Bill Text: GA HB1082 | 2009-2010 | Regular Session | Introduced
Bill Title: Ad valorem tax exemptions; freeport exemptions; revise provisions
Spectrum: Moderate Partisan Bill (Republican 6-1)
Status: (Vetoed) 2010-06-04 - Veto V10 [HB1082 Detail]
Download: Georgia-2009-HB1082-Introduced.html
10 LC 18
8821/AP
House
Bill 1082 (AS PASSED HOUSE AND SENATE)
By:
Representatives Powell of the
171st,
Lindsey of the
54th,
Williams of the
4th,
Black of the
174th,
Meadows of the
5th,
and others
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Part 1 of Article 2 of Chapter 5 of Title 48 of the Official Code of
Georgia Annotated, relating to ad valorem tax exemptions, so as to revise and
change certain provisions regarding applications for, waiver of, denial of,
renewal of, and granting of freeport exemptions; to provide for level 1 and
level 2 freeport exemptions; to provide for applicability to business inventory;
to provide for procedures, conditions, and limitations; to provide an effective
date; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Part
1 of Article 2 of Chapter 5 of Title 48 of the Official Code of Georgia
Annotated, relating to ad valorem tax exemptions, is amended by revising Code
Section 48-5-48.1, relating to freeport exemption applications, waivers,
denials, and renewals, as follows:
"48-5-48.1.
(a)
Any person, firm, or corporation seeking
an
a level 1
freeport exemption from ad valorem
taxation of certain tangible personal property inventory when such exemption has
been authorized by the governing authority of any county or municipality after
approval of the electors of such county or municipality pursuant to the
authority of the Constitution of Georgia or Code Section 48-5-48.2 shall file a
written application and schedule of property with the county board of tax
assessors on forms furnished by such board. Such application shall be filed in
the year in which exemption from taxation is sought no later than the date on
which the tax receiver or tax commissioner of the county in which the property
is located closes
his
the
books for the return of taxes.
(b)
The application for the
tangible
personal property inventory
level 1
freeport exemption shall provide
for:
(1)
A schedule of the inventory of goods in the process of manufacture or production
which shall include all partly finished goods and raw materials held for direct
use or consumption in the ordinary course of the taxpayer's manufacturing or
production business in the State of Georgia;
(2)
A schedule of the inventory of finished goods manufactured or produced within
the State of Georgia in the ordinary course of the taxpayer's manufacturing or
production business when held by the original manufacturer or producer of such
finished goods; and
(3)
A schedule of the inventory of finished goods which on January 1 are stored in a
warehouse, dock, or wharf, whether public or private, and which are destined for
shipment outside the State of Georgia and the inventory of finished goods which
are shipped into the State of Georgia from outside this state and which are
stored for transshipment to a final destination outside this state. The
information required by Code Section 48-5-48.2 to be contained in the official
books and records of the warehouse, dock, or wharf where such property is being
stored, which official books and records are required to be open to the
inspection of taxing authorities of this state and political subdivisions
thereof, shall not be required to be included as a part of or to accompany the
application for such exemption.
(c)(1)
For purposes of this subsection, the term 'file properly' shall mean and include
the timely filing of the application and complete schedule of the inventory for
which exemption is sought on or before the due date specified in subsection (a)
of this Code section.
(2)
The failure to file properly the application and schedule shall constitute a
waiver of the exemption on the part of the person, firm, or corporation failing
to make the application for such exemption for that year as
follows:
(A)
The failure to report any inventory for which such exemption is sought in the
schedule provided for in the application shall constitute a waiver of the
exemption on the part of the person, firm, or corporation failing to so report
for that taxable year in an amount equal to the difference between fair market
value of the inventory as reported and the fair market value finally determined
to be applicable to the inventory for which the exemption is sought;
and
(B)
The failure to file timely such application and schedule shall constitute a
waiver of the exemption until the first day of the month following the month
such application and schedule are filed properly with the county tax assessor;
provided, however, that unless the application and schedule are filed on or
before June 1 of such year, the exemption shall be waived for that entire
year.
(d)
Upon receiving the application required by this Code section, the county board
of tax assessors shall determine the eligibility of all types of tangible
personal property listed on the application. If any property has been listed
which the board believes is not eligible for the exemption, the board shall
issue a letter notifying the applicant that all or a portion of the application
has been denied. The denial letter shall list the type and total fair market
value of all property listed on the application for which the exemption has been
approved and the type and total fair market value of all property listed on the
application for which the exemption has been denied. The applicant shall have
the right to appeal from the denial of the exemption for any property listed and
such appeal shall proceed as provided in Code Section 48-5-311. Except as
otherwise provided in subparagraph (c)(2)(A) of this Code section, the county
board of assessors shall not send a second letter of notification denying the
exemption of all or a portion of such property listed on the application on new
grounds that could and should have been discerned at the time the initial denial
letter was issued.
