Reform and Fairness Begins Tax Code Review

/PRNewswire/ -- Ryan, the leading tax services firm in North America, with the largest transaction tax practice in the United States and Canada, today announced that the Special Council on Tax Reform and Fairness for Georgians ("Special Council") has begun its review of Georgia's tax code. Initiated by House Bill 1405 ("HB 1405"), which the Georgia Legislature passed earlier this year, the Special Council is tasked with studying Georgia's current revenue sources and base revenue structure. The panel, made up of business representatives, economists, and political leaders, will report findings and recommendations to the Speaker of the House and the Lieutenant Governor by January 10, 2011 when the Georgia Legislature convenes its next regular session.

"I applaud Georgia's legislative leaders for instituting the Special Council," said Georgia Representative Chuck Martin, R-Alpharetta and Ryan Director. "With the full support of the House, Senate, and the Governor's Office, I believe the Special Council's work will effectively generate ideas to positively re-engineer our current system to institute policies that are fair, effective, and geared to today's economy."

The Special Council is expected to look at sales tax, current sales tax exemptions, a possible reduction in income and corporate tax, and the capital gains tax. The review is not expected to consider local property system changes or seek to impact local taxes or tax collections. A special legislative committee called the Special Joint Committee on Georgia Revenue Structure ("Joint Committee") will consider the Special Council's recommendations and will be required to introduce one or more bills in 2011 that reflect those recommendations without significant changes. The Joint Committee would have continuing jurisdiction over those bills during the legislative process.

In reviewing Georgia's tax structure, members said that they intend to compare it to tax structures in other southeast states and states which, like Georgia, have an AAA bond rating. The Special Council does not want to recommend a change that could jeopardize Georgia's bond rating. Economists from the Fiscal Research Center at the Andrew Young School of Policy Studies, Georgia State University have presented the Special Council a summary of Georgia's major state and local government taxes, along with copies of 2009 policy briefs that address the buoyancy of the sales tax, the personal income tax, and the corporate tax.

The Special Council plans to hold a series of public hearings across the state to give the public the opportunity to testify about Georgia's tax system. The hearings are scheduled for August 26th, 30th, and 31st, and September 1st, 2nd, 7th, and 9th. The Special Council has also established a Website at http://fiscalresearch.gsu.edu/taxcouncil/index.htm where information will be posted and interested parties can follow updates and view meeting notes.

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Pelosi: Tax Extenders Act Creates New Jobs, Growth, Innovation, and Opportunity for Every American

/PRNewswire/ -- Speaker Nancy Pelosi released the following statement today after the House passed the Tax Extenders Act of 2009, which will help to create jobs and cut taxes for American middle-class families. The House passed the bill by a vote of 241 to 181.

"Today, Congress took another positive step forward in our drive to create more jobs, strengthen our economy, and lay the foundation for long-term prosperity. By passing the Tax Extenders Act, we are placing our working families at the center of our economic recovery.

"This legislation is good for businesses, good for homeowners, and good for our communities. The bill extends research and development tax credits for American companies, encouraging them to invest in innovation and clean energy, and create the high-tech jobs of the 21st century. It provides property tax relief to 30 million families, ensures our men and women called to serve overseas do not face a pay cut here at home, and offers some security for millions of parents, teachers, and consumers by extending deductions for college tuition, classroom expenses, and state and local sales taxes.

"Maintaining our commitment to fiscal discipline, this legislation will not add to the deficit. The costs of this proposal are fully paid for because we put an end to the preferential tax treatment for hedge fund managers and investment bankers and cracked down on offshore tax havens.

"This bill is a down payment on new jobs, growth, innovation, and opportunity for every American."

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State Government Revenues Fall 16 Percent

/PRNewswire/ -- State governments took in nearly $1.7 trillion in total revenues in fiscal year 2008, a 15.8 percent decrease from 2007, according to new data on state government finances released by the U.S. Census Bureau. The largest share of those revenues came from taxes ($780.7 billion), which made up 46.5 percent. The decline was primarily because of a decrease in insurance trust revenue, which fell by $377.7 billion (72.7 percent).

Insurance trust systems are comprised of public employee retirement systems, the unemployment compensation system, state government workers' compensation programs and other state social insurance trusts.

Total state government expenditures increased 6.2 percent from fiscal year 2007,
totaling slightly more than $1.7 trillion in 2008. Education ($546.8 billion), public welfare
($412.1 billion) and highways ($107.2 billion) represented the top three outlays, accounting for nearly two-thirds of all state government total expenditures.

The findings come from the 2008 Annual Survey of State Government Finances, which includes data on revenues, expenditures, debt, and cash and security holdings for each state, as well as a national level summary. The major source of these finance statistics is the governments' own accounting systems, either directly from a government's own records or through intermediate reporting systems.

Eleven states spent more than 25 percent of total expenditures on public welfare, with Tennessee (32.8 percent), Maine (30.5 percent) and Rhode Island (29.8 percent) spending the highest percentage of their total expenditures.

Public welfare spending is used to support people based on need and includes such items as old-age assistance, temporary assistance for needy families, and commodities and services provided under welfare programs, including medical care or burial services.

Hawaii (11.5 percent), Alabama (10.1 percent) and South Carolina (9.9 percent) led in spending on public health and hospitals as a percentage of total expenditures.

