The Georgia House overwhelmingly backed the state’s latest plan to get Georgians who buy goods online to pay sales taxes.
The House voted 157-11 Wednesday for House Bill 61, which would force online retailers with at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send “tax due” notices each year to customers who spend at least $500 on their site.
Copies of the notices would go to the state Department of Revenue so it would know who owes at least some of the taxes.
Several House leaders from both major parties have signed onto the bill, sponsored by House Ways and Means Chairman Jay Powell, R-Camilla. Senate Appropriations Chairman Jack Hill, R-Reidsville, said Tuesday that he backs the idea.
Powell told colleagues Wednesday: “This allows us to collect a tax that is already due. It is not a new tax, it’s an existing tax.”
But state Rep. Sam Teasley, R-Marietta, has raised concerns that state and local governments could be taking in hundreds of millions of dollars in revenue without cutting taxes in other areas. He asked Powell to pledge to work on cutting other taxes if and when big money starts pouring in from the e-tax. The sponsor said he would.
Powell’s measure is the latest shot fired in a years-long battle to get online retailers to collect sales taxes on purchases. The owners of retail stores — who have a lot of political clout at the Capitol — have long said they are handicapped by the fact that their customers are charged state and local sales taxes on what they buy while many online customers are not. That means products can cost less when bought online.
“We already have retailers in the state of Georgia who are paying sales taxes, who are paying salaries, who are paying ad valorem taxes, who are supporting our schools, supporting local charities, and they are at a competitive disadvantage when a retailer can sell the same item and not have to pay sales taxes,” Powell said.
The General Assembly passed a bill in 2012 aimed at getting Amazon.com to start collecting sales taxes, and in 2013 the company agreed to do so. Three years later it announced plans for a distribution center in Jackson County.
But many other e-retailers still don’t collect or remit the taxes to the state.
A state fiscal analysis suggests collecting those taxes could mean an extra $274 million in revenue for the state and $200 million for local governments. The combined figure could hit $621 million by 2022.
The state report estimates about $5.1 billion worth of e-commerce and mail-order purchases by Georgians from companies without state stores went untaxed in 2016, more than half of all such sales.
Besides the question of fairness to local Georgia businesses, Powell said the e-tax is important because the retail economy has changed and state tax law hasn’t kept up with those changes.
He said sales tax collections have been fairly flat even as Georgia’s economy has improved because there are more untaxed online sales.
During the past fiscal year, 2016, the state collected 8 percent less in sales taxes than it did in 2007, according to a review of Revenue Department figures. State income tax collections in that time rose 17 percent.
In the past five years, as the state recovered from the Great Recession, sales tax collections were up slightly, but the take from income taxes rose more than 20 percent.
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