Georgia bills in advance on Kemp income tax and gas tax relief

By JEFF AMY, Associated Press

ATLANTA (AP) – Two more parts of Gov. Brian Kemp’s tax cut agenda are moving forward in the State House.

The Ways and Means Committee of the House of Representatives on Thursday voted to pass bills that would net taxpayers an additional $1 billion in tax refunds and ratify the Republican governor’s decision to waive taxes on gasoline and diesel for months .

Kemp also plans a $1 billion property tax break to be pushed ahead as part of the amended budget for this year. Both the income tax and property tax refunds were important commitments made by Kemp in his successful re-election campaign last year.

House Bill 162 calls for income tax returns for a second straight year. It would provide reimbursements of up to $250 to single adults, up to $375 to single adults running a household with dependents, and up to $500 to married couples applying together. The refund would only be paid to people who filed tax returns for both tax years 2021 and 2022, and no one can get back more than they paid in state income taxes in 2021.

Rebates or credits would be issued in the spring when the bill is passed. They would automatically apply to anyone filing a tax return for 2021 and 2022, with no further action required. People who do not owe state income taxes, including many retirees, would not get any money.

“The governor has a duty to the people of Georgia, and this is a way to give them their money back,” said Rep. Lauren McDonald, a Cumming Republican.

The IRS announced last week that Georgia’s 2022 refund checks will not be treated as taxable income for people who now pay federal income taxes when taking the standard deduction. Most people take the standard deduction. Individuals listing returns may be required to pay federal income taxes on the state refund.

Kemp can demand rebates for another year because the treasury continues to overflow. Georgia ended its most recent fiscal year with $6.6 billion in excess income in the bank, even after the state’s Rainy Day Fund was filled to its legal limit of $5.2 billion. Fiscal projections released in January show that revenue collections are expected to end current fiscal year 2023 by $2.4 billion over original projections.

Last year’s discount and promise of more money were key features of Kemp’s victories over Republican main challenger David Perdue and Democrat Stacey Abrams.

The committee also approved House Resolution 66, which ratified Kemp’s decision to further extend what was originally legislated as a six-week holiday on gasoline and diesel taxes last spring. Through a series of executive orders, Kemp delayed that extension beyond his re-election date until early January. Such a move is legal as long as lawmakers agree to it at their next meeting.

“The governor’s actions brought much-needed relief to Georgians at the gas pump,” said Rep. Matthew Gambill, a Cartersville Republican and leader of the Kemp parliamentary group.

The fuel tax suspension cost the state an estimated $1.7 billion in lost revenue over parts of two fiscal years. The state has already used its surplus to make up $600 million in lost revenue for fiscal 2022. Officials estimate they will use $1.1 billion in other tax revenue from the current fiscal year to keep the road construction funds going.

Money for Kemp’s $1 billion property tax relief plan would also come from the current year’s budget, with Kemp saying taxpayers would receive about $500 from the state with exemptions for homesteads.

That means only the $1 billion in income tax refunds would come out of the accumulated $6.6 billion in cash, meaning Georgia could start its next fiscal year with $5 billion in excess cash.