ALBANY, Ga. — As Dougherty County and Albany officials ponder a new state law that will allow each county to “impose” a local excise tax on energy used in manufacturing as early as the start of the new year, Dougherty County Commission Chairman Jeff Sinyard said Monday the state made an unfortunate choice of wording in passing the law.
“I wish that the state had talked about a ‘continuance’ or a ‘discontinuance’ of a tax already in place rather than indicating we would be imposing a new tax,” Sinyard said. “This new law is about continuing (local-option and special-purpose local-option) taxes already in place.”
Dave Wills, a former Webster County official and the government relations manager for the Association County Commissioners of Georgia, addressed a called joint meeting of the Dougherty and Albany City commissions Monday to address House Bill 386, which will eliminate a 4 percent state tax on energy used in manufacturing over the next four years.
Wills said ACCG-led intervention altered the bill that originally would have eliminated the 4 percent state tax as well as 1 percent local SPLOST and LOST taxes to provide counties with an option. Each county may “impose” an excise tax that will, essentially, keep the 2 percent combined SPLOST and LOST taxes in place.
Georgia is one of 11 states — and the only one in the Deep South — to impose the energy tax that has been called a detriment to economic development in the state. The Legislature passed HB 386, which will phase out the 4 percent tax by 1 percent a year over the next four years, during the 2012 legislative session.
“Keep in mind, in the initial draft of this bill, there was no option for this excise tax,” Wills said. “The intent was to get rid of all 6 percent (minus the 1 percent education SPLOST approved in Dougherty and many other counties), so you guys probably owe at least a small word of thanks (to ACCG officials) for this opportunity.
“And you must also keep in mind that many people, when they think of manufacturing, they think of Procter & Gamble and MillerCoors, but this law applies to anybody who manufactures tangible personal property. The definition in the law of who qualifies is very broad, and anything used as a power source is subject to the exemption. Further, there is no oversight mechanism in place; this will be self-reported.”
Wills further explained that the excise tax option is solely a county tax, but each municipality located within the county has an opportunity to enter into an intergovernmental agreement to share the excise tax money based on LOST and SPLOST splits within each county. If, for instance Dougherty County officials decided not to approve the tax, the city would have an option of passing it.
If one chooses not to participate in collections, all of the money would go to the entity that did pass it.
“If I understand this correctly, if we enter into an agreement with the county and they pass this measure, half of the money collected would be divided based on our 60-40 LOST split and the other half on our 65-35 SPLOST split,” City Commissioner Bob Langstaff said.
Sinyard said that while there is no accurate method of determining the amount that might be collected from the excise tax, the county’s best guess is a sum between $1.5 million and $2 million.
“As you consider this, remember that the community overwhelmingly supported the last SPLOST referendum, and LOST was voted on by our citizens years ago,” County Administrator Richard Crowdis said. “(Not collecting the local excise tax) is like another entity (the state) coming in and doing away with something that was approved by your voters. (Approving the tax) allows you to exercise your local option.”
Wills said the county cannot approve the local excise tax before 30 days from Monday’s meeting, but that if it chooses to do so it will still have time to implement the measure before Jan. 1. The city and county would have to sign off on an intergovernmental agreement before the 30-day period (Nov. 15), and then the county would have to notify energy providers of the law.
“Before this is done, I’d like for us to invite members of our legislative delegation to meet with us to get their rationale for (approving HB 386),” City Commissioner Jon Howard said. “Did they rubber-stamp this at the 11th hour? Did they vote for it or against it? I think we should know these things.”