Conyers city council members are considering imposing an excise tax on energy consumed by local manufactures following the state's decision to eliminate sales tax on energy consumption by manufacturers beginning next year.
The 2012 state legislature passed a law eliminating the 7 percent sales tax paid on energy consumed by manufacturers starting January 1, 2013. Of the 7 percent sales tax manufacturers currently pay on energy consumption, 4 percent goes to the state, 2 percent is received locally and 1 percent is paid to the school board.
Since the state will cease collection of the energy tax, the city and county seperatley have the option of imposing an excise tax on energy consumption to compensate for the discontinuation of sales tax revenue locally. If an excise tax is not imposed, local governments are facing immeasurable revenue shortages, a figure which will take a year to fully realize.
City council members opted to postpone a vote on the issue during their meeting Wednesday night after expressing concerns over the possibility of alienating existing manufacturers and losing a competitive edge over cities that are opting not to enforce an excise tax to replace the sales tax.
"Theoretically the staff could undertake an investigation, if local manufacturing would cooperate, and get some idea of what they think they are spending on energy use and manufacturing and that would at least give you some idea as to what the impact of implementing this ordinance would be," City Attorney Michael Waldrop told the council. He further explained that not implementing an excise tax equivalent to the city's current share of the sales tax may lead to a cut in services or an increase in taxes to replace the revenue provided to the city by the energy tax.
If imposed, the excise tax will be phased in over a four-year period and will be collected by the service providers.
City manager Tony Lucas said the Georgia Municipal Association is encouraging cities to impose an excise tax and an ordinance doing so must be adopted by the end of the year or the city will have to wait until 2014 to impose the tax. Lucas said he believes Rockdale County is leaning towards not imposing an excise tax and the same is true of Newton County.
The council decided to attempt to collect figures to assess the impact of enforcing an excise tax versus not imposing the tax before voting on the issue.
"Whatever it takes to get jobs today, we don't want to lose that competitive edge," Conyers Mayor Randy Mills said Wednesday. "I want to get as many numbers as we can and mull it over (before taking action)."