In addition to state taxes, state lotteries were another way many state governments (including Washington, D.C.) raised revenue in 2008. Total state lottery ticket sales reached $77.3 billion in 2008, an increase of 1.8 percent from 2007. Lottery prize payouts represented $56.7 billion in expenditures, a 1.4 percent increase over the previous year. And lottery proceeds represented $18.2 billion in state government revenue, an increase of 2.9 percent. New York ($2.7 billion), Florida ($1.4 billion) and California ($1.2 billion) led the nation in lottery proceeds.

The data used in the tabulations came from state government records. As such, they are not subject to sampling error. Although quality assurance methods were applied to all phases of data collection and processing, the data are subject to nonsampling error, including errors of response and miscoding. For information, visit the Census Bureau's Web site at: http://www.census.gov/govs/www/index.html.

For information on Georgia expenditures, visit http://www.census.gov/govs/state/0811gast.html

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Georgia to Hold Annual ENERGY STAR, WaterSense Sales Tax Holiday

Eligible Products Help Georgians Conserve Energy and Water

To help Georgians conserve energy and water and save money, Georgians will once again have the opportunity to buy energy-saving and water-efficient products without sales taxes during the 2009 ENERGY STAR and WaterSense Sales Tax Holiday this week. The sales tax holiday begins at 12:01 a.m. Thursday, October 1, and runs through midnight Sunday, October 4. Georgians will not pay state or local sales taxes on the purchase of ENERGY STAR-qualified or WaterSense-labeled products that cost $1,500 or less per item.

“Purchasing appliances and products with ENERGY STAR and WaterSense labels helps create a culture of conservation in our state,” said Governor Perdue. “The ENERGY STAR and WaterSense Sales Tax Holiday is a perfect opportunity for Georgians to save money at the cash register and on their water and energy bills.”

This year’s sales tax holiday is a result of House Bill 120, which was sponsored by Rep. Lynn Smith and signed by Governor Perdue into law on May 4. The energy tax holiday is part of the same bill that includes the school supplies tax holiday that occurred in July.

ENERGY STAR designated products meet strict energy efficiency criteria set by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE). Qualified ENERGY STAR appliances and products eligible for the sales tax exemption include dishwashers, clothes washers, air conditioners, ceiling fans, fluorescent light bulbs, dehumidifiers, programmable thermostats, refrigerators, doors, windows and skylights.
“With ENERGY STAR products, Georgians can save money, conserve energy and show their commitment to the stewardship of our state’s natural resources,” said Phil Foil, executive director of the Georgia Environmental Facilities Authority (GEFA).

Many ENERGY STAR qualified appliances use 30 percent less energy than conventional models without sacrificing features, style or comfort. Some products, such as energy efficient compact fluorescent bulbs, save as much as 80 percent. By replacing old, inefficient appliances with ENERGY STAR qualified models, Georgians can help protect the environment while saving money and energy.

For more information and to better understand the options and benefits of ENERGY STAR qualified products, visit the ENERGY STAR @ Home tool at www.energystar.gov.

The EPA created the WaterSense program to recognize major water consuming products that are 20 percent more water-efficient and perform as well as or better than conventional models. WaterSense-labeled products eligible for the sales tax exemption include bathroom sink faucets or aerators and high-efficiency toilets.

“Understanding how much water we use during routine household activities can help us all to be more water efficient,” said Carol A. Couch, director of the Environmental Protection Division of the Georgia Department of Natural Resources. “The WaterSense label makes it easy for consumers to recognize household products that use less water and result in lower water bills.”

According to the EPA, if just one out of every four households in Georgia retrofits their bathrooms with WaterSense-labeled fixtures, it could save nearly 10 billion gallons of water per year. The average household spends as much as $500 per year on its water and sewer bill. By installing WaterSense-labeled fixtures and ENERGY STAR-qualified appliances that use water more efficiently, a household could save about $170.

Visit www.epa.gov/watersense for more information and to better understand the options and benefits of WaterSense qualified products.

Additional information regarding the ENERGY STAR and WaterSense Sales Tax Holiday is also available on the following Web sites:

Georgia Department of Revenue – www.dor.ga.gov;
Georgia Environmental Facilities Authority – www.gefa.org; and
EPD's Conserve Water Georgia – www.conservewatergeorgia.net.
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House Democrat's Health Care Reform Bill Is a 1,018-Page Nightmare

/PRNewswire/ -- The Democrats' health care reform bill currently on the floor of the House of Representatives creates a new government-run health plan that will undercut the private market and force as many as 119 million people to lose their private health insurance and be forced into a Medicare-like plan, according to National Center for Policy Analysis President John C. Goodman.

"Americans who desperately need health care relief won't get it in this bill," said Goodman. "This legislation is going to create a financial and medical nightmare for Americans."

"Of course, members of Congress will be able to hold on to their Cadillac health care plans because this reform won't apply to them," he added.

The bill requires employers to pay the government for health reform - either by purchasing government-approved insurance for their employees, or (more likely) by paying a tax and sending their employees over to the government-run Medicare-like plan.

