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Council approves tax on energy

Businesses eligible for state reduction

POSTED: December 19, 2012 4:00 a.m.

The city of Dawsonville voted Monday night to allow a tax on energy consumed by manufacturing businesses.

Georgia repealed its sales and use taxes, but allowed local governments, both county and city, to set up their own in its place.

The removal of the taxes at the state level is part of a comprehensive tax reform approved during the 2012 General Assembly.

"The state allows the cities to re-enact the local portion of the sales tax so the city does not lose any money through the state's efforts to cut taxes on the state level," said City Attorney Kevin Tallant.

The tax will apply to all businesses that manufacture personal property, but does not affect service businesses.

"Manufacturers will still receive a tax cut overall," Tallant said. "The state is just allowing the city to use this tax so that local government does not lose revenue due to the state's efforts to reduce sales and use taxes."

According to Tallant, businesses still will get a tax break on state sales and use tax.

The local sales and use tax for Dawsonville is 2 percent due to LOST and SPLOST taxes. The state sales and use taxes will be rolled back by 4 percent.

The businesses will still receive the 4 percent cut, but a local 2 percent will preserve city revenue.

"There is no way for us to know how much money the city will lose out on unless we enact this ordinance," Tallant said. "The state does not keep those kinds of records based on who is a manufacturer and who isn't a manufacturer and who pays sales taxes on their energy.

"The only real way for us to figure out the size of lost revenue would be to enact this ordinance and then determine in the future whether or not it's worth keeping this ordinance in place."

The city will use information from the state to determine what businesses are eligible for the new energy and excise tax.

"For someone to claim state exemption from the sales and use tax, they have to apply through the Georgia Department of Revenue," Tallant said. "Based on that information, [the city] would then determine if these businesses would be subject to the city's excise ordinance."

Councilman Chris Gaines formally made the motion to approve the local energy and excise sales tax. It was seconded by Councilman Mike Sosebee.

The ordinance has been the subject of several city council meetings.

In November, the city held a joint meeting with the county to hear thoughts on the taxes. The county declined to attend after choosing not participate in the tax.

 

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