I just received a call to action from the Georgia State Bar regarding Speaker Glenn Richardson's proposal for a constitutional amendment to repeal the collection of certain property taxes and to replace that revenue stream with an additional sales and use tax, this time on services. It has been hotly contested, in the newspapers, blogs, and other local media, throughout the fall.
Now, the House Ways & Means Committee has favorably reported HR 1246 and HB 979.
According to the email from the Georgia Bar, they oppose the new sales and use tax on services because it would interfere with the attorney-client relationship. (In some instances, just the fact that an attorney represents a certain client can be privileged information.) The Georgia Department of Revenue would have the ability, under its audit authority, to have access to a list containing the clients names and the fees paid. Additionally, businesses would be exempt from this tax, so only individuals seeking legal assistance would have to pay the sales tax. This is clearly a disparate treatment and could cause challenges to its constitutionality.
My practice is mostly geared to small businesses and their owners. Think about this from their perspective. Many of my clients will come to me for several issues, both personal and professional. For their company, I will write a buy-sell agreement or succession plan that has many estate plan implications. I will then write their Last Will and Testament and the rest of their estate plan. Part of their legal services will have a sales tax while the remaining part will not. There will be incentives for attorneys and clients to mis-categorize certain legal services in order to avoid the additional tax.
Think about what this will do for you and your attorney. Increased record keeping. More difficult and harder to understand bills. Increased costs for the individual consumers.
This tax does not apply just to your attorneys. It would also apply to many of the professionals that you see on a constant basis, including accountants and CPAs, dry cleaners, beauty technicians (nail, hair, massage), consultants, interior designers, doctors, dentists, and many more.
In addition to the burden on the professionals, remember that you pay your property taxes directly to your county, not the State. This proposed regime would remove almost all of a county's revenue collection authority and place it in the hands of the state government. Under the sales and use tax regime, all the sales and use taxes are paid to the State who then distributes the collected sales taxes to the individual counties. There is at least one current battle going on between a county and the state over the amount of sales tax that should be paid to the county. The State has also been known to rob one portion of its budget to pay for another portion of its budget. With the State handling the collection of sales tax instead of the county handling the property tax, do not be surprised if money would get cut off from the schools to fund another project, perhaps roads, water management, or public buildings or parks.
This is not a good deal for Georgia taxpayers, the counties, or the professionals that you deal with on a constant basis.
Showing posts with label Sales Tax. Show all posts
Showing posts with label Sales Tax. Show all posts
Tuesday, February 26, 2008
Friday, February 8, 2008
Florida Joins Clemson, Auburn on Georgia Roadways
The University of Florida is joining the ranks of Clemson University and Auburn University as the only out-of-state colleges with Georgia license vanity plates.
Hopefully, the Gator faithful can help defray the impact of the reduced state tax collections. In January, tax collections were down 7.1% or about $140 million from a year ago. Sales and income taxes account for the majority of the State's tax revenues. If tax collections do not increase, then the state could be looking at not being able to meet its budget for the fiscal year. The budget is approximately $20 billion for the fiscal year July 1, 2007 - June 30, 2008.
Hopefully, the Gator faithful can help defray the impact of the reduced state tax collections. In January, tax collections were down 7.1% or about $140 million from a year ago. Sales and income taxes account for the majority of the State's tax revenues. If tax collections do not increase, then the state could be looking at not being able to meet its budget for the fiscal year. The budget is approximately $20 billion for the fiscal year July 1, 2007 - June 30, 2008.
Thursday, October 11, 2007
Sales Taxes for Service Businesses?
In case you have not been following the news coverage on Georgia's Speaker of the House Rep. Glenn Richardson's tax reform bill, here is a rundown.
In other words, Richardson wants to do away with property taxes and tax services at 4%. However, I can see counties doing the same thing to services that they have done to the sale of goods - every county has added to that base 4% - not to mention occupancy taxes where most counties and/or local municipalities have added another 5-8% tax on hotel stays in addition to sales taxes. Some of the news articles even hint at this possibility.
Georgia General Assembly - Summary of Bill
Americus Times-Recorder - Positive net gain for Georgia since tourism is the second largest industry, demand for services will not change, but demand for land ownership will go up and help landowners, particularly farmers, reduce the cost of business.
Augusta Chronicle - Some are worried that it will hit low- and middle-income people the most, the ones that do not own land.
Augusta Chronicle - The change would hurt businesses, as most outsource at least some of their services (accounting, legal, janitorial), and this additional cost is passed on to the consumer.
The Brunswick News - Some are pointing out that it would help the housing markets not to have property taxes.
And from other Georgia Blogs...
Safe As Houses talks about the property tax deduction that you will have to forego on your federal income tax return.