"This bill has ALL the bad ideas from previous versions, plus a cost of one trillion dollars, and NO long-term solutions that will control costs or improve quality," added Goodman. "This bill contains 1,018 pages of new regulations that will REQUIRE you to buy as much health insurance as the government mandates, even before you buy groceries, gas, or pay your rent. If you don't buy government-approved insurance, you will be taxed."

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Libertarians remind Obama of his “firm pledge” not to tax health care benefits

America’s third largest party Tuesday reminded President Barack Obama that supporting a proposed $246 billion tax on employer-provided health care benefits – a proposal he opposed as “the biggest middle-class tax increase in history” in campaign ads – would break his promise to oppose any form of tax increase on families making less than $250,000 a year.

“In September of 2008, candidate Barack Obama asked Americans to read his lips and that he would oppose any tax increase whatsoever on families making less than $250,000 a year, or any proposal to tax employer-provided health care benefits” said Donny Ferguson, Libertarian National Committee Communications Director. “Now President Obama is prepared to once again break that tax promise by considering a new tax on health benefits, which he admitted last year would be ‘the largest middle-class tax increase in history.’”

Obama has already embraced tax hikes on the middle class through his $1.9 trillion “cap and trade” energy tax and new tobacco taxes and is now considering a proposed European-style “value-added” national sales tax. According to The New York Times, the Congressional Budget Office finds including health benefits in taxable income could mean $246 billion in additional revenue for a single year.

In a Sunday appearance on ABC’s This Week, hosted by former Clinton adviser George Stephanopoulos, White House adviser David Axelrod admitted Obama was considering supporting new taxes on families’ employer-provided benefits. Obama attacked the idea as “the largest middle-class tax increase in history” when it was proposed by Senator John McCain during the 2008 campaign.

“I can make a firm pledge,” then-candidate Obama told a Dover, N.H. crowd, on Sept. 12, 2008. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

The Obama campaign repeated the pledge at other forums. “No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised,” vice-presidential nominee Joe Biden said in the Oct. 2, 2008 vice-presidential debate, “whether it's their capital gains tax, their income tax, investment tax, any tax.”

“Libertarians unequivocally oppose any tax on employer-provided health benefits, and we’ll hold accountable any candidate who supports such a tax hike on families,” said Ferguson. “Once again, the Libertarian Party is the only party standing up for working families. Our health care system needs reform, but massive tax hikes and Obama’s proposed government takeover would simply take the worst aspects of the current system and magnify them.”

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Cap-and-tax slams economy without affecting ‘climate change’

Westmoreland: ‘I have never seen a more economically destructive piece of legislation’

U.S. Rep. Lynn Westmoreland today voted against the “cap-and-tax” bill called the American Clean Energy and Security Act of 2009. The bill, which passed 219-212, essentially implements a national energy tax in an effort to limit greenhouse emissions.

“In all my years in elected office, I’ve never seen the people’s representatives pass a more economically destructive piece of legislation than this,” Westmoreland said. “This cap-and-tax system will dramatically raise the cost of business, raise the costs of products, raise the cost of transportation; it will cost many good-paying jobs while at the same time causing the cost of living to soar for American families – about $3,000 a year more in energy costs for the average family of four.

“The numbers just don’t add up. This is liberal fantasy. We can cut our standard of living to the bone and it’s not going to make a difference when China is building six new coal-fired plants a week and when there’s similar growth in India. In case the leaders in Congress and at the White House haven’t noticed, it’s darn hard to find employment right now and this legislation makes it worse by costing the nation well over a million jobs over the next 35 years. And for what? To cut the global temperature by 1 degree by 2050?

“The businesses that provide jobs to Americans are simply going to relocate to other countries with less stringent standards. This won’t lower global temperature. It’ll simply lower our standard of living and make it harder to find work.”

The plan proposed by House Democrats would cost $864 billion, according to the Congressional Budget Office, a price tag the nation couldn’t afford even it hadn’t spent trillions on a stimulus package, a bloated budget and corporate bailouts.

Georgia would have 82,000 fewer jobs than would be expected and would see a loss of $15 billion in GDP by 2035, according to an analysis by the Heritage Foundation.

“When we talk about the costs of these laws, we talk about billions and trillions,” Westmoreland said. “Those numbers are impossible for people to understand. But Georgians understand what an extra $300 to $400 a month in energy costs will do to their family budgets – it’ll be devastating for many families.”

“Every Democratic ‘energy bill’ increases taxes, increases regulation, hurts businesses, raises the cost of living and increases our dependence on foreign oil,” Westmoreland said. “Our best hope is an ‘all of the above’ energy policy, that increases clean sources such as nuclear, and an investment in continued research into energy alternatives.”

Westmoreland points that even leading Democrats admit this bill will hit American families hard.

President Obama has said, “Under my plan of a cap-and-trade system, electricity rates will necessarily skyrocket.” Obama went on to admit that retrofitting power plants “would cost money and they will pass that money on to consumers.”

Michigan Democrat Rep. John Dingell, the longest-serving House member in history, said during an Energy and Commerce Committee hearing: “Nobody in this country realizes that cap and trade is a tax, and it’s a great big one.”