(e)
If the
tangible
personal property inventory
level 1
freeport exemption has been granted to a
taxpayer for a taxable year, the county board of tax assessors shall issue a
notice of renewal to the taxpayer for the immediately following taxable year.
Such notice of renewal shall be issued not later than January 15 of such
immediately following taxable year to facilitate the filing of a timely
application and schedule by the taxpayer for such taxable
year."
SECTION
2.
Said
part is further amended by revising Code Section 48-5-48.2, relating to the
freeport exemption, as follows:
"48-5-48.2.
(a)
This Code
section shall be known and may be cited as the 'Level 1 Freeport
Exemption.'
(b)
As used in this Code section, the term:
(1)
'Destined for shipment to a final destination outside this state'
includes
means, for
purposes of a level 1 freeport exemption,
that portion or percentage of an inventory of finished goods which the taxpayer
can establish, through a historical sales or shipment analysis, either of which
utilizes information from the preceding calendar year, or other reasonable,
documented method, is reasonably anticipated to be shipped to a final
destination outside this state. Such other reasonable, documented method may
only be utilized in the case of a new business, in the case of a substantial
change in scope of an existing business, or in other unusual situations where a
historical sales or shipment analysis does not adequately reflect future
anticipated shipments to a final destination outside this state. It is not
necessary that the actual final destination be known as of January 1 in order to
qualify for the exemption.
(2)
'Finished goods'
shall
mean
means, for
purposes of a level 1 freeport exemption,
goods, wares, and merchandise of every character and kind but shall not include
unrecovered, unextracted, or unsevered natural resources or raw materials or
goods in the process of manufacture or production or the stock in trade of a
retailer.
(3)
'Raw materials'
shall
mean
means, for
purposes of a level 1 freeport exemption,
any material, whether crude or processed, that can be converted by manufacture,
processing, or a combination thereof into a new and useful product but shall not
include unrecovered, unextracted, or unsevered natural resources.
(4)
'Stock in trade of a retailer'
means, for
purposes of a level 1 freeport exemption,
finished goods held by one in the business of making sales of such goods at
retail in this state, within the meaning of Chapter 8 of this title, when such
goods are held or stored at a business location from which such retail sales are
regularly made. Goods stored in a warehouse, dock, or wharf, including a
warehouse or distribution center which is part of or adjoins a place of business
from which retail sales are regularly made, shall not be considered stock in
trade of a retailer to the extent that the taxpayer can establish, through a
historical sales or shipment analysis, either of which utilizes information from
the preceding calendar year, or other reasonable, documented method, the portion
or percentage of such goods which is reasonably anticipated to be shipped
outside this state for resale purposes.
(b)(c)
The governing authority of any county or municipality may, subject to the
approval of the electors of such political subdivision, exempt from ad valorem
taxation, including all such taxes levied for educational purposes and for state
purposes, all or any combination of the following types of tangible personal
property:
(1)
Inventory of goods in the process of manufacture or production which shall
include all partly finished goods and raw materials held for direct use or
consumption in the ordinary course of the taxpayer's manufacturing or production
business in this state. The exemption provided for in this paragraph shall apply
only to tangible personal property which is substantially modified, altered, or
changed in the ordinary course of the taxpayer's manufacturing, processing, or
production operations in this state. For purposes of this paragraph, the
cleaning, drying, pest control treatment, or segregation by grade of grain,
peanuts or other oil seeds, or cotton shall constitute substantial modification
in the course of processing or production operations. For purposes of this
paragraph, remanufacture of aircraft engines or aircraft engine parts or
components shall constitute manufacturing operations in this state.
Remanufacture of aircraft engines or aircraft engine parts or components means
the substantial overhauling or rebuilding of aircraft engines or aircraft engine
parts or components;
(2)
Inventory of finished goods manufactured or produced within this state in the
ordinary course of the taxpayer's manufacturing or production business when held
by the original manufacturer or producer of such finished goods. The exemption
provided for in this paragraph shall be for a period not exceeding 12 months
from the date such property is produced or manufactured; or
(3)
Inventory of finished goods which, on January 1, are stored in a warehouse,
dock, or wharf, whether public or private, and which are destined for shipment
to a final destination outside this state and inventory of finished goods which
are shipped into this state from outside this state and stored for transshipment
to a final destination outside this state. The exemption provided for in this
paragraph shall be for a period not exceeding 12 months from the date such
property is stored in this state. Such period shall be determined based on
application of a first-in, first-out method of accounting for the inventory. The
official books and records of the warehouse, dock, or wharf where such property
is being stored shall contain a full, true, and accurate inventory of all such
property, including the date of the receipt of the property, the date of the
withdrawal of the property, the point of origin of the property, and the point
of final destination of the same, if known. The official books and records of
any such warehouse, dock, or wharf, whether public or private, pertaining to any
such property for which a freeport exemption has been claimed shall be at all
times open to the inspection of all taxing authorities of this state and of any
political subdivision of this state.
