Saturday, April 4, 2009

Tax Relief Executive Orders Ratified by General Assembly

Governor Sonny Perdue announced today that the General Assembly has given final passage to three House Bills that ratify Executive Orders cutting taxes on Georgia’s citizens.

House Bill 46 ratified an Executive Order that suspended the state’s prepaid state motor fuel tax on dyed fuel oils (off-road diesel). Dyed fuels are specifically used for off-road purposes in agricultural, timber, mining and construction industries. These industries were unfavorably affected by the amount of off road diesel in 2008 and the effect was to do away with Georgia’s sales tax on the sales of off-road diesel.

By suspending the tax, farmers and timber owners saved the four percent sales tax charged on off-road diesel. The state does not charge an excise tax on this type of fuel, and the executive order did not impact local taxes.

Rep. Jay Roberts introduced the legislation in the House and was carried in the Senate by Sen. John Bulloch. The bill will ratify the suspension of the collection of this tax from May 2008 through May 2009.

House Bill 121 ratified an Executive Order suspending the increase in gas tax that was set to go into effect on July 1, 2008. Taxpayers saved an estimated $70 million from the suspension, seeing relief at a time when gas prices were at an all-time high.

The suspension froze the state motor fuel and state sales taxes on other categories of fuel, including diesel, aviation gasoline, liquid propane gas and special fuels, which includes compressed natural gas. Taxes on diesel were set to rise 4.2 cents a gallon to 16.5 cents and taxes on aviation gasoline would have increased by 3.6 cents per gallon to 20.9 cents. Propane taxes would have risen 0.8 cents a gallon to 8.2 cents and taxes on compressed natural gas would have increased 2.9 cents per gallon to 13.8 cents. The suspension does not freeze or apply to any local sales and use taxes.

Rep. Jim Cole introduced the bill and was carried in Senate by Sen. Bill Heath. Both bills received unanimous passage by both bodies.

House Bill 59 ratified an Executive Order that removed the sales and use tax on drugs that are provided as samples to physicians and those dispensed for clinical trials, which are approved by the Institutional Review Boards (IRBs). By eliminating the inconsistency in the law, pharmaceutical medicines will be sold at retail and not taxed, but those that are distributed for no cost are subject for taxation.

This legislation was introduced by Rep. Larry O’Neal and was carried in Senate by Sen. Ronnie Chance. The bill passed unanimously in both bodies.
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