TAX NEWS - JUNE 2010

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Georgia Tax: Perdue to decide on two major tax bills

Outgoing Georgia Gov. Sonny Perdue on Tuesday will put his final stamp on legislation passed during the 2010 General Assembly session.

Perdue, who is leaving office at the end of the year, has until Tuesday to sign or veto legislation. His office will release his decision on dozens of bills, including the upcoming fiscal year's $17.9 billion budget and gun and tax legislation.

The governor's office doesn't reveal in advance whether he's leaning toward signing or vetoing any legislation. However, conservative groups were putting some last-minute pressure on him Monday to sign two bills aimed at cutting government spending.

One would require state agencies to essentially write their budgets from scratch and justify everything they want to spend. Another would require state agencies to come under periodic review to determine whether they should exist or be eliminated or merged with other agencies.

Conservative activists are worried he will veto the bills.

A group called the Conservative Leadership Coalition held a statehouse news conference Monday calling on supporters to call the governor's office about the bills.

"This is a legacy issue for the governor. This will leave a strong legacy of good government for Governor Perdue," said Tricia Pridemore, who leads a 912 Project small-government group.

Calvin Rhodes, an east Cobb County legislative candidate and conservative activist, said, "I'm confused at the moment why the governor would not be supporting such bills that bring more oversight, more transparency to the governing process."

Perdue will also decide on two gun bills. One is an overhaul of the state's laws applying to weaponry and public gatherings. Among other things, it would permit people with concealed weapons permits to carry guns at airport pick-up and drop-off points. The other would permit the carrying of licensed weaponry in any airport areas that aren't covered by federal restrictions.

In addition, Perdue will decide on two major tax bills. One would cut in half the tax on long-term capital gains, such as stocks and bonds. The move would save investors -- and cost the state -- about $340 million a year when fully implemented. The bill also would provide a tax break for investors willing to put up the money for certain small startup businesses.

The other bill would eliminate $26 to $52 in annual tax credits to hundreds of thousands of Georgians who have no taxable income. The credits were designed about two decades ago to partially reimburse the poor for state sales taxes they pay. The AARP has lobbied Perdue to veto the bill because many seniors get the tax credit. Supporters of the legislation call the tax credit a form of income redistribution. Eliminating the credits would save the state about $22 million.

Finally, Perdue will sign the budget that will take effect July 1. The measure includes loads of spending cuts and about $1 billion in construction projects, some of which Perdue may veto.
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