Sen. Max Baucus: Answer 10 Questions About Mandatory Purchase of Health Insurance Including Why the Public Was Excluded From Today's Committee Meeting

/PRNewswire / -- The U.S. Senate Finance Committee, in closed-door health care discussions today, must answer ten questions about how its plan to require all Americans to show proof of insurance or face tax penalties will provide affordable health care, said Consumer Watchdog.

Questions listed below. Download Consumer Watchdog's letter to Senator Baucus here: http://www.consumerwatchdog.org/resources/BaucusClosedMeeting.pdf

In a letter to Senator Baucus sent today, Consumer Watchdog wrote:

"Americans should not be locked out of any discussion about health care reform, particularly one that will consider whether everyone should be required to buy health insurance policies without any limits on what insurers can charge. Mandatory purchases of private insurance policies without offering a public alternative to the private market is nothing other than a bailout for HMOs -- whose greed, waste and indifference to our health have created the current mess.

"There's no mention of cost-cutting in the Senate Finance Committee's 'policy options' document being discussed in today's closed meeting -- no regulation of HMO premiums, no limits on how much consumers will have to pay out of their own pocket in co-pays or deductibles."

Earlier this week, the Senate Finance Committee circulated a "policy options" white paper to be discussed in today's meeting, which excludes members of the media and public. The senate finance document makes the president's promised "public option" to the private insurance market optional, and does not include cost controls.

Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, has received more campaign contributions from the health insurance and pharmaceutical industries than any other current Democratic member of the House or Senate; the third highest contributions of any member of Congress.

Consumer Watchdog posed the following 10 questions to Senator Baucus, the Senate Finance Committee, and members of Congress about the affordability of the mandatory purchase of insurance policies:

1. Senate rules appear to only allow committees to meet in closed session
under very limited circumstances, including discussions concerning
national defense and protection of trade secrets, none of which appear
to apply to today's meeting. What Senate rule justifies today's
closed-door committee meeting?
2. Why have you offered such deference to the top lobbyists of the
insurance industry, which bears a large share of the responsibility for
the current health care crisis, while locking consumers and consumer
advocates out of the debate?
3. The only guaranteed provision in the "policy options" report is that
every American would have to file proof of an insurance policy with
their tax returns on April 15, 2013 or face tax penalties. How does
threatening Americans with tax penalties lead to affordable health
care?
4. If there are no limits on how much an insurance company can charge for
the coverage that Americans will be required to buy, how can you
promise that it will be affordable?
5. Your policy options do not adequately protect Americans against
low-benefit, junk insurance that fails to provide access to necessary
benefits and does not limit out-of-pocket expenses (co-pays and
deductibles) when patients get sick. How does "owning" an insurance
policy under these circumstances equal being able to get health care?
6. There are documented cases of insured people facing hundreds of
thousands of dollars in unpaid medical bills. Without a cap on
out-of-pocket expenses, how can you prevent this?
7. Your report says that, with few exceptions, hefty tax penalties will be
levied against Americans that don't either purchase coverage or get it
through their job. Is it true that only Christian Scientists would
avoid tax penalties without having to prove their income?
8. One of the options that the committee is considering is to not require
any employers to chip in for health insurance. Why isn't the committee
considering an option where Americans would not be forced to buy
coverage?
9. Your plan focuses on "wellness" services. But if patients face a $5000
deductible how will they pay for treatment for severe obesity, diabetes
prevention, or even effective smoking cessation?
10. Your plan does not clearly protect state laws providing access to
necessary health care services like a California woman's right to
visit an OB-GYN, a New Jersey child's access to a Hepatitis B
inoculation, a Tennessee patient's coverage for diabetes treatment,
and other benefits including screenings for cervical and prostate
cancers. Will states be allowed to require additional health benefits
beyond those required under federal rules, or will federal rules
pre-empt more expansive state benefits?


** Read Consumer Watchdog's letter to President Obama and Sens. Kennedy and Baucus warning them not to agree to agree to the health insurers' plan to gut state health care laws. http://www.consumerwatchdog.org/patients/articles/?storyId=27228

** Read Consumer Watchdog's letter to U.S. Senator Ted Kennedy (D-MA) urging that he continue to protect patients consistent with the principles he has articulated during his 40 year career. http://www.consumerwatchdog.org/patients/articles/?storyId=26398

** Read Consumer Watchdog's analysis of health insurer and drug company contributions to members of Congress. http://www.consumerwatchdog.org/patients/articles/?storyId=25468

** Read about a recent national poll that found that 65% of voters support giving every American of any age the option of joining Medicare; 60% are willing to pay more in payroll deductions for this option. http://www.consumerwatchdog.org/patients/articles/?storyId=24826

** Read about a national poll that found, by contrast, that only 16% of U.S. voters support, and 53% oppose, the insurance industries' plan of requiring every American to provide proof of private health insurance or face tax penalties or other fines. http://www.consumerwatchdog.org/patients/articles/?storyId=24110

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State Fiscal Crisis: Georgia Has a Revenue Problem

The Georgia Budget and Policy Institute (GBPI) released a report today highlighting the fact that state spending is not a driving factor in the projected $2.5 billion budget deficit facing the state in the current fiscal year and possible $1 billion deficit in FY 2010. The report, State Fiscal Crisis: Georgia Has a Revenue Problem, found that the current budget shortfall is due to the combination of a historically weak economy and a declining tax base.

