Lawmakers learned the fiscal power of expanding the sales tax base in 2020.
This year, a few months before the COVID-19 pandemic shut down the economy, the House and Senate passed legislation to impose more sales taxes on products purchased through websites.
The new tax proved to be a great boon for the state as Georgians started buying more and more products online. The state has run massive revenue surpluses over the past two fiscal years, and the internet sales tax has been seen as one of several contributing factors.
This year, House Bill 170 by Rep. Kasey Carpenter, R-Dalton, was the latest offering to bring digital sales into line with taxes paid when Georgians buy similar products from local stores.
The carpenter’s bill included downloads of things like books, video games, and music that a buyer keeps in possession. It wouldn’t tax streaming services — like Netflix — or subscription-based products, he said.
Rep. David Knight, R-Griffin, a longtime member of the House Ways and Means Committee, said the panel has been looking at the issue of parity for local businesses, which pay the state’s 4% sales tax and local ones, in recent years Collect sales taxes when Georgians buy products from them.
Carpenter’s bill passed the House of Representatives with ease, but Senate tax collectors took a measure to make it easier for Georgians to get beer, wine and liquor shipped to their homes. The lobby of the politically powerful beer, wine and spirits traders did not like this and delayed the measure.
So on Monday, the House of Representatives pinned Carpenter’s measure to SB 56, which happened to be sponsored by Senator Chuck Hufstetler, a Republican from Rome and chair of the Senate Finance Committee, who had earlier passed it with the amendment, which the liquor lobby didn’t like . This change was not included in SB 56.
“I know that when the house sends something over with so many measures, it’s difficult to keep up,” Hufstetler told colleagues on the 40th day. “It’s fair to say that however you sell something, it should be taxed the same way.”
The bill won final passage by a vote of 49 to 5.
The General Assembly approved a state sales tax on digital downloads on the last day of the legislative period. The tax would be levied on purchases of books, video games, and music that a buyer keeps in possession. Streaming services – like Netflix – and subscription-based products would not be taxed.
State estimates show that the revenue from the new tax would be:
- $80 million in the coming fiscal year.
- $172 million the year after.
- Over $200 million by fiscal year 2028.
If Gov. Brian Kemp signs the tax into law, it will go into effect on January 1.
www.ajc.com
https://www.ajc.com/politics/final-day-christmas-tree-brings-sales-tax-on-digital-book-music-downloads/JKNQQRPDW5CKLPUTVF7J4L3H6A/
