Tax breaks would have $445 million impact on state revenues

[private]The various tax breaks still under consideration in the General Assembly would reduce state revenues by $445 million over the next five years if they become law, according to estimates compiled by the Georgia Budget & Policy Institute (GBPI).

GBPI tracks the tax bills introduced in the Legislature each year and bases its estimates of the financial impact on the fiscal notes that accompany the bills.

“A skeptical approach (by lawmakers) is appropriate, considering state revenue collections in February 2017 came in 5.6 percent lower than in the same period last year — an unusually large drop for months in non-recession years,” GBPI analyst Wesley Tharpe said.

After the crossover day deadline, there are 12 bills still in play that provide direct tax breaks, four bills that would restructure parts of the state’s tax system with a fiscal impact of $20 million, and “two additional bills (that) pose some nuanced revenue implications for both state and local lawmakers,” Tharpe said.

The tax break bills include:

HB 59 — expands income tax credit for rehabilitation of historic commercial buildings. Tax impact over five years: $164.1 million.

HB 73 — New income tax credit for Main Street revitalization. Tax impact over five years: $12.3 million.

HB 125 — Partial sales tax exemption for yachts. Tax impact over five years: $5.9 million.

HB 155 — New income tax credit for music business. Tax impact over five years: $45 million.

HB 196 — New income tax exemption for royalties earned by musicians. Tax impact over five years: $20.7 million.

HB 199 — Expands income tax credit for film and gaming companies. Tax impact over five years: $97.5 million.

HB 217 — Expands income tax credit for private school scholarships. Tax impact over five years: $28.5 million.

HB 237 — New income tax credit for donations to public schools. Tax impact over five years: $28 million.

HB 247 — Adds concrete companies to sales tax exemption for manufacturers. Tax impact over five years: $3.6 million.

HB 265 — Expands Quality Jobs income tax credit, enacts sales tax break for Woodruff Arts Center. Tax impact over five years: $8.5 million.

HB 301 — Converts income tax deduction for volunteer medical personnel into a credit. Tax impact over five years: $14.2 million.

HB 314 — New tax credit for financial intermediaries that invest in rural businesses. Tax impact over five years: $16.9 million.

The tax restructuring bills include:

HB 118 — Regulate, tax fantasy sports biz. Tax impact over five years: increase state revenues by $3.2 million.

SB 133 — Reduce corporate net worth tax. Tax impact over five years: reduce state revenues by $18.7 million.

HB 225 — Apply sales tax to Uber, Lyft rideshare services. Tax impact over five years: increase state revenues by $34.3 million.

HB 329 — Change state income tax rate to a flat 5.4 percent and other revisions. Tax impact over five years: reduce state revenues by $39 million.

© 2017 by The Georgia Report

[/private]

Tags: state revenues , tax breaks