House Bill 237

Chair's Name: Larry O’Neal

Committee: Ways & Means

House Sponsor: Chuck Martin

Chairman O’Neal’s opinion of this legislation:

HB 237 changes language providing a sales tax exemption for the sale of certain manufacturing machinery to clarify what the exemption will include and to broaden this exemption from machinery “used directly in” manufacturing to machinery and equipment that is “necessary and integral to” the manufacturing. Revenue has difficulty auditing whether machinery is “used directly in” the manufacturing process.  The language “necessary and integral to” is used in other states, and will allow manufacturers to exempt machinery and equipment that is required to manufacture the product, but that may not come into direct contact with the product as it moves through the manufacturing process.

This Legislation:

•        Reduces the Size of Government by making the auditing process less time consuming for the Department of Revenue thus less expensive to Georgia taxpayers.

•        Strengthens our Traditional Family Structure  by retaining manufacturing jobs in Georgia, which will allow our citizens to support their families

•        Reduces the Tax Burden on our manufacturers, which provide jobs to our citizens, and will attract future significant business investment in Georgia.

•        Increases Personal Responsibility by clarifying ambiguities in current law so that taxpayers will have more certainty and predictability in the business cycle and the tax compliance burden will be lessened.

This bill passed the House under the Structured Rule.

Further Action

The Senate changed the effective date of the act to “January 1, 2009” from “July 1, 2008”. The date regarding tax, penalty, and interest liability and refund eligibility is also changed to January 1, 2009 from July 1, 2008. The House agreed to the Senate Substitute because the new dates are the earliest dates where the DOR could comply.