Even before the current economic recession, state revenue collections as a percentage of personal income have declined dramatically. In other words, as Georgians' incomes increased, the state taxes collected from Georgians did not keep pace. The weakening of the tax base has occurred over the past 10 years as Georgia has cut taxes across the board. In addition, the movement from a manufacturing to a service economy and the rise of Internet sales have further weakened the sales tax base. These tax policy decisions and a changing economy have cost the state a minimum of $1.5 billion each year.

Even during the economic recovery between FY 2003 and FY 2008 this inadequate revenue base resulted in $2.4 billion in funding formula austerity cuts and sustained budget reductions for the Board of Education and Board of Regents. In addition, due to funding limitations in Medicaid and PeachCare, the number of uninsured children in Georgia increased, and Georgia was unable to make adequate investments in such areas as a state trauma network, a community mental health system, or services for those with mental and physical disabilities. In fact, Georgia ranks 49th in state spending per capita.

"The inadequate revenue base has resulted in lagging funding for the physical and human infrastructure of the state even during times of economic growth," noted GBPI Executive Director Alan Essig. "In the midst of the current economic recession, revenues are not sufficient to pay for our basic public services, causing deep cuts that will likely worsen in the coming year."

Although revenue collections for the first five months of the fiscal year have shown only a 1.3 percent decline, due to the further weakening of the economy expected throughout calendar year 2009, the Georgia State University Economic Forecasting Center projects a 6 percent revenue decline in the current fiscal year and a 1 percent revenue decline in FY 2010. With Georgia potentially facing a $2.5 billion budget shortfall in the current fiscal year and an additional $1 billion shortfall next fiscal year, new revenues should be part of a balanced deficit reduction package to address this fiscal crisis.

Revenue raising options include:

* Increase cigarette taxes by $1 a pack to raise $450 million.
* Impose a temporary 1 percent surcharge on family income over $400,000 to raise an estimated $225 million. (Would impact less than 1 percent of taxpayers.)
* Reinstate the state estate tax to raise between $100 million and $150 million. (Would impact less than 1 percent of all estates.)
* Lower the cap on various tax credits and exemptions passed during the past two legislative sessions. For example, lower the $50 million cap on the tax credit for student scholarship organization donations to $2 million during the recession.
* Implement an income ceiling on the child care tax credit to save $20 million.
* Create a ceiling on vendor compensation for sales tax collection.

In the long term, Georgia needs to undertake fundamental tax reform and modernization that addresses the question: How do we fairly and equitably raise the funds necessary to provide the quality public services and infrastructure that Georgians demand? Such tax reform and modernization should include:

* Create a tax break budget to increase transparency and accountability for tax breaks. Like 39 other states, Georgia needs a tax break budget to detail the costs and benefits of tax breaks. A tax break budget would provide data that legislators and the public need to weigh Georgia's spending options.
* Eliminate unnecessary and ineffective tax breaks based on data gathered from a tax break budget.
* Expand the sales tax to cover some household services. The change from a manufacturing to a service economy and the rise of Internet sales have weakened the sales tax base. Broadening the sales tax to cover some services would help strengthen this declining revenue base.
* Modernize the income tax structure to the 21st century. The income tax has been relatively unchanged since the 1930's. The income tax should be modernized through increasing the standard deductions, broadening the tax brackets, establishing a new top income tax rate, and implementing a state Earned Income Tax Credit.

"Revenue increases as part of a balanced deficit reduction package would be more beneficial to the economy than budget cuts alone. In the long term, fundamental tax reform and modernization would allow Georgia to make the investments in the human and physical infrastructure of the state that is necessary for Georgia to prosper," said Essig.

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Obama Struggles to Explain Drop of Windfall Profits Tax for Oil and Gas Industry

Barack Obama may already be losing credibility over his explanation as to why he dropped the windfall profits tax on the oil and gas industry from his administration's agenda. During his campaign, President-elect Obama promised to enact a windfall profits tax on the oil and gas industry, which would help finance a $1,000 emergency energy rebate for American families.....More

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Amendment Vote Linked to Georgia Environment

Georgia voters will make an important decision regarding forest land and the environment on Tuesday, November 4. Georgians will cast ballots on Amendment #1, the “Georgia Forest Land Protection Act of 2008,” which asks voters whether the state Constitution should be amended to allow timberland taxation on the basis of its actual value as a forest, rather than its potential or speculative future use.

“As land values have increased, property taxes have risen to the point where many landowners are forced to decide whether it makes economic sense to keep their land in forests or sell it for development,” explained Lauren Bush, Public Affairs Staff Forester with the Georgia Forestry Commission. “Amendment #1 encourages landowners to keep their land in forests rather than sell it to developers.”

Georgia boasts approximately 24 million acres of forest land, 92% of which is privately owned. The forest industry contributes $28.5 billion to our state’s economy, and provides invaluable nature services to Georgia, including clean water, clean air, wildlife habitat and recreation opportunities. The Georgia Forestry Commission provides leadership, service, and education in the protection and conservation of the state’s forest resources.

“Forest management is a long-term commitment for landowners,” said Bush. “They may not receive a return on their investment for 20 or more years, but their property taxes are due every year. Amendment #1 can help encourage property owners to keep their land in forests, which enhance the life of every Georgian.”

