ATLANTA --- House lawmakers are considering reviving the state sales tax on groceries to buoy Georgia's sagging revenues under a proposal that would reimburse residents through a tax credit.
State Rep. Chuck Sims has unsuccessfully sponsored proposals for several years that would restore the sales tax on groceries for the first time since the late 1990s.
But as the state grapples with a multibillion dollar budget shortfall, his plan suddenly has fresh momentum. The latest version passed a key committee this week, and House Speaker Glenn Richardson's office said it could reach a vote before the full chamber next week.
"It's going to get a fair hearing in the House," said Richardson spokesman Marshall Guest.
The plan is a significant change from Mr. Sims' initial proposal to restore the grocery sales tax over a two-year period, which he hoped would raise close to $1 billion a year.
Instead, the latest draft would remove the state sales tax exemption on groceries and replace it with an income tax credit.
The credit, which could be claimed in an income tax return, would be determined by using a standard deduction based on family size. A family could also save receipts from grocery purchases.
Mr. Sims said the change could capture as much as $250 million a year, mostly from out-of-state shoppers who buy groceries from Georgia retailers. The plan was approved Thursday by the tax-writing House Ways and Means Committee.
"We as a state have to look at the fact that revenue is not there, and we're going to have to do something to enhance revenue, to pay our teachers and police officers," said Mr. Sims, R-Ambrose.
Georgia lawmakers voted to repeal the state sales tax at the urging of then-Gov. Zell Miller in 1996. The tax cut, which was phased in, was eventually worth $700 million each year. Local governments continue to levy taxes on groceries.
The House's leaders have been hesitant to back tax increases to fill Georgia's deficit, arguing that increasing the tax burden could stifle economic growth.
Meanwhile, Georgia tax collections took a nosedive in February as cash-strapped residents filed returns early, hoping for a windfall.
State money managers reported Friday that revenues plunged a whopping 34.8 percent, tumbling $336 million from the same month the year before.
Gov. Sonny Perdue said the state Department of Revenue has shipped out 48,000 more tax refund checks in February than it had the same month the year before.
That suggests cash-strapped Georgians are filling out their returns quickly.
Overall, tax collections are down 7.3 percent for the fiscal year set that ends June 30.
The figures released Friday show personal income taxes plunged 63.6 percent.
Comments
Why would these out of state people come to GA to buy groceries when they know they will be taxed for it? Are they coming here just because there is no tax now? Take away the incentive, you take away the customers. Then you'll lose the revenue you thought you were going to get.
he's a rino!
Raising taxes during an economic down turn doesn't increase revenue for the state. It reduces spending by the general population. Maybe the state should consider a similar idea. Quit cutting needed expenditures and look at subsidy and government waste for places to cut.
I don't understand how they think out of state people will cross into Georgia to shop for groceries. North Augusta has great grocery stores and I'd never go the distance to buy something I can get in my own state. I'm sure it's the same on the entire border of SC, AL and FL. That's just dumb. Besides, GA gets enough of my tax dollars.
Yup, that's typical Republican. Taxes on the rich are bad for the Economy, but we need to soak the little guy with increased taxes on Groceries, Cigarettes, Gasoline and whatever else we can think of...
First let me say that I oppose ANY new taxes. They get plenty of taxes from us. I do not understand why legislators think that it is okay to raise taxes in hard times. It's crazy. The answer is for them to cut fraud, waste, abuse, and all but the essential programs. BUT, if they have to raise tax at least the grocery tax is a fair tax on everyone. It is not targeted at one segment like "wealthy" people, smokers or drinkers or SUV drivers or any other sin tax. It is a fair tax, across the board on everyone. It is even fair in the sense that "wealthy" folks probably buy more expensive brands and cuts of meat, etc. than lower income folks and consequently the wealthy would pay more. So, as taxes go, at least it is a fairer tax than most and probably somewhat proportional to income as are most cosumer type taxes.
got to feed the beast somehow.............
Gov.Sonny Perdue we don't have time for your politics games to make a delusion about more tax refund cheques was sent out by the Department of Revenue than last year. However,governor tell the Georgians about the increase in audit of state tax return because money the state of Georgia need to recovery to fix Georgia's budget deficit you help create and your borrowed loan money from the bank.
Governor Perdue absolutely needs audited with his outstanding loans. Curious if he has backed taxes. Would love to know what moneies he is using to get out from under all that debt.
Economics 101: Do not raise taxes in a recession!
SCGAL - People who live in the Chattanooga area cross over to northern Georgia in droves to shop for groceries. TN's tax rate makes it worthwhile for them. I'm sure these are the people the legislature imagines will continue to drive across the border if grocery taxes are reinstated. I'm also sure these same people will realize it's no longer worth the drive once grocery taxes are imposed and start shopping in Tennessee again.
Great. More taxes. Just what we need. (Not!)
Our legislators just can't get it right. They could raise the cigarette tax, raise more revenue and only tax those who choose to smoke. Everyone has to buy groceries.
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