Tondee's Tavern opposes the bill because it will hurt Georgia businesses, particularly ones near one of the state borders.
| A RESOLUTION proposing an amendment to the Constitution so as to provide for the comprehensive revision of provisions regarding taxation and finance and abolish most state and local taxes; to provide for a comprehensive flat tax to be known as the fair tax; to provide for procedures, conditions, and limitations; to provide for local revenue guarantee proceeds; to provide for applicability of prior tax provisions; to change certain provisions regarding certain defaulters; to change certain provisions regarding specific powers and limitations of powers of the General Assembly; to change certain provisions regarding other or supplementary appropriations; to change certain provisions regarding appropriations; to eliminate certain provisions regarding the motor fuel tax; to provide for the submission of this amendment for ratification or rejection; and for other purposes. |
In other words, Richardson wants to do away with property taxes and tax services at 4%. However, I can see counties doing the same thing to services that they have done to the sale of goods - every county has added to that base 4% - not to mention occupancy taxes where most counties and/or local municipalities have added another 5-8% tax on hotel stays in addition to sales taxes. Some of the news articles even hint at this possibility.
Georgia General Assembly - Summary of Bill
Americus Times-Recorder - Positive net gain for Georgia since tourism is the second largest industry, demand for services will not change, but demand for land ownership will go up and help landowners, particularly farmers, reduce the cost of business.
Augusta Chronicle - Some are worried that it will hit low- and middle-income people the most, the ones that do not own land.
Augusta Chronicle - The change would hurt businesses, as most outsource at least some of their services (accounting, legal, janitorial), and this additional cost is passed on to the consumer.
The Brunswick News - Some are pointing out that it would help the housing markets not to have property taxes.
And from other Georgia Blogs...
Safe As Houses talks about the property tax deduction that you will have to forego on your federal income tax return.
Tondee's Tavern opposes the bill because it will hurt Georgia businesses, particularly ones near one of the state borders.
Tuesday, October 2, 2007
Sales Tax Holiday Reminder
This is a friendly reminder to you that this weekend is the second sales tax holiday of the fall for Georgia retailers. This sales tax holiday is for energy efficient appliances and products. For more information, visit the Georgia Department of Revenue website.
Stock up on those fluorescent light bulbs now.
Stock up on those fluorescent light bulbs now.
Thursday, August 23, 2007
Some of This and That...
There's a lot of news making headlines in the legal and business communities today, so here it is in a nutshell.
Alpharetta: Alpharetta, Georgia, based Cratos Capital Partners LLC is opening an office in Chicago. This is the first office Cratos will open in the Midwest; Bradley Byrd was named director to oversee business development in the Midwest. The Atlanta Business Chronicle has a short story on it.
Atlanta:
According to Jim Galloway, expect the Georgia legislature, the NRA, and the Brady Center to go at it again soon. The issue is over whether employees should have the right to keep firearms in cars parked on company premises during work hours. Expect good entertainment when the issue hits the floor. See the Political Insider.
Atlanta City Councilman C.T. Martin has proposed an amendment to city indecency ordinances. The new ordinance would target young men with saggy pants and women who show a thong under their pants, wear jogging bras in public, or show "even the wisp" of a bra strap. The "local newspaper" and Yahoo! News have the story.
The Atlanta Regional Commission is seeking control of the money raised through the proposed one cent sales tax currently under consideration by the state legislature. The proposed tax is predicted to raise $1.1 billion in the affected 10-county metro area by the year 2030. The Atlanta Business Chronicle and the "local newspaper" have the story on the ARC
Augusta:
The Augusta Commission approved a new $20 million trade, exhibit and event center for conventions and trade shows. This comes two years after the voters approved it. Once opened, it is expected to provide $1.4 million to the city in tax revenues and have about a $25 million impact on the local economy. To help fund the center, the city hotels will be charging an extra $1 hotel occupancy fee.
Former Burke County Magistrate Court deputy clerk Nicole Hammock has been charged with racketerring and stealing more than $21,000 from the county as people paid fines, fees, and court costs. The Augusta Chronicle has the full story.
Dunwoody: The Ashford Alliance Community Association inquired to DeKalb County when it saw a sign go up for a pawn shop at the intersection of Ashford Dunwoody and Johnson Ferry. They determined that the area was zoned C-1, while pawn shops have to be in C-2, in areas such as Buford Highway or Peachtree Industrial. That area is undergoing quite a bit of change as a new Bat and Ball Pub is set to go into that shopping cneter, a new Pizza Corner restaurant is set to open across the street, and a mixed-use project is replacing public housing. The Dunwoody Crier has more information.