To receive the forest value assessment, Amendment #1 requires forest land owners to leave their land in tree production for at least 15 years. If a county’s total tax digest of revenue is reduced by more than three percent, the money will be reimbursed by the State of Georgia. If it is affected by three percent or less, the county will be reimbursed 50%.

If ratified by Georgia voters on the November 4 General Election ballot, the Forest Land Protection Act will go into effect on January 1, 2009.

For more information, visit GaTrees.org, www.forourforests.com or www.keepgeorgiagreen.org.

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Americans Face Greater Difficulty Seeking Tax Relief as IRS Continues Push for Tax Compliance During Economic Downturn

PRNewswire/ -- Amid the slow economy and increasing federal deficit, a much needed surge in tax revenue means that a growing number of taxpayers can expect to be audited while Americans already burdened by tax debt will find it harder than ever to resolve their IRS tax problems.

In fiscal year 2007, IRS audit rates were up from the previous year for individuals overall. Additionally, audits of S Corporations were up 26% and audits of partnerships increased almost 25% from 2006.

According to tax expert Michael Rozbruch, the IRS will continue to increase audits of corporations, partnerships and individuals. And if you do receive an audit letter, you should respond strategically and by the deadline in order to avoid being placed in the collection department.

"If the IRS garnishes your wages, they can take as much as 75% of your net pay and make you live on $168 a week," said Rozbruch, founder and CEO of Tax Resolution Services, a company that provides affordable solutions to people with IRS problems. "The IRS is the most brutal collection agency on the planet."

While taxpayers can expect renewed IRS compliance efforts, the national credit crisis will make it even more difficult for Americans to pay their taxes. But Americans who anticipate having problems with their taxes should know that there are ways to work with the IRS.

"Not filing your taxes is the worst thing you can do because you can incur a 25% failure to file penalty right off the bat," Rozbruch said. "What you need to do is start lining up expert tax representation to help negotiate a payment plan or an offer in compromise on your behalf."

Tax Resolution Services is dedicated to providing affordable solutions to businesses and individuals alike who find themselves in trouble with the IRS. The tax experts at TRS have a success rate of 90% -- second to none in the industry -- and an Offer in Compromise Settlement Rate of $0.13 on the dollar. For more information or to receive a FREE tax relief consultation, visit http://www.taxresolution.com/ or call (818) 774-1813.

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Conference Examines State Tax Policy Proposals September 11

Towards a Better Understanding of Property Taxes & Proposed Policies
8:30 a.m. to 3 p.m. Sept. 11, 2008
Capitol Education Center, 180 Central Avenue, Atlanta, GA

When lawmakers convene for the 2009 session of the Georgia General Assembly in January, a number of new tax proposals could be on the table, including limits on levies and caps on assessment increases.

To wade through the proposals, and the current landscape of current Georgia tax policy, the Fiscal Research Center at Georgia State University will hold a conference on the property tax as it exists, and the likely effects of changes under consideration.

“Towards a Better Understanding of Property Taxes & Proposed Policies” will be held from 8:30 a.m. to 3 p.m. Sept. 11 at the Capitol Education Center, 180 Central Ave., Atlanta.

Including presentations from officials from Georgia’s Department of Revenue and economic experts from states that have implemented assessment limits and levy caps, Fiscal Research Center Director Dave Sjoquist said the seminar will provide objective information to lawmakers, local elected officials and fiscal policy watchers.

“People will have a much better understanding of how the property tax works and have information on these two policies and the consequences they might have for Georgia,” he said.
The Fiscal Research Center, housed in the Andrew Young School of Policy Studies at Georgia State, is a nonpartisan fiscal policy and education center which provides technical assistance and information to state and local governments.

Vicki Lambert, director of the Local Government Services division of the state revenue department, will give an overview of the current Georgia tax structure. Sjoquist will discuss options for reducing and controlling property taxes.

Mark Haveman, executive director of the Minnesota Taxpayers Association, will discuss property tax limitations, how they’re structured and their effects on local governments. Experts from Colorado, Michigan and Florida will discuss their states’ experiences with assessment limits and levy caps.

For more information about the conference, visit http://frcconference.gsu.edu/.

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United States and Cities Fare Well in a KPMG Report on Business Tax Costs

PRNewswire/ -- San Juan, Puerto Rico, Baltimore and Atlanta have the most favorable tax structures for businesses among U.S. cities/locations with populations exceeding 2 million, according to a study released today by KPMG International (KPMG).

Of the 35 large international cities highlighted in the study, San Juan, Baltimore and Atlanta all rank in the top ten -- first, eighth and ninth, respectively. And among the 10 countries in the study, the U.S. ranked fifth in terms of the favorability of its overall tax structure for business.

KPMG's 2008 Competitive Alternatives: Focus on Tax study is a global comparison of the total tax burden that may be faced by companies in 102 cities throughout 10 countries including corporate income taxes, capital taxes, sales taxes, property taxes, miscellaneous local business taxes and statutory labor costs. The study is intended to provide a guide for companies wanting to compare the tax burden they may incur in different cities around the world.

