Create…Expand…Attract
ATLANTA— Today State Representative Tom Graves (R-Ranger) announced the “Jobs, Opportunity, and Business Success Act of 2009.” This Act is comprised of House Bills 481 and 482. This legislation provides an economic recovery plan for Georgia’s economy by providing an economic environment that encourages opportunity, productivity, and innovation.
“This proposal is a stark contrast to the Washington stimulus bill,” said Rep. Graves. “We believe the hard-working people of Georgia – not big government – are the key to our economic prosperity. If consumers and investors have confidence in the economic environment, then spending, investing, and job creation will occur.”
HB 481 will:
• Create a $500 credit towards the unemployment insurance tax for each eligible employee hired. This credit would be applied towards the employer’s future unemployment insurance contributions. For the employer to be able to receive the credit, the eligible employee hired must have received unemployment benefits for more than 60 days and been employed by the business for more than six continuous months. The assistance will be available until July 2010.
• Create a $2,400 income tax credit for each eligible employee hired. This credit will be available to those who hire an employee that has been unemployed for at least 60 days and remains employed for at least 24 months at a rate above the average weekly rate of unemployment benefits as determined by the Department of Labor. The credit will be available for the tax year in which the employee completes 24 months of work. To receive the credit, the employee’s initial hire must be prior to July 2010.
• Start a “New Business Tax Holiday.” Currently, any new business that registers its corporate name with the state is required to file a $100 filing fee with the Secretary of State. Under this legislation, the $100 fee will be waived. This component would create a 1 year “holiday” on new filings for LLC’s, Limited Partnerships, and For Profit Companies. In addition, it would provide the same suspension on fees related to the $30 annual registration of existing companies.
• Eliminate the Sales Tax Deposit. This section of the Act eliminates an outdated tax on Georgia business capital. This is a fee charged to all Georgia businesses which have $5,000 or more in sales tax collections each month. The Department of Revenue (DOR) looks back over the first 12 months of a business’ collections. Taking the average sales tax collection amount each month, the DOR requires the business to forward fund a deposit of working capital. This deposit is held for perpetuity or until the business fails, whichever comes first. Eliminating this deposit would put much needed capitol back into Georgia’s businesses.
• Gradually eliminate the Corporate Income Tax. Beginning in 2012, the Corporate Income Tax rate will be reduced by half a percentage point each year over 12 years.
HB 482 will:
• Eliminate the State Inventory Tax on all Georgia businesses through a statewide referendum. Currently, Georgia charges an inventory tax on all inventories that are still housed in the state at the end of the year. This is done through the ad valorem process and taxed as personal property. As a result, many companies shift inventories out of state, withhold purchasing, or locate distribution centers outside of our borders to avoid the tax. The fiscal impact to the state to remove this tax would be approximately $2.5 million. However, if we lift this tax there will be great incentive for businesses to purchase products, stock inventory, and locate distribution centers throughout Georgia. Because this will require that elimination of an ad valorem tax, a statewide resolution is required.
HB 481 and 482 have both been sent to the House Ways & Means Committee.
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