Norcross: Advanced Disposal Services is trying to build a transfer station on Button Gwinnett Drive, their third attempt to build a transfer station in Gwinnett County. This time, OFS, a fiber-optics company, is fighting the transfer station, saying that it could sink their plans for the area's redevelopment. The Gwinnett Daily Post has the story.
Georgia:
Pecan farmers are happy thus far with the expected pecan crop, although they are worried about any big storms or hurricanes that could damage the trees or blow the fruit off the trees. The hot and dry weather has even helped them avoid many of the problems relating to disease and insects. The story is at Gainesville Times.
The Small Business Administration announced that federal disaster loans are available to small businesses and small agricultural cooperatives located in Georgia, except Chattahoochee and Muscogee counties. The SBA notice declaring most of Georgia as an economic injury disaster is available (PDF). Information about the loans and other disaster relief is available from the SBA website.
Beazer Homes USA, Inc. recently delayed its fiscal third-quarter filing because it discovered "accounting irregularities." This delay puts into issue whether that is a default under many of the bonds and other loans worth about $1.38 billion. The company filed in U.S. District Court to stop creditors from forcing the company to repay this amount under the default provisions. The Columbus Ledger and Atlanta Business Chronicle have more.
When HomeBanc laid off more than 900 workers when it declared bankruptcy, it came as a surprise to many of those workers and made them very unhappy. Now, three of them have joined in a class-action lawsuit, filed Tuesday in the U.S. Bankruptcy Court in Wilmington, Delaware, where the HomeBanc bankruptcy proceeding is taking place. The workers are claiming that the layoff violated employee rights under the Woerk Adjustment and Retraining Notification Act which requires 60 days advance written notice before conducting widespread layoffs. Workers from American Home Mortgage Investment Corp filed a similar lawsuit on August 9 when their company went into bankruptcy. More available from Columbus Ledger.
Elsewhere:
New York has passed a new law that prevents knockoff music acts from impersonating the real thing. This new law does not prevent "tribute" or "salute" bands, nor those that have at least one member of the recording group in it. See the Daily Report for more information.
Countrywide Home Loans promised to repurchase some loans it sold to investors if the homeowners got into financial difficulty. But Countrywide is in a dubious financial situation right now; Bank of America agreed to invest $2 billion into the troubled company. More available from the New York Times
In the past nine months, about 120 mortgage lenders have closed or declared bankruptcy. About 40,000 workers have lost jobs since the beginning of the year. See Yahoo! News.
Bank of America, Citigroup, JP Morgan, and Wachovia each borrowed $500 million from the Federal Reserve Bank of New York, just days after the rate and collateral standards were lowered. New York Times
Alpharetta: Alpharetta, Georgia, based Cratos Capital Partners LLC is opening an office in Chicago. This is the first office Cratos will open in the Midwest; Bradley Byrd was named director to oversee business development in the Midwest. The Atlanta Business Chronicle has a short story on it.
Atlanta:
According to Jim Galloway, expect the Georgia legislature, the NRA, and the Brady Center to go at it again soon. The issue is over whether employees should have the right to keep firearms in cars parked on company premises during work hours. Expect good entertainment when the issue hits the floor. See the Political Insider.
Atlanta City Councilman C.T. Martin has proposed an amendment to city indecency ordinances. The new ordinance would target young men with saggy pants and women who show a thong under their pants, wear jogging bras in public, or show "even the wisp" of a bra strap. The "local newspaper" and Yahoo! News have the story.
The Atlanta Regional Commission is seeking control of the money raised through the proposed one cent sales tax currently under consideration by the state legislature. The proposed tax is predicted to raise $1.1 billion in the affected 10-county metro area by the year 2030. The Atlanta Business Chronicle and the "local newspaper" have the story on the ARC
Augusta:
The Augusta Commission approved a new $20 million trade, exhibit and event center for conventions and trade shows. This comes two years after the voters approved it. Once opened, it is expected to provide $1.4 million to the city in tax revenues and have about a $25 million impact on the local economy. To help fund the center, the city hotels will be charging an extra $1 hotel occupancy fee.
Former Burke County Magistrate Court deputy clerk Nicole Hammock has been charged with racketerring and stealing more than $21,000 from the county as people paid fines, fees, and court costs. The Augusta Chronicle has the full story.
Dunwoody: The Ashford Alliance Community Association inquired to DeKalb County when it saw a sign go up for a pawn shop at the intersection of Ashford Dunwoody and Johnson Ferry. They determined that the area was zoned C-1, while pawn shops have to be in C-2, in areas such as Buford Highway or Peachtree Industrial. That area is undergoing quite a bit of change as a new Bat and Ball Pub is set to go into that shopping cneter, a new Pizza Corner restaurant is set to open across the street, and a mixed-use project is replacing public housing. The Dunwoody Crier has more information.
