Thursday, September 9, 2010
Meeting held for public input in Gainesville
Introductions were made by Council Chairman A. D. Frazier
1. David Bishop from the Georgia Railroad Association presented the following:
· There are 106 miles of short-line railroad in Georgia
· Short-line railroad was spun off from the larger railroad companies
· Short-line infrastructure affects all the economy
· There is a 4% sales tax they have to pay for all diesel purchases, sees that as having to subsidize the trucking industry because that tax is used to build roads and highways, and not railroads
· Wants elimination of the sales tax on diesel purchases for railroads
2. Shawn Craig of CSX offered the following:
· Speaking for Class I and short-line railroad
· Railroad the most capital intensive industry
· 17% of profits go back into systems, only 5% for most other industries
· There are 5,000 miles of track in Georgia
· Employs 7,000 Georgians
· Average annual wage for their employees, $90,000
· Sees a need for 30% to 50% increase for rail infrastructure over next next 10 years
· Cost for that increase, $150m, 2/3 of which will come from income
· Referenced a bill in the Georgia Legislature that would have created investment tax credits, and would have accelerated equipment depreciation
· Georgia on of 4 or 5 states that taxes diesel purchases for railroads
· Georgia accounts for one of the largest tax burdens for the railroads of all the states
3. Zippy Duval, President of the Georgia Farm Bureau made the following presentation:
· Operates a farm in Greene County
· Georgia farm Bureau strives to be the voice of Georgia farmers
· Praised the council for listening to citizens
· Advised against shifting to additional sales taxes
· Said that sales tax exemptions for farming amounts to the smallest of all the sales tax exemptions
4. Karin Callen, representing the city of Douglasville offered the following:
· Would like for municipalities to collect sales tax (sales tax remitted directly to them, and not the Great State of Georgia)
· Wants a more simplified tax structure
5. Ronda Gladden from Clarkesville offered the following:
· Would like to see property taxes addressed
· Said tax assessments are wildy different from one tract to another in same subdivisions
· Wants a fairer appeals process
· Said that when she appealed an appraisal, the appeals board turned and asked the very person, the appraiser who had made the initial appraisal what he thought about the appeal
6. Charles Barnwell, a CPA and a multi-state tax practioner spoke:
· He criticized the un-collected tax on out-of-state internet sales
· Praised the Streamlined Tax legislation that the 2010 General Assembly created
· Said the participation in the Streamlined Tax legislation (this is legislation that is being considered by most states, and approved by some) is voluntary
· Said that many of the large internet retailers will never voluntarily participate
· Said that there should be an incentive, a rebate to the retailers funded out of the sales and use tax in order to get them to participate in the Streamlined Legislation
7. Billy Adams of the Southern Equipment Dealer’s Association offered the following:
· His associations sells primarily farm equipment
· Favors maintaining sales tax exemptions for farmers
· Competition with other states is an issue
Chairman A.D. Frazier mentioned that a presenter in Rome said that some states give farmers an ID that shows that they should be exempt from sales tax on farm related purchases (fertilizer, tractors, etc.) when they make those purchases. He said he had once bought a front loader, and might not have had to pay sales tax if he said he used it in farming. Mr. Adams said that currently, you must sign an affidavit that says you are using the product for farming.
8. Bill Sutton offered the following on behalf of local governments:
· Excise tax on Pre-paid wireless does not come back to local government
· Believes that local governments should have an advocate at DOR
9. Greg Kirby spoke on behalf of the carpet industry
· The industry employs 4,000 Georgians
· Sales were down 35% last year
· Georgia needs competitive tax structure
· Said that the cost of energy higher in Georgia than other states
· Spoke against local collection of sales tax
9. Mike Giles, President of the Georgia Poultry Association offered the following:
· Poultry has an $18.4m annual impact in Georgia
· Georgia is in competition with other states
· The following are the written remarks submitted by Mr. Giles:
Comments to the
Special Council on Tax Reform and Fairness for Georgians
Fact Finding Session, Oakwood Georgia
September 9, 2010
Mr. Chairman & Council
Members:
My name is Mike Giles,
and I serve as President of the Georgia Poultry Federation. The
Federation is a trade
association with represents poultry growers, companies and allied
industries in Georgia,
the nation’s number one poultry producing state.
Poultry is the leading
sector of agriculture and agribusiness in the state. According to the
University of Georgia,
poultry has an annual economic impact of $18.4 billion, and the jobs of
approximately 100,000
Georgians depend on the poultry industry either directly or indirectly.
