Online sales tax signed into law
Sen. Chuck Hufstetler, says the tax on third-party sales could raise $10 million a month.
ATLANTA — Gov. Brian Kemp has signed legislation imposing state sales taxes on online purchases facilitated by large retailers like Amazon, Google and Uber.
The tax is projected to raise hundreds of millions of dollars annually in Georgia.
Lawmakers in Georgia’s House and Senate hashed out a compromise measure early in this year’s legislative session to collect the tax from so-called “marketplace facilitators,” which allow third-party companies to conduct business on their websites.
The measure, House Bill 276, stalled in the Senate last year amid pushback from ride-share companies like Uber, which wanted a tax exemption. Lawmakers involved in negotiating the compromise bill expect separate legislation to be filed that would give Uber an exemption or require them to pay a fee.
Senate Finance Committee Chairman Chuck Hufstetler, R-rome, said state revenue experts estimate the tax could raise $10 million a month
— though he thinks that’s a conservative estimate.
“It’s great for cities, counties, schools and Georgia businesses that the playing field will be more level now,” Hufstetler said Thursday.
Floyd County Commission Chair Scotty Hancock agreed. “It’s going to be great for local businesses and the government,” he said.
While he characterized the measure as somewhat of a double edged sword — because online consumers may pay a little more — Hancock said local businesses will thrive.
A report last year from the advocacy group Faith, Truth and Justice Project estimated the tax could raise upwards of $750 million a year.
Kemp’s office confirmed Thursday that the governor had signed the bill. Tax collections will start April 1.
An Uber spokeswoman previously warned collecting the tax could hit Georgian rideshare users with higher trip costs and decrease earnings for drivers. The company prefers lawmakers institute a “reasonable fee structure” instead.
The bill’s passage comes as lawmakers look to fill a budget shortfall caused by sluggish state tax revenues and budget cuts that Kemp ordered for most state agencies. The online-sales tax marks the most significant revenue-raising effort to plug the state funding gap so far this legislative session.
Some lawmakers opposed passage of the bill over opposition to raising taxes. They favor lowering the state’s income-tax rate for a second time in the last three years. But several influential lawmakers, including Hufstetler, have sounded wary of lowering income taxes at a time when state budget cuts are being made.