Norcross: Advanced Disposal Services is trying to build a transfer station on Button Gwinnett Drive, their third attempt to build a transfer station in Gwinnett County. This time, OFS, a fiber-optics company, is fighting the transfer station, saying that it could sink their plans for the area's redevelopment. The Gwinnett Daily Post has the story.
Georgia:
Pecan farmers are happy thus far with the expected pecan crop, although they are worried about any big storms or hurricanes that could damage the trees or blow the fruit off the trees. The hot and dry weather has even helped them avoid many of the problems relating to disease and insects. The story is at Gainesville Times.
The Small Business Administration announced that federal disaster loans are available to small businesses and small agricultural cooperatives located in Georgia, except Chattahoochee and Muscogee counties. The SBA notice declaring most of Georgia as an economic injury disaster is available (PDF). Information about the loans and other disaster relief is available from the SBA website.
Beazer Homes USA, Inc. recently delayed its fiscal third-quarter filing because it discovered "accounting irregularities." This delay puts into issue whether that is a default under many of the bonds and other loans worth about $1.38 billion. The company filed in U.S. District Court to stop creditors from forcing the company to repay this amount under the default provisions. The Columbus Ledger and Atlanta Business Chronicle have more.
When HomeBanc laid off more than 900 workers when it declared bankruptcy, it came as a surprise to many of those workers and made them very unhappy. Now, three of them have joined in a class-action lawsuit, filed Tuesday in the U.S. Bankruptcy Court in Wilmington, Delaware, where the HomeBanc bankruptcy proceeding is taking place. The workers are claiming that the layoff violated employee rights under the Woerk Adjustment and Retraining Notification Act which requires 60 days advance written notice before conducting widespread layoffs. Workers from American Home Mortgage Investment Corp filed a similar lawsuit on August 9 when their company went into bankruptcy. More available from Columbus Ledger.
Elsewhere:
New York has passed a new law that prevents knockoff music acts from impersonating the real thing. This new law does not prevent "tribute" or "salute" bands, nor those that have at least one member of the recording group in it. See the Daily Report for more information.
Countrywide Home Loans promised to repurchase some loans it sold to investors if the homeowners got into financial difficulty. But Countrywide is in a dubious financial situation right now; Bank of America agreed to invest $2 billion into the troubled company. More available from the New York Times
In the past nine months, about 120 mortgage lenders have closed or declared bankruptcy. About 40,000 workers have lost jobs since the beginning of the year. See Yahoo! News.
Bank of America, Citigroup, JP Morgan, and Wachovia each borrowed $500 million from the Federal Reserve Bank of New York, just days after the rate and collateral standards were lowered. New York Times
Saturday, July 21, 2007
Georgia Sales Tax Holiday
Starting August 2 and continuing through August 5, Georgia will be "celebrating" a state-wide sales tax holiday. For this August holiday, articles of clothing and footwear under $100, personal computers under $1,500, and general school supplies under $20 are all sales tax exempt. Accessories are not tax exempt.
The items must be purchased for an individual's personal use and not for business purposes. Items sold at theme parks, entertainment complexes, hotels, restaurants and airports are not tax exempt.
For information on specific items that are or are not tax exempt, please see the Georgia Department of Revenue website on the sales tax holiday.
The items must be purchased for an individual's personal use and not for business purposes. Items sold at theme parks, entertainment complexes, hotels, restaurants and airports are not tax exempt.
For information on specific items that are or are not tax exempt, please see the Georgia Department of Revenue website on the sales tax holiday.
Thursday, July 5, 2007
Taxes Leading Concern for Small Businesses
A study conducted by International Profit Associates Small Business Research Board shows that taxes are the leading concern for small businesses for the second quarter of 2007. Taxes replace health care costs for the top spot. Other top concerns for small businesses include economic conditions and energy costs.
Remember that payroll tax deposits are due on July 16; sales and occupancy taxes are due on July 20; and quarterly payroll tax reports are due July 31.
Remember that payroll tax deposits are due on July 16; sales and occupancy taxes are due on July 20; and quarterly payroll tax reports are due July 31.
New Oconee County Occupancy Tax
On Tuesday, July 3, 2007, Oconee County imposed a new 6% occupancy tax for stays in hotel and motel rooms in unincorporated parts of the county. The tax is not applicable to permanent residents as well as state or local governmental officials while traveling on official business. Permanent residents are those guests who have remained for ten consecutive days. The tax begins on January 1, 2008, no matter when the contract or reservation was made.
Hotel and motel operators are to submit payment by the 20th of every month, the same time sales taxes are due. Penalties will be assessed if payment is made after the 20th of the month.
Hotel and motel operators are to submit payment by the 20th of every month, the same time sales taxes are due. Penalties will be assessed if payment is made after the 20th of the month.
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