(c)(d)
Whenever the governing authority of any county or municipality wishes to exempt
such tangible property from ad valorem taxation, as provided in this Code
section, the governing authority thereof shall notify the election
superintendent of such political subdivision, and it shall be the duty of said
election superintendent to issue the call for an election for the purpose of
submitting to the electors of the political subdivision the question of whether
such exemption shall be granted. The referendum ballot shall specify as separate
questions the type or types of property as defined in this Code section which
are being proposed to be exempted from taxation. The election superintendent
shall issue the call and shall conduct the election on a date and in the manner
authorized under Code Section 21-2-540.
(d)(e)
The governing authority of any county or municipality wherein an exemption has
been approved by the voters as provided in this Code section may, by appropriate
resolution, a copy of which shall be immediately transmitted to the state
revenue commissioner, exempt from taxation 20 percent, 40 percent, 60 percent,
80 percent or all of the value of such tangible personal property as defined in
this Code section; provided, however, that once an exemption has been granted,
no reduction in the percent of the value of such property to be exempted may be
made until and unless such exemption is revoked or repealed as provided in this
Code section. An increase in the percent of the value of the property to be
exempted may be accomplished by appropriate resolution of the governing
authority of such county or municipality, and a copy thereof shall be
immediately transmitted to the state revenue commissioner, provided that such
increase shall be in increments of 20 percent, 40 percent, 60 percent, or 80
percent of the value of such tangible personal property as defined in this Code
section, within the discretion of such governing authority.
(e)(1)(f)(1)
If more than one-half of the votes cast on such question are in favor of such
exemption, then such exemption may be granted by the governing authority
commencing on the first day of any ensuing calendar year;
otherwise,
such exemption may not be granted. This paragraph is intended to clearly provide
that following approval of such exemption in such referendum, such exemption may
be granted on the first day of any calendar year following the year in which
such referendum was conducted. This paragraph shall not be construed to imply
that the granting of such exemption could not previously be delayed to any such
calendar year.
(2)
Exemptions may only be revoked by a referendum election called and conducted as
provided in this Code section, provided that the call for such referendum shall
not be issued within five years from the date such exemptions were first granted
and, if the results of said election are in favor of the revocation of such
exemptions, then such revocation shall be effective only at the end of a
five-year period from the date of such referendum.
(g)
Level 1 freeport exemptions effected pursuant to this Code section may be
granted either in lieu of or in addition to level 2 freeport exemptions under
Code Section 48-5-48.6.
(f)(h)
The commissioner shall by regulation adopt uniform procedures and forms for the
use of local officials in the administration of this Code
section."
SECTION
3.
Said
part is further amended by adding new Code sections to read as
follows:
"48-5-48.5.
(a)
Any person, firm, or corporation seeking a level 2 freeport exemption from ad
valorem taxation of certain tangible personal property inventory when such
exemption has been authorized by the governing authority of any county or
municipality after approval of the electors of such county or municipality
pursuant to the authority of the Constitution of Georgia and Code Section
48-5-48.6 shall file a written application and schedule of property with the
county board of tax assessors on forms furnished by such board. Such application
shall be filed in the year in which exemption from taxation is sought no later
than the date on which the tax receiver or tax commissioner of the county in
which the property is located closes the books for the return of
taxes.
(b)
The application for the level 2 freeport exemption shall provide for a schedule
of the inventory of finished goods held by one in the business of making sales
of such goods in this state.
(c)(1)
For purposes of this subsection, the term 'file properly' shall mean and include
the timely filing of the application and complete schedule of the inventory for
which exemption is sought on or before the due date specified in subsection (a)
of this Code section.
(2)
The failure to file properly the application and schedule shall constitute a
waiver of the exemption on the part of the person, firm, or corporation failing
to make the application for such exemption for that year as
follows:
(A)
The failure to report any inventory for which such exemption is sought in the
schedule provided for in the application shall constitute a waiver of the
exemption on the part of the person, firm, or corporation failing to so report
for that taxable year in an amount equal to the difference between fair market
value of the inventory as reported and the fair market value finally determined
to be applicable to the inventory for which the exemption is sought;
and
(B)
The failure to file timely such application and schedule shall constitute a
waiver of the exemption until the first day of the month following the month
such application and schedule are filed properly with the county tax assessor;
provided, however, that unless the application and schedule are filed on or
before June 1 of such year, the exemption shall be waived for that entire
year.