"Cities across the United States recognize that attracting and retaining businesses of all sizes is important for a vibrant local economy," said Hartley Powell, national leader of the Strategic Relocation and Expansion Services practice at KPMG LLP, the U.S. member firm of KPMG International. "As the survey results indicate, certain cities are leaders in developing a tax environment that encourages business development, and tax costs are a key consideration in the site selection process."

According to the study, San Juan had a total tax index of 46.6 representing tax costs 53.4 percent below the U.S. national average of 100.0. San Juan was followed by Baltimore and Atlanta at 92.1 and 95.1, respectively.

Other high-ranking large U.S. cities included Tampa, Fla. (98.1), Detroit (98.6), and Phoenix (98.8).

Industry Classifications

The results of the study also vary depending on the type of business. As a location for R&D operations, the three cities with the most cost-effective tax structure in the large-sized city category were San Juan (61.8), Baltimore (88.4), and Portland, Ore. (88.5).

For manufacturing operations, where property taxes and taxes on equipment and capital are of interest, the three, large-sized U.S. cities with the most cost effective tax structure were San Juan (42.4), Baltimore (91.3), and Atlanta (95.3).

The services industry, on the other hand, tends to be most affected by statutory labor costs. The top three, large-sized U.S. cities with the most favorable tax structure for services included San Juan (65.5), Atlanta (92.7) and Baltimore (94.2).

Mid-sized Cities

In the mid-sized city category (populations between 500,000 and 2 million), the top cities included Omaha, Neb. (94.2), Greenville-Spartanburg, S.C. (95.2), Little Rock, Ark. (95.7), Milwaukee, Wis. (96.0), Youngstown, Ohio (97.1), Raleigh, N.C. (98.1), McAllen, Texas (98.5), Buffalo, N.Y. (98.9), and Salt Lake City, Utah (99.1).

Small-Sized Cities

In the small-sized city category (populations between 100,000 and 500,000), the top cities included Saginaw, Mich. (92.0), Cheyenne, Wyo. (92.1), Cedar Rapids, Iowa (92.1), Sioux Falls, S.D. (92.8), Shreveport, La. (92.9), Lexington, Ky. (93.0), and Montgomery, Ala. (95.2).

The full text of the 2008 study by KPMG International is available online at www.CompetitiveAlternatives.com.

The total tax index is a measure of the total taxes paid by corporations in a particular location and industry, expressed as a percentage of total taxes paid by similar corporations in the United States. Thus the United States has a total tax index of 100.0, which represents the benchmark against which the other countries and cities are scored.

City’s July 2008 Tax Payment 14% Lower than July 2007

The City of Atlanta just received the July 2008 sales tax payment in the amount of $8,334,041.43.The sales tax payment for July 2007 was $9,682,507.41. This is a decrease of 14% from last year. Because this is such a large decrease, it will cause us to monitor our sales tax revenues closely and be even more conservative with our financial planning.

Tax-Free Holiday, Sales Combine for Big Savings

Chances are your child will need clothes, school supplies and maybe even a computer before the school year rolls around. To lessen the budgetary blow, purchase these items during Georgia’s Back-to-School Sales Tax Holiday, says a financial expert with the University of Georgia.
The holiday will be July 31 - Aug. 3. During this tax-free window certain purchases will be exempt from state and local sales taxes. Clothing, personal computers and accessories and school supplies are on the tax-free list.

Clothing, including shoes, is exempt from sales tax as long as the item costs $100 or less. Jewelry, watches or watchbands, eye wear, handbags and umbrellas are not exempt.

For computers and accessories for personal use, the tax-free limit is $1,500 for a single purchase. UGA Cooperative Extension consumer economics specialist Michael Rupured urges consumers to take a tally of their computer-related items before heading to the register.

“If the purchase exceeds $1,500, the entire purchase is not exempt from the sales tax,” he said. “Aside from that limitation, practically anything needed to setup and operate a computer at home is exempt.”

To avoid missing out on the tax break, Rupured suggests purchasing computer hardware at one store and software and other accessories at another. And, before you make any computer purchase, do a little window shopping to see which retailer offers the best bargain.

School supplies up to $20 per item are also exempt from the sales tax during the holiday. Make a list of the school supplies your child will need to avoid making unnecessary purchases.

Saving 6 or 7 percent on purchases may not sound like much, but coupling this break with retail sales can result in a substantial savings, he said.

“Do a little research and check advertisements and fliers for sales,” Rupured said. “The sales-tax holiday has become so big now that most retailers offer big sales to attract more business.”

Don’t bring your children along for the shopping excursion, unless you are purchasing their clothes.

“Most of the time you’ll spend less without the kids around,” he said. “Go out by yourself to purchase school supplies and computers and accessories. While you are out, make note of any particularly good clothing sales and return to those stores later during the holiday with the kids.”

The tax-free holidays are designed to help Georgians save, not spend, money. Rupured discourages consumers from buying items on credit during the tax-free days.

“Unless you pay the balance in full with each statement, the interest you pay on a credit card balance can be high enough to offset any savings,” he said. “To avoid temptation, leave your credit cards at home.”

For an entire list of which items will and will not be exempt during the tax holiday, see the Georgia Department of Revenue Web site at www.etax.dor.ga.gov/.

By Sharon Omahen
University of Georgia

Sharon Omahen is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.

