Lawyer taxes in Decatur become delinquent

Attorney Bill Payment Final Deadline

Lawyers practicing in Decatur must pay a $425 occupation tax annually. The 2015 tax was due by Dec. 31, 2015. A three-month grace period expires today. Lawyers who have not paid by today become delinquent and subject to escalated collection activities and will be reported to the State Bar of Georgia. Revenues from the tax are used to provide quality services to the public. For further information please call 404-370-4100.

Bill protects deployed troops from tax penalties

The Georgia General Assembly has passed a bill requiring property tax collectors to waive penalties and interest for military servicemembers if they pay the principal owed within 60 days of returning from a combat zone. House Bill 991 started out as a bill modifying the definition of the value of conservation-use property but was replaced by the House Ways & Means Committee with the waiver for deployed taxpayers. Known as the “Returning Heroes Act,” the bill heads to the governor’s desk next.

The bill would be financially beneficial to military personnel, effectively allowing an interest-free deferral of property taxes due while deployed. That being said, the bill could also lead to unintended consequences in some cases. For example, if a tax commissioner does not know that the reason for delinquency is military service, the tax commissioner could lien and levy the property before the taxpayer’s return. Although the penalties and interest could subsequently be waived, getting the lien cancelled would be annoying for the taxpayer and the tax commissioner. It would be in the deployed taxpayer’s best interest to communicate proactively either prior to deploying or from overseas to ensure that the tax commissioner is aware of his or her deployed status to prevent escalated collection action.

A second wrinkle is that the bill does not distinguish between deployed taxpayers’ homes of record versus investment properties. I am not sure that it is the intent of the General Assembly to grant a senior officer who may own or co-own a dozen investment properties to defer taxes during what could be a 400 day deployment. While the Returning Heroes Act is a great idea that should be approved, in hindsight it may have been better to specify that this waiver shall apply to homesteaded properties.

City Commission levies school bond millage rate

The City Commission has adopted a new school bond property tax rate of 1.57 mills. The motion to approve the new rate, which will apply to 1st installment property tax bills for 2016, carried 5-0 during a public meeting tonight. The rate enables the first debt service payment toward the $75 million school bond issuance which was approved by voters on November 3 last year. The City of Decatur Schools will use the bond for capital improvements.

As Mayor Patti Garrett noted during the meeting, the 1.57 rate is lower than the average bond millage rate of 2.69 mills that was projected by the City of Decatur Schools when the bond was being debated last year.  The new millage rate results in a combined Decatur millage rate of 32.23 mills compared to 30.66 mills in 2015 and 33.5 mills in 2014.  City Manager Peggy Merriss said that the rates are subject to change in future tax installments.

Tax implications

The impact of the new tax rate will vary according to property value. Taxes for a resident with a $500,000 home will go up by about $400 for 2016.  Decatur bills in two installments; charges would the same each installment unless the school bond millage rate is increased or the property owner's value changes in 2016.  Prospective tax charges according to value are shown in the chart below:



According to 2015 digest data, the median home value in Decatur is $380,000. Homeowners with that value would experience a $300 tax increase for 2016 compared to 2015. (Zillow shows a higher median home value at $435,000 based on sales data, but local taxes are based on assessments made by DeKalb County in accordance with factors mandated by state law.) 

Exemption considerations

Seniors will not be exempt from the new school bond charges. School exemptions known as the GS-1 (age 62), S-1 (age 62), S-2 (age 80), and S-3 (age 70) do not apply toward the school bond charge. Property owners with the disabled veterans homestead exemption or a year’s support exemption will be partially exempt from school bond charges. Year’s support provides an exemption of taxes for one year upon the death of a spouse if approved by the DeKalb County probate court. About a dozen homeowners in Decatur meet these criteria.

New exemptions still pending

The City Commission and Board of Education have proposed expanded tax relief including an exemption from school taxes for homeowners over 65. These proposals have been approved by the Georgia General Assembly. If approved by voters in November, these expanded exemptions would go into effect in 2017. School bond charges will continue to apply regardless of any new exemptions.