(d)
Upon receiving the application required by this Code section, the county board
of tax assessors shall determine the eligibility of all types of tangible
personal property listed on the application. If any property has been listed
which the board believes is not eligible for the exemption, the board shall
issue a letter notifying the applicant that all or a portion of the application
has been denied. The denial letter shall list the type and total fair market
value of all property listed on the application for which the exemption has been
approved and the type and total fair market value of all property listed on the
application for which the exemption has been denied. The applicant shall have
the right to appeal from the denial of the exemption for any property listed and
such appeal shall proceed as provided in Code Section 48-5-311. Except as
otherwise provided in subparagraph (c)(2)(A) of this Code section, the county
board of assessors shall not send a second letter of notification denying the
exemption of all or a portion of such property listed on the application on new
grounds that could and should have been discerned at the time the initial denial
letter was issued.
(e)
If the level 2 freeport exemption has been granted to a taxpayer for a taxable
year, the county board of tax assessors shall issue a notice of renewal to the
taxpayer for the immediately following taxable year. Such notice of renewal
shall be issued not later than January 15 of such immediately following taxable
year to facilitate the filing of a timely application and schedule by the
taxpayer for such taxable year.
48-5-48.6.
(a)
This Code section shall be known and may be cited as the 'Level 2 Freeport
Exemption.'
(b)
As used in this Code section, the term 'finished goods' means, for purposes of a
level 2 freeport exemption, goods, wares, and merchandise of every
character and kind constituting a business's inventory which would not otherwise
qualify for a level 1 freeport exemption.
(c)
The governing authority of any county or municipality may, subject to the
approval of the electors of such political subdivision, exempt from ad valorem
taxation, including all such taxes levied for educational purposes and for state
purposes, inventory of finished goods.
(d)
Whenever the governing authority of any county or municipality wishes to exempt
such tangible property from ad valorem taxation, as provided in this Code
section, the governing authority thereof shall notify the election
superintendent of such political subdivision, and it shall be the duty of said
election superintendent to issue the call for an election for the purpose of
submitting to the electors of the political subdivision the question of whether
such exemption shall be granted. The referendum ballot shall specify retail
business inventory as the types of property as defined in this Code section
which are being proposed to be exempted from taxation. The election
superintendent shall issue the call and shall conduct the election on a date and
in the manner authorized under Code Section 21-2-540.
(e)
The governing authority of any county or municipality wherein an exemption has
been approved by the voters as provided in this Code section may, by appropriate
resolution, a copy of which shall be immediately transmitted to the state
revenue commissioner, exempt from taxation 20 percent, 40 percent, 60 percent,
80 percent or all of the value of such tangible personal property as defined in
this Code section; provided, however, that once an exemption has been granted,
no reduction in the percent of the value of such property to be exempted may be
made until and unless such exemption is revoked or repealed as provided in this
Code section. An increase in the percent of the value of the property to be
exempted may be accomplished by appropriate resolution of the governing
authority of such county or municipality, and a copy thereof shall be
immediately transmitted to the state revenue commissioner, provided that such
increase shall be in increments of 20 percent, 40 percent, 60 percent, or 80
percent of the value of such tangible personal property as defined in this Code
section, within the discretion of such governing authority.
(f)(1)
If more than one-half of the votes cast on such question are in favor of such
exemption, then such exemption may be granted by the governing authority
commencing on the first day of any ensuing calendar year; otherwise, such
exemption may not be granted. This paragraph is intended to clearly provide that
following approval of such exemption in such referendum, such exemption may be
granted on the first day of any calendar year following the year in which such
referendum was conducted. This paragraph shall not be construed to imply that
the granting of such exemption could not previously be delayed to any such
calendar year.
(2)
Exemptions may only be revoked by a referendum election called and conducted as
provided in this Code section, provided that the call for such referendum shall
not be issued within five years from the date such exemptions were first granted
and, if the results of said election are in favor of the revocation of such
exemptions, then such revocation shall be effective only at the end of a
five-year period from the date of such referendum.
(g)
Level 2 freeport exemptions effected pursuant to this Code section may be
granted either in lieu of or in addition to level 1 freeport exemptions under
Code Section 48-5-48.2.
(h)
The commissioner shall by regulation adopt uniform procedures and forms for the
use of local officials in the administration of this Code
section."
SECTION
4.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval.
SECTION
5.
All
laws and parts of laws in conflict with this Act are repealed.
