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Posted: September 13, 2012 8:16 p.m.

Officials discuss excise tax

County and city officials met Tuesday afternoon to discuss whether or not Newton County would levy a local excise tax on energy used in manufacturing.

Counties in Georgia have until Jan. 1, 2013 to decide if their cities will participate in the new excise tax, which was passed into legislation by the Georgia General Assembly in January.

Covington City Manager Steve Horton said city and county officials discussed if they would levy the excise tax, but no decision was made on if the city or county would participate in the tax at their meeting. If the city decided to participate in the tax, they would get a share of the revenues collected.

A document from the Association County Commissioners of Georgia said the local excise tax on energy used in manufacturing is an optional local tax designed to replace the local sales tax revenues lost to the new statewide sales tax exemption on energy used in manufacturing beginning Jan. 1, 2013.

The tax should not be considered a new tax but rather a method of replacing local sales tax revenues, according to the document. The new sales tax exemption and the imposition of the new excise tax are proportionately phased in over a four year period.
County Manager John Middleton told county commissioners at their Sept. 4 meeting that the county was given a Sept. 1 deadline to inform the city of a meeting to discuss the proposed excise tax and that they had to meet within 10 days of the notice of the meeting.
The meeting also had to be at least 30 days prior to the adoption of the ordinance to levy the excise tax.

County Chairman Kathy Morgan and Middleton told the board of commissioners that there was no way to see how the excise tax would affect the county when it came to losing or gaining revenue from energy sales taxes.

"There is no definitive information available from the Department of Revenue regarding the impact on the 159 counties in the state of Georgia," Middleton said. "I'm not sure how the decision got made. I think it's certainly an economic development edge type of decision, but it would be nice to have those numbers to know what you're working with."

According to the Georgia Chamber of Commerce, which supports the legislation, Georgia is the only state in the Southeast and one of only 10 states in the nation that imposes a sales tax energy used by manufacturers. Tennessee, South Carolina, North Carolina and Alabama have all passed legislation to phase out the tax, which the GCC said is "giving our neighboring states a clear competitive advantage in attracting new manufacturing business while making Georgia vulnerable to losing manufactures."

According to ACCG, if the county decides to levy the tax, the revenues collected can be used for in the general fund for any purpose. The county may also use a portion of the revenues in their SPLOST account, but it is not required to do so.

The tax can be terminated at any time by ordinance of the county governing authority.

 

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