Georgia House OKs Decatur’s senior school exemption

The Georgia House of Representatives has approved Decatur’s proposal for a homestead exemption for homeowners over the age of 65 from school taxes. The vote on Senate Bill 343 carried the House this morning by a vote of 155 to 1. The bill had been postponed for the past several legislative days. If Governor Deal signs the bill into law, it will appear on local ballots in November for voter approval. The exemption would go into effect in 2017.

The dollar amount of property tax savings for the exemption will vary by homeowner. In order to get a sense of how much money you may save, look at your last City of Decatur property tax bill. On the line that says “School,” look to the right at the amount in the column that says “Total Due.” Assuming the exemption is approved, if you are over 65 and your home in Decatur is your principal residence, you would no longer see that charge from 2017 until at least 2021, when the exemption would expire unless it is renewed.  Property owners over the age of 80 with income under $40,000 were already exempted from local school taxes, so this will primarily benefit homeowners between the ages of 65 and 79.

The new exemption and existing school exemptions do not apply to the school bond that was approved by voters last November. Only disabled veterans will be partially exempt from school bond charges.

Last week the House also approved four other bills that will expand Decatur’s homestead exemptions beginning in 2017 if approved by voters this November.

Homestead exemption applications due today

If you are a homeowner in Decatur and your home here is your principal residence, you are eligible to apply for the basic homestead exemption from property taxes. Applications for the basic homestead can be made online here.  If you have already applied in a previous year, you do not need to reapply.  The exemption remains on your home for as long as you continue residing in the property with no changes in ownership.

Exemptions based on age or income can be applied for in-person at City Hall. Information about age-based exemptions can be found at www.decaturga.com/homestead or by calling us at 404-370-4100.

Although we will honor homestead exemption applications submitted up until April 1, please submit your applications by 5:00 p.m. on March 15 in order for your exemption to appear on your 1st installment property tax bill.  Please note that applications made to Decatur and DeKalb are handled separately:  if you've only applied with one office, you should check with the other office about your exemption status.

Columbus mayor says property tax freeze hurts seniors

Columbus mayor Teresa Tomlinson has been arguing against Columbus-Muscogee's property tax freeze for several years.  Their freeze basically locks the property value in place until the property is improved or sold.  Mayor Tomlinson says their freeze suppresses economic activity by discouraging home improvements and property sales.  New buyers are priced out of the market because the freeze shifts the overall tax burden from sellers to buyers.  Rather than protecting seniors on fixed incomes, Mayor Tomlinson argues that Columbus's freeze actually traps them.  If a senior attempts to downsize, they would lose money on their next home because they'd be subsidizing longtime freeze recipients.  Tomlinson says that it takes at least 14 years to begin benefiting from the freeze, and closer to 30 years until the freeze makes the taxpayer whole.  The average family moves every seven years, so she argues that most Columbus homeowners never benefit from the freeze.  She made her latest pitch during an interesting interview with WLTZ which you can view here.

The Georgia General Assembly has authorized a local referendum in November for Columbus to vote on whether to end the freeze.

City Schools of Decatur Homestead Exemption Tabled By Georgia House of Representatives – Your Action Needed

By Linda Harris

On Tuesday, March 8, 2016 four of the five City of Decatur’s homestead tax exemption bills passed the Georgia House of Representatives.  With the previous adoption by the Georgia Senate on February 11, 2016, those four separate pieces of legislation will move forward for the Governor’s signature.  However, SB 343 that provided the most significant tax relief from school taxes to citizens 65 and older has been delayed to a later date upon a motion by Representative Beth Beskin of Fulton County.

Representative Mary Margaret Oliver who represents part of the City of Decatur challenged the motion arguing that Rep. Beskin’s efforts to punish Decatur’s older citizens based on Atlanta’s refusal to grant similar relief to seniors was pure partisan politics.  “I am hopeful we will be able to get over the partisan obstacle created solely by Representative Beskin. I believe the Republican leadership will ultimately be supportive of local control to support the success of the Decatur school system and good management,” said Rep. Oliver.  Rep. Beskin stated to Decatur Mayor Patti Garrett that her motion to table had nothing to do with Decatur or the legislation itself.

