Last night, Georgia lawmakers passed House Bill 170, a massive transportation funding bill that will raise taxes by $700 million a year. Americans for Tax Reform opposed the legislation and urged the legislature to prioritize currently collected revenue to fund new and existing transportation projects instead.
Georgia ranks 36th in the country in the Tax Foundation’s State Business Tax Climate. Florida ranks 5th. As Florida looks to further reduce the net tax burden on residents, particularly low-income ones, Georgia continues to fall behind by not working to simplify the tax code with pro-growth policies that reduce the net burden on small businesses and consumers. This may prove to be a boon for Governor Rick Scott, who has worked hard to attract new residents and businesses to the Sunshine State.
Here is a list of the tax hikes including in HB 170:
- A new $200 fee on electric vehicles and the elimination of a $5,000 tax credit for purchases or leases of electric cars;
- A new fee on heavy trucks between $50-$100 amounting to a $50 million tax hike;
- A new $5 per night hotel or motel occupancy tax amounting to a $200 million tax hike;
- A recalculation of the statewide gas tax and fee structure amounting to $390 million in tax hikes.
According to the Georgia Public Policy Foundation, “Local sales taxes on motor fuel amount to about 6 cents per gallon at current prices, so a revenue-neutral excise tax that does not change local sales taxes on motor fuel would equal 23.2 cents per gallon.” Unfortunately, this legislation was not revenue-neutral. HB 170 imposes a new state 26 and 29 cent excise tax per gallon of gas and diesel. This is on top of the local taxes and a federal 18.4 cent per gallon gas and 24.4 diesel tax.
A last minute addition to the legislation included the $5 per night motel and hotel tax. These taxes are a top target for lawmakers who like raising taxes without doing so on people who can vote them out of office. These taxes punish hoteliers, small businesses that provide jobs and help stoke economic growth in their communities. Higher taxes reduce hotel business, which hurts downstream businesses such as restaurants and convenience stores whose success depends on hotel traffic. In inserting this tax hike into HB 170 at the last minute, legislators targeted the 5th largest employer in the state, an industry that already generates $2.8 billion in direct and indirect revenue for Georgia.
ATR opposes House Bill 170 and if Governor Nathan Deal signs it, he will be violating his Taxpayer Protection Pledge to Georgia taxpayers.