The House of Representatives of the Georgia General Assembly (the "House") passed a bill on March 5, 2015 known as the Transportation Funding Act of 2015 or House Bill 170 ("HB 170") to address critical transportation needs in the State of Georgia (the "State"). Following, a conference committee was appointed and subsequently the conference committee report was adopted and HB 170 was sent to and signed by the Governor.
The general provisions of HB 170 will allow cities, counties and schools, by referendum (for a maximum of 20 quarters), to continue to collect all local sales taxes at their current 1% rate on the sale of motor fuel. Beginning July 1 of this year (2015), local sales taxes may only be collected on the sale of motor fuel up to $3.00 per gallon. Any retail price above $3.00 per gallon would not be subject to any local sales taxes. While HB 170 phases out the State's 4% tax on gas, it raises the excise tax to 26 cents per gallon of gasoline, the collection of which will be dedicated to transportation funding. HB 170 authorizes a designated region to self-start the process for the collection of a transportation special purpose local option sales tax ("TSPLOST") for transportation purposes by adopting a resolution from a majority of the counties (and obtaining a successful referendum vote of the requisite counties) located within the region and allows for the rate to be a fractional rate of 0.05% up to a maximum rate of 1.0%. Beginning in July of 2017, any county not currently in a designated region, may impose a single county TSPLOST at a fractional rate of 0.05% up to a maximum rate of 1.0% for a period not to exceed five years. Those counties in the metro Atlanta region, may impose the single county TSPLOST beginning July 2015.
The change to the motor fuel tax structure will undoubtedly have the biggest impact on transportation funding, however, HB 170 also includes some other provisions: (i) creates up to $100 fee on heavy trucks, depending on their weight; (ii) eliminates the $5,000 state income tax credit to buy an electric vehicle; (iii) owners of total-electric cars will pay a $200 annual fee and $300 for commercial vehicles; (iv) adds an additional $5.00 per night hotel/motel tax statewide dedicated to transportation; and (v) removes a $23 million annual tax break for Delta Airlines on their fuel. This reshaping of the way the State funds transportation projects is expected to raise more than $900 million and benefit much of the needed highways and neighborhoods needing better transportation infrastructure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