“The City of Decatur and the City Schools of Decatur appreciate all of the efforts of Decatur legislators who have worked hard to get these bills passed including Senator Elena Parent and Representatives Mary Margaret Oliver, Howard Mosby, Rahn Mayo and Karla Drenner,” said Mayor Garrett.  “Our delegation members understand the need for property tax relief, particularly for our seniors, and I hope the Republican leadership will also understand our position and consider the merits and value to the citizens of Decatur of the senior homestead tax exemptions.”  The homestead exemption legislation was supported by the Decatur City Commission and the Decatur Board of Education who were acting with the support of the residents of the City of Decatur, including members of the Lifelong Community Advisory Board, a very active group of senior homeowners and the business community.

“It is unsettling that legislation designed by Decatur’s elected officials for the benefit of Decatur’s senior citizens, that would have no impact on anyone other than Decatur residents, has been met with opposition,” said Board of Education Chair Annie Caiola, who added, “We encourage our residents to join us in voicing these sentiments to the Republican leadership. This also happened last year when Decatur’s proposed senior exemptions failed in the eleventh hour due to similar unprecedented maneuvers.  It is our sincere hope that CSD’s homestead exemption legislation will be quickly put back on track to pass.”

To voice your opinion about the City Schools of Decatur homestead exemption, please contact Rep. Beth Beskin (beth.beskin@house.ga.gov); Rep. Jan Tankersley (jan.tankersley@house.ga.gov);  Rep. Jon Burns (jon.burns@house.ga.gov); Rep. Matt Ramsey (matt.ramsey@house.ga.gov);  Speaker of the House David Ralston (david.ralston@house.ga.gov); and, copy Rep. Mary Margaret Oliver (mmo@mmolaw.com).

Make sure they know that SB 343 would provide tax relief to senior property owners and that it is local legislation supported by the City Schools of Decatur, the Decatur City Commission and all of the members of the General Assembly that represent the City of Decatur.

State House approves tax exemption for fulfillment centers

The Georgia House of Representatives has unanimously approved a bill that would exempt merchandise in stock at fulfillment centers from business inventory taxes in jurisdictions that offer a freeport exemption.  Normally, businesses with inventory are subject to business personal property taxation on tangible items including equipment and inventory.  House Bill 935 excludes goods and wares at fulfillment centers with a freeport exemption from personal property taxes when those items are stored for less than 12 months.  Fulfillment centers are used by companies such as Amazon to fulfill orders placed by customers online or by phone.

The City of Decatur does not offer a freeport exemption, so this would not affect fulfillment centers if we had any.  DeKalb County offers the freeport exemption, and this could expand tax relief to companies operating fulfillment centers in the county.

Lawmakers propose decrease in state's top marginal tax rate

The Atlanta Journal-Constitution reports that two bills under consideration at the Georgia General Assembly would slightly reduce the state's longstanding top marginal income tax rate of 6 percent.  They also report that the governor would rather build up the state's reserve fund than approve a broad tax rate cut.  The proposals may not make it to the floor for a vote because it would put legislators in an awkward position:

It’s an election year — tax-cut proposals advance in Georgia 

STATE & REGIONAL GOVT & POLITICS | By James Salzer - The Atlanta Journal-Constitution 

Updated: 6:28 p.m. Thursday, Feb. 25, 2016 | Posted: 6:05 p.m. Thursday, Feb. 25, 2016

#It’s an election year, and that means lawmakers probably can’t end the 2016 session without some kind of tax cut, or at least a last-minute debate on one.

#And state Senate Finance Chairman Judson Hill, R-Marietta, has just the ticket for election-wary politicians.

#The Senate could vote as early as Monday on proposals from Hill. One, Senate Resolution 756, is a proposed constitutional amendment that would make a small reduction in the state’s 6 percent maximum income tax rate if the state has relatively full reserves and revenue collections continue to rise.

