Georgia rated 5th tax friendliest state for seniors

Kiplinger has ranked Georgia as one of the top five states for senior taxpayers. Kiplinger reviewed the overall tax climate in the states to determine the ranking. A major factor behind the ranking was Georgia's income tax exemption for retirement income.  Here’s their summary for Georgia:

State Income Tax: 1% (on income up to $750/individual, $1,000/joint) - 6% (on income over $7,000 individual, $10,000/joint)

State Sales Tax: 4%

Estate Tax/Inheritance Tax: No/No

Ever wonder why so many retirees have Georgia on their minds? The Peach State's low tax climate may have something to do with it. Social Security income is exempt from state taxes, and so is as much as $35,000 of most types of retirement income for people ages 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer, or $130,000 per couple. Retirement income includes interest, dividends, net income from rental property, capital gains, royalties, pensions, annuities and the first $4,000 of earned income, such as wages.

The statewide sales tax is 4%, but jurisdictions may add up to 4% of their own taxes. The average combined state and local sales tax rate is 6.96%, according to the Tax Foundation. Food and prescription drugs are exempt.

The median property tax on the state's median home value of $141,600 is $1,352. Full-time residents qualify for a homestead exemption, and seniors may qualify for additional deductions from property taxes. 

For the other listings, check out Kiplinger’s slide show here.

Tax legislation that survived crossover day

At least 20 bills involving taxes stand a chance at passing during the 2015 session of the Georgia General Assembly. Another 30 tax measures failed to pass at least one chamber of the Assembly before last Friday’s “crossover” deadline. The viable bills deal with electronic notices of taxes due (HB 49), assessment and appeal procedures (HB 202), changes to the homestead option sales tax (HB 215), the postponement of tax and filing deadlines if those deadlines fall on a Federal Reserve holiday, and several changes to what is considered to be exempt from sales tax.

Revenue bills that didn’t survive include HB 68 which would have prohibited mailing tax bills for less than $5, SB 97 which spelled out additional requirements for tax officials before they could set or transfer liens for delinquent property taxes, and HB 265 which would have reduced the interest rate charged against delinquent tax amounts.

Local legislation such as annexation or local homestead exemption legislation aren’t subject to the crossover deadline and could still pass this session. Bills that don’t pass during this session could be reconsidered during 2016.

Tax implications of the Braves move

As the Atlanta Braves prepare to move up the road, Cobb County businesses, residents, and visitors will face a handful of new or increased taxes.  Here’s what we know of so far:

·         A 3-mill property tax increase for 175 businesses in the Cumberland Community Improvement District, stretching from parts of Paces Ferry to Powers Ferry.

·         A new 3 percent car rental tax countywide.

·         A new $3 per room per night hotel tax at hotels in the Cumberland area.

·         $368 million in Cobb County Exhibit Hall Authority bonds over 30 years.

·         A reallocation of $8.7 million in property taxes collected countwide—money that would have otherwise been spent on by Cobb County other recreation and greenspace initiatives.

·         45 acres of the new Braves site will be taxable, but 15 acres will be tax-exempt.

Unknowns

·         Future highway access improvements to the stadium and who will pay for them.

·         Will retailers in the Cumberland CID pass their higher property tax costs onto their customers in the form of higher prices?  Forbes’s “Tax Girl” Kelly Erb says, “Of course, savvy consumers realize that corporations don’t simply eat tax and other increases: they pass those increases along to consumers. Higher taxes for businesses will likely result in higher costs for taxpayers, just on a receipt and not on a tax bill.”

·         Will Atlanta itself receive any tax reduction now that the Braves are departing?

Taken in combination with the renewal of Cobb’s SPLOST earlier this month, it seems like Cobb County’s reputation as a low-tax haven in metro-Atlanta may be fading somewhat—a phenomenon which, over time, could help Decatur and DeKalb’s attractiveness in the metro-area by comparison.

 

 

Georgia tax tinkering

If the recently introduced House Bill 1405 is passed by the Georgia General Assembly, a new commission adopted by the state may lead to a “total overhaul” of Georgia’s tax system. Here’s the story from yesterday’s Augusta Chronicle:

ATLANTA -- A bill introduced this week with the support of Senate and House leaders sets the framework for a systematic study of Georgia's tax system this summer and fall by a blue-ribbon committee and creates an extraordinary mechanism for submitting any recommendations it may produce to next year's Legislature.

Lt. Gov. Casey Cagle and House Speaker David Ralston have a morning news conference planned at the Capitol to outline their thinking for the proposal.

House Bill 1405 makes no mention of the state's current budget problems but potentially provides a path lawmakers can travel if they wish to make fundamental, long-term changes and gives them a fall-guy to blame (a blue-ribbon commission) if the political fallout is too hot.

The bill, first of all, creates an entity to be known as the 2010 Special Council on Tax Reform and Fairness for Georgians. Its job is to conduct a thorough study of the current revenue structure and to report its findings to the speaker of the House and the lieutenant governor no later than Jan. 10, 2011.

Click here to read the full story. State Rep. Larry O’Neal says the proposal would not affect local taxes. That being said, I think the commission would have the authority under the current wording of the bill to review property taxes because those are part of the state’s total revenue structure.

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