ALBANY – Business sales tax records will become a little more transparent for Albany finance officials as they take advantage of a law passed last year allowing them to see the amount of sales tax dollars reported to the Georgia Department of Revenue.
Prior to the implementation in July of Senate Bill 371, approved last year and signed by Gov. Brian Kemp, local governments received no information on sales and use taxes collected by vendors, city Finance Director Derrick Brown said.
The Albany City Commission on Tuesday authorized Brown to request those records for the city’s fiscal year of July 1, 2018-June 30, 2019.
“At least it’s a start,” Brown said of the law. “Up until two years ago, I could not tell you who had paid sales taxes and how much, and who had not,” he said.
The law also allows the city to seek additional information about up to 10 businesses for that period.
That would allow the city to, for example, request additional information about an existing business that is not submitting sales taxes to the Revenue Department.
The city, the Dougherty County government and the Dougherty County School Board collect a combined 4 percent on purchases.
Those include a penny each for the local-option sales tax split at a rate of 60 percent for the city and 40 percent for the county, special-purpose local-option sales tax with a 64 percent/36 percent split between the city and county, transportation special-purpose local-option sales tax with a 67 percent/33 percent split and the education local-option sales tax earmarked for the school system.
The state collects an additional 4 percent on most goods and services purchases, for a combined 8 percent sales tax.
Brown said he has no idea whether there is widespread avoidance of submitting sales taxes owed to state and local governments.
“It is so difficult to tell without having any data,” he said. “It is difficult to tell if there are large omissions or not. You’ve got to assume there is some loss, we just don’t know how much it is.”
Since the Great Recession of 2009, which caused a dramatic drop in sales tax collections, subsequent recovery sales tax collections have not improved appreciably until early this year, Brown said.
With the collection of sales taxes on some internet-based sales originating in other states, there has been some improvement.
“That’s probably the first time in 10 years we’ve seen (tax collections increase),” Brown said.
“Before that it had been on a decline. It does correspond with when that law went into effect, so we do assume it has something to do with that.”