#The other, a reworked House Bill 238, would cut the maximum state income tax from 6 percent to 5.4 percent, reduce the number of itemized deductions, raise personal exemptions and eliminate the state’s corporate net worth tax that companies pay.

#Both measures overwhelmingly passed his committee this week. Hill calls them a conservative approach to tax reform. “Would I like to do more?” Hill said. “I would, but something is better than nothing.”

#Gov. Nathan Deal warned lawmakers off any major tax cut bills this session, saying his goal was to build the state’s reserves to $2 billion before he leaves office. There has been little talk of tax cuts this session beyond the usual special-interest breaks...

Atlanta renews penny sales tax

The biggest tax question on local Super Tuesday ballots was whether Atlanta would renew a one percent penny sales tax for improved water and sewer management.  Mayor Kasim Reed has said that the municipal option sales tax (MOST) helps keep water bills lower in Atlanta, and helps spread some of the costs along to people who visit or work in Atlanta but don't pay water bills.  Reed has also said that the MOST is important because Atlanta does not receive state funds to help comply with a federal consent decree.  Here's a report on the MOST approval from WABE:

Atlantans Overwhelmingly Approve Sewer System Tax Renewal

City of Atlanta voters have overwhelmingly approved a four-year extension of a one-cent sales tax for water and sewer system improvements.

That Municipal Options Sales Tax, or "MOST," is helping to pay for a federally-mandated $4 billion upgrade.

On WABE's "Closer Look," Atlanta Mayor Kasim Reed said, "If we had failed to reauthorize the MOST, water rates would have gone up by about 30 percent. And we already have some of the highest rates in the country because we have not gotten help financially on our $4 billion capital program."

More than 70 percent of Atlanta voters approved extending the tax.

Paycheck Plus enrollment comes to Decatur

The United Way of Greater Atlanta is rolling out a test program that offers working, low-income, single adults up to $2,000 after they file their taxes.  An information and enrollment event for Decatur and DeKalb County residents is scheduled for March 9 on Columbia Drive:

FREE DEKALB COUNTY ENROLLMENT EVENT FOR PAYCHECK PLUS 

United Way of Greater Atlanta is hosting a free enrollment event for the Paycheck Plus study on Wednesday, March 9 from 10 a.m. – 4 p.m., at the Goodwill Career Center located at 1295 Columbia, Dr., Decatur, GA 30032. Paycheck Plus is a project testing a new earnings supplement to improve the economic circumstances of low-income single adults and promote employment across Greater Atlanta. Through this program, single adults in Greater Atlanta, ages 21-64, who earned less than $30,000 in the past year and who do not claim any children on their tax returns, may be eligible to receive up to $2,000 back after they file their taxes, for up to three years. For more information, please call 888-366-9647 or dial 2-1-1.

Decatur homestead exemptions: current and proposed

If you are applying for an additional homestead exemption for your home in Decatur for 2016, please note that these are the exemptions the City and school system currently offer:

Current

• GH1—Basic homestead exemption 
• GS1—Exemption for homeowners over 62 with household income under $25,000 
• S1—Exemption if joint income under $10,000 excluding retirement income 
• GH2—Exemption if over age 65 
• S3—Partial school exemption if over 70 
• S2—School exemption if over 80 and federal adjusted gross income is less than $40,000 
• DV—Exemption for disabled veterans 

The additional exemptions that the City and school system have proposed for approval by the Georgia General Assembly and by voters are as follows:

Proposed

1. Expanded GH1 homestead exemption 
2. Expanded GH2 exemption 
3. New exemption for homeowners over 62 with household income under $50,000 
4. New school exemption for homeowners over 65 

These proposed exemptions would have to be approved by voters before going into effect in 2017. You cannot apply for these proposed exemptions yet. These exemptions would expand or be in addition to, not replacements of, the existing homestead exemptions. None of the exemptions listed above (except the disabled veterans’ exemption) would apply to the school bond that was approved last November.