Georgia lawmakers put state’s tax credits under new scrutiny | Georgia

(The Center Square) — State-sponsored tax credits are under greater scrutiny this off-session as state lawmakers wonder if to redesign or take away one of the most incentives they provide to corporations.

“Government shouldn’t be picking winners and losers,” Nick Stark, director of the duty power on tax and monetary coverage on the American Legislative Exchange Council, instructed lawmakers throughout a Joint Tax Credit Review Panel listening to this week.

“The tax code should be complementary; it should maintain a healthy relationship between the state and local government,” Stark added. “The state should always be mindful of how its decisions affect local government and make sure that the two are not working against each other. It should be competitive. …It should foster more economic growth in your state. Typically, that’s done through lower tax burdens that generate more economic activity.”

Georgia provides an array of tax credits, starting from the much-ballyhooed credit to draw movie manufacturing to credits Peach State politicos tout each time a trade relocates to the state. Economic officers are reticent to expose or talk about the worth of the state’s incentives to non-public companies.

“Tax incentives are something that get a lot of play in the media; they are constantly talked about,” Alison Wakefield, a supervisor of the Pew Charitable Trusts’ paintings on financial construction, instructed state lawmakers.

“They are one of the primary tools that economic developers have in their toolbox to strengthen their state’s economies,” Wakefield added. “They’re also quite costly — in the billions of dollars collectively across the United States — and it’s rising over time, as is the size of the average incentive package.”

Wakefield mentioned Pew recommends comparing the associated fee and different financial phrases as a “proven way to improve the effectiveness of tax incentives.”

One of the questions dealing with lawmakers is the so-called “but-for,” successfully whether or not corporations would have situated to the Peach State even with out incentives.

“The great value of our tax system is that it’s pro-business and pro-investment, but it’s also stable and predictable,” Clay Jones, vice chairman and normal recommend for the Georgia Association of Manufacturers, instructed lawmakers.

“If you took it away, or you made it uncompetitive, then all of a sudden, you’ve unleveled the playing field, and I guarantee you it might not have been the one reason they chose to come, but it might be the reason they choose not to,” Jones added. “So, we encourage you to continue to keep things stable and predictable for our manufacturers.”