Sen. Seabaugh Appointed to Senate Local Tax Collection Study Committee

State Senator Mitch Seabaugh (R-Sharpsburg) has recently been appointed by Lieutenant Governor Casey Cagle to serve as a member on the Senate Local Sales Tax Collection Study Committee. Sen. Seabaugh will work with a group of eight committee members, consisting of fellow legislators and local officials from across Georgia to examine the tax collection rates of cities and counties.

“As costs are sharply rising throughout the economy, many families and individuals are struggling financially,” Sen. Seabaugh said. “My goal for this study committee is to find ways for local governments to cut costs to taxpayers by allowing them to choose how their taxes are collected.”

Currently under Georgia law, the state revenue commissioner collects local sales and use taxes on behalf of cities and counties, and subsequently charges them one percent of the amount collected, regardless of the total cost of collection. The study committee will look for ways for local governments to individually determine how their taxes will be collected, so that they could be charged a lower rate than the one percent charged by the state.

“Senator Seabaugh will be a valuable asset to the Local Sales Tax Study Committee,” said Lt. Gov. Cagle. “He is dedicated to his constituents and has worked diligently in the Senate. I look forward to learning more about the findings of this study committee.”

Gwinnett Lowers Property Tax Rate

Gwinnett County again lowered its portion of the property tax rate slightly on Tuesday, reducing their portion of property taxes for the typical homeowner by about one percent. The County’s portion of the new overall tax rate will decrease from 11.08 mills to 10.97. Its portion has decreased 27 percent since 1996. The only increase in that time came from a voter-approved bond issue to expand the Pre-Trial Detention Center.

“These reductions reflect the Board of Commissioner’s decisions to rollback the millage rate to offset increased revenue from required reassessments of property,” said Financial Services Deputy Director Maria Woods.

This year, Gwinnett County government’s share will be 34.5 percent of the total property tax bill while the school board’s is 64.7 percent and the state’s is 0.8 percent.

State of Georgia's Revenue Collecctions for May 2008 Cause Concerns

State of Georgia's Revenue Collections for May 2008 Cause Concerns: Governor Should Appoint Commission to Study Revenue Structure

The latest Georgia revenue figures released by the Department of Revenue show that revenues have declined by 0.1 percent through the first 11 months of the fiscal year. The Governor's FY 2008 revenue estimate is based on revenue growth of 2.7 percent. If revenue growth remains flat in June, the FY 2008 Georgia budget will be facing a $500 to $600 million shortfall.

"Because of the Governor's wise fiscal management over the past four years, the state has healthy reserve funds. These reserves put the Governor in a position to manage the economically driven revenue shortfalls without cutting vital government services," said Alan Essig, the executive director of the Georgia Budget and Policy Institute. The Revenue Shortfall Reserve (RSR) contains over $1.5 billion. If revenues remain sluggish throughout FY 2009, it is expected that almost all of the $1.5 billion of reserve funds would be needed to cover budget shortfalls.

"The continued revenue slowdown highlights the fiscal irresponsibility of those legislative leaders who proposed significant tax cuts this past legislative session. Along with this slowdown, there are continued needs, such as trauma care, full education funding, the mental health system, and health insurance for children who are eligible but not enrolled in Medicaid and PeachCare. In light of legislators wasting time with politically motivated tax cut rhetoric, the Governor should take the responsible action of establishing a blue ribbon commission to study the revenue and budget realities of Georgia," Essig concluded.

City of Atlanta Budget Update

On Friday, May 31, 2008, the updated Fulton County 2008 tax digest was distributed. The digest indicates that a combination of increased growth and tax reassessments will require a smaller property tax increase to close our 2009 estimated budget gap. Department of Finance analysis of the digest allows the administration to conclude that only 0.43 mill over 2007 tax millage will close the anticipated gap of $40 million.

The new millage rate translates into a $7.31 tax increase for a $100,000 home, a $24.51 increase for a $200,000 home, and a $41.71 increase for a $300,000 home. Table attached.

Since FY 2002 the millage rate has dropped by 1.51 mills from 10.86 to 9.35 as proposed in the administration’s FY 2009 General Fund Budget.

In the FY 2009 General Fund Budget we proposed four ways to eliminate the estimated $140 million FY 2009 budget shortfall including: reducing expenditures by creating work efficiencies and improved business practices, adopting budget policies that will allow for higher revenue anticipations, increasing revenue through adjustments in existing fees, and increasing property tax revenues. Our emphasis has been on reducing costs, but we knew it was not possible to solely rely on spending cuts. Even with these measures, we expect a $40 million shortfall that we proposed to close by a minimal tax increase for FY 2009 over FY 2008.

NOTE:

About the City of Atlanta Property Tax

An Atlanta property tax bill consists of taxes levied by each of the following entities: The State of Georgia, Fulton County (or DeKalb County), Atlanta Public Schools, and the City of Atlanta. It’s important to note that the City of Atlanta’s property taxes account for less than one-quarter (25%) of the total annual bill.

Calculating the City’s Property Tax

The formula used to calculate a rate payer’s property taxes owed is the Assessed Property Value (calculated at 40% of fair market value) minus exemptions (Basic Homestead, etc.) multiplied by the millage rate.