It’s one of the more obscure ballot measures Georgia voters will decide this year, but it could matter a lot to small businesses across the Peach State. Clocking in at just 19 words, the question for ‘Georgia Referendum A’ is simple:
Do you approve the Act that increases an exemption from property tax for all tangible personal property from $7,500.00 to $20,000.00?
A “yes” vote supports the exemption increase, a “no” vote keeps the exemption limit at $7,500. But what is property tax for tangible personal property?
It’s an annual tax that counties levy on their assessment of what “stuff” a business owns — from equipment to inventory. The property tax applies to any business operating with a Georgia business license, and covers equipment or other personal and professional items. It doesn’t include motor vehicles, trailers or mobile homes.
Basically, right now if you have $7,500 or less of “stuff,” in your business, you don’t get taxed on it, due to the current exemption.
But that $7,500 threshold hasn’t changed since the exemption was first passed into law in 2002. Raising the limit to $20,000 is to account for inflation, said Hunter Loggins, the Georgia director for the National Federation of Independent Businesses, a small-business advocacy group that supports the measure.”Nowadays, with inflation, $7,500 could mean a desk and two chairs. You know, that’s really nothing,” he said.
Businesses are still required to report the total value of their “stuff” to county tax officials to prove they meet the exemption requirement, but the intention is to reduce financial burden on small businesses, Loggins said.
The measure made it onto the ballot as House Bill 808, which passed the Georgia House of Representatives by a vote margin of 125-42. All House Republicans supported the measure, as did 28 House Democrats. The measure passed the State Senate with unanimous support from both parties.
The Georgia Municipal Association (GMA) opposes the measure, because it would reduce the amount of personal property taxes collected. In a statement to Atlanta Civic Circle it said, “GMA opposed the increase in personal property exemption under HB 808, because it will decrease the sources of tax revenue available to cities to pay for public services.”
Each county determines how to spend this tax revenue, but typically it contributes to general funds for schools, roads and municipalities in the county.
Loggins said personal property tax collections account for about 15% of a county’s tax base, and that raising the exemption threshold to $20,000 would hardly cut into that margin.
He believes the tax break would give small businesses more money to invest in themselves and generate economic activity, a “knock on effect” that would compensate for the lost tax revenue.
