As legislators begin grappling with another round of budget cuts and a proposal to extend a controversial tax on hospital revenues, some groups are calling for the closing of tax loopholes.
Tax collections are coming in below the projected rate this fiscal year, so Deal ordered all state agencies – except K-12 education – to trim spending 3 percent.
The largest tax break is the personal exemption from individual income taxes, representing $1 billion.
Exemptions for retirement income, $697 million; Social Security, $140 million; and credit for taxes paid to other states, $185 million, are also among the largest ways private Georgians keep from forking more over to the government.
Exemptions from the sales tax also benefit individuals, including $509 million on food, $423 million for prescriptions, $171 million on lottery tickets and $8 million on school lunches. The sales-tax holidays that temporarily exempt school supplies save $41 million.
There are many more itemized tax breaks for various business interests, but for smaller amounts each. For instance, film production companies save $86 million. Deferral of capital-construction costs for shipping companies amounts to less than $1 million.
Some business tax breaks are due to expire this year. A break on seed, fertilizer and farm chemicals that ended Jan. 1 totaled $150 million in the past fiscal year. The exemption of certain machinery used in the manufacturing of consumer items expired the same time and
amounted to $175 million last year.
One due to expire in June is the sales tax exemption for airplane engine-repair parts, which was worth
$7 million last year. It’s being pushed by companies including Gulfstream Aerospace, which argues that jobs
would be lost if airplane customers took their business to states that don’t charge the tax.