We are thankful that you
have chosen to have one of the Special Council’s Fact Finding
Sessions in Hall County,
the Poultry Capital of the World. When some people think of poultry,
they think of north
Georgia, and while it is true that the majority of poultry in Georgia is
produced in this part of
the state, it is also true that poultry has a significant economic
impact on
rural communities
throughout middle and south Georgia. In fact, 59 counties in Georgia
have
some type of commercial
poultry facility – a hatchery, feed mill or processing plant – and 105
counties in Georgia
produce over $1 million in poultry at the farm level.
I might be biased, but
in my opinion Georgia is the best place in the world to grow and
process chickens. We
have a world class system of support from our research universities at
the
University of Georgia
and the Georgia Tech Research Institute as well as an outstanding
poultry
laboratory network
headquartered here in Oakwood.
Georgia poultry
companies and growers pay state and local taxes, create jobs and support
communities throughout
the state. At the same time, they compete with producers and
processors worldwide and
in other poultry producing states in the nation. Many of Georgia’s
poultry companies
operate in multiple states, and they regularly make decisions, large and
small, about where to
deploy resources, open or close facilities and where to retain or expand
jobs.
The tax environment of
the state is one of a number of factors that are considered when
making these decisions.
Georgia competes fairly well currently when these things are
considered. We aren’t at
the top in state rankings, but we aren’t at the bottom either. I think
it
is clear to those who
have followed the work of the Special Council so far that that the
Council
understands that Georgia
producers are in competition with those in other states, and the
Council is making a
serious effort to evaluate fully these competitive factors in advance of
making its
recommendations to the Legislature in 2011. For that, we are very
thankful.
I would like to echo
some of the comments that you have heard during the Fact Finding
sessions in other cities
and from some of the presenters who spoke yesterday at the meeting of
the full Special
Council. We believe that there is justification for limiting the
taxation of
business to business
sales or business inputs that go into growing, processing or
manufacturing
goods. In the poultry
industry these inputs could be energy used at the farm level or
machinery
and equipment used in
processing, which are exempt, or energy used to process chickens which
is not exempt. The
process of making things, whether it is on the farm or in processing and
manufacturing plants, is
vital to job creation and the development of wealth which fuels
economic development. We
encourage the Special Council to take these things into
consideration when
formulating its final recommendation to the Legislature.
I have a tremendous
amount of optimism about the future of agriculture and agribusiness
in the state of Georgia.
Rather than an industry of the past, we think the production of food
holds great promise for
economic development and expansion over the next several decades. It
is widely accepted that
the world’s food supply will have to double or triple by 2050, depending
on how much the rest of
the world develops during this time period. Only 3% of the earth’s
surface has the
combination of land, water and sunlight to grow and process food, and
this land
is for the most part
already in production. It is easy to overlook how rare it is to have the
natural resources that
we have in Georgia at our disposal. I believe that Georgia and the
southeast will be at the
forefront of feeding the world for decades to come, and this will
present
countless opportunities
for Georgians from the farm to food processing and distribution and
beyond.
The Special Council has
a tough job ahead of it. We thank you for your service and for
the open and transparent
way in which you are operating, and for the opportunity to provide
these comments.
10. Margaret Ballard,
Mayor of the City of Cornelia, and member of the Habersham Board of
Health offered the following:
· Asked for an increase in the tobacco tax
· She criticized state cuts in funding for health issues
11. Jimmy Norman, with the Citizens for a Constitutional Government offered the following:
· Encouraged shift to consumption tax
· Does not wan businesses taxes
· Wants to eliminate property taxes
· Believes by eliminating property taxes, the real estate industry would rebound overnight
12. John Heavener with Georgia Retailers Association offered the following:
· His association does not support local collection of sales tax
· Referenced Alabama which allows local collection of sales tax, said there are many problems with it there, including charges of corruption
13. Ken Moreau with the Georgia Sod Producers offered the following:
· Praised the legislation Georgia passed, sponsored by Jimmy Skipper that provided for a sales tax exemption for sales of products directly from the farms
· 1997, there were 17,134 acres in sod, with $52.1m in sales
· 2007, after exemption approved, 41,257 acres in sod with $131.2m in sales
· Hundreds of jobs created
· Said mowers not exempt from sales tax paid by sod growers, should be
14. Ruth Brenner, Mayor of the City of Gainesville offered the following:
· Said she agreed with others spokesmen for local governments
· Spoke in favor of local collection of sales tax
· Spoke in favor of MOST (Municipal Option Sales Tax) without legislative authorization
· Spoke against sales tax exemption
15. Pam Norman, an individual citizen offered the following:
· Thinks state government does a lot it should not do
· In favor of a “fair tax” plan
· State should rely solely on a sales tax
16. David Lott, a recent graduate of Gainesville State College offered the following:
· Supports a “fair tax” plan
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