Bill offers tax relief for small businesses

Ashley Speagle

Correspondent

ATLANTA -- An eight-step plan for job and business growth in Georgia will return millions of dollars to small businesses, state Rep. Tom Graves said Thursday

Rep. Graves said his proposed Jobs, Opportunity and Business Success Act of 2010, based on a version from last session that the governor vetoed, includes new proposals to give tax credits to investors in small businesses and to reduce the capital gains tax by 50 percent.

"This will encourage new business startups and more business development in Georgia," Rep. Graves said at a news conference in a legislative building across from the Capitol.

Rep. Graves said he expects his proposal to be introduced in the General Assembly on Monday as House bills 1023 and 1024.

Gov. Sonny Perdue's spokesman, Bert Brantley, said the projected small growth in revenue under the legislation, coupled with a loss of tax money in the bill, means the cost would outweigh any economic growth.

Gov. Perdue recently proposed slashing $1.2 billion from the state's $18.6 billion budget. Georgia's unemployment rate in December was 10.3 percent, figures show.

Rep. Graves said his plan will stimulate the economy by attracting new businesses to Georgia and by creating jobs through tax credits, cuts and incentives. President Barack Obama also advocated tax credits for small-business hiring and other incentives in his State of the Union speech Wednesday night.

In Rep. Graves' bills, investors in small business would receive 50 percent of their investment back after two years as an "angel investor" tax credit, Rep. Graves said. The state would limit these credits to about $10 million per year total, he said.

The bill includes elements from last session with some tweaks, including eliminating state fees for new businesses, giving tax credit to companies that hire previously unemployed workers and eliminating the net worth tax, Rep. Graves said.

He would not offer an estimated cost of the bill but said the most expensive piece would be the elimination of fees for start-up companies. He said phasing out sales tax deposits would return nearly $200 million to small businesses alone.

"We see it as a savings to the customers," he said.

JOBS Act of 2010 Eight-Step PlanHB 1023 would:* Eliminate state fees for start-up companies.* Award 50 percent of investments in small businesses back to investors.* Award quarterly credits toward unemployment insurance tax to companies that hire previously unemployed workers.* Award $2,400 tax credit to companies that hire previously unemployed workers and employ them for at least two years.* Eliminate the net worth tax.* Trigger a statewide 50 percent reduction in the capital gains tax.HB 1024 would:* Gradually eliminate sales tax deposits for small businesses.

Rep. Graves said the bill failed last year in part because an estimate from the governor's office indicated the bill would have cost the state $1 billion in lost tax revenue. Last year's bill included a proposal to phase out the corporate income tax, which is estimated to raise about $580 million this year.

That proposal wasn't mentioned Thursday.

Lawmakers at the news conference said job growth will bring in much-needed revenue.

"You can't collect tax on the unemployed," said Sen. Tommie Williams, R-Lyons.

Rep. Graves is a candidate for the 9th Congressional District seat in Northwest Georgia held by U.S. Rep. Nathan Deal, R-Ga., who is running for governor.

Ashley Speagle covers the Georgia legislature. Contact her at speagle.ashley@gmail.com.

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