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City mulls tax on energy

POSTED: November 7, 2012 4:00 a.m.

The Dawsonville City Council is considering a possible excise tax on energy for manufacturing businesses.

Council members voted unanimously Monday night to have the city attorney begin drafting an ordinance that could send the matter to public hearings.

Earlier this year, state legislators voted to abolish Georgia's energy tax in an effort to be more competitive in attracting manufacturers to the state. Phasing out the 4 percent tax begins next year and ends in 2016.

With the vote, however, they also grated city and county governments the option of adopting a local excise tax on energy to recoup the lost revenue.

"Although it is written in as an excise energy tax, it's not a tax increase. It is a partial abatement of the state tax exemption that the state has given," said City Attorney Kevin Tallant.

If implemented, the tax would be made up of 1 percent from local option sales tax, or LOST, funds and 1 percent from the special purpose local option sales tax, SPLOST.

Tallant said developing the ordinance is the city's only means to determine how much funds would be raised by the measure, which would also be rolled in over a four-year period in balance with the state's rollback.

"I don't see how you will be able to find out how much money you're missing out on without implementing this ordinance," he said. "You're not going to know what revenue is being lost without implementing the ordinance and then looking at your collections under the ordinance."

Councilman Chris Gaines said moving forward with the ordinance allows the city to gather more information.

"We don't know if this could bring in $500 or $50,000 to the city," he said. "I don't think it would bring in $50,000, but this is the only way we can find out."

The county government opted against pursuing the tax last month.

Monday's meeting was advertised as a joint meeting between the city council and Dawson County commissioners to discuss the issue, though no county representative were present.

In a letter dated Oct. 29 to Mayor James Grogan, Commission Chair Mike Berg wrote that he "did not see the need to meet formally" since the county had voted against entertaining the energy excise tax "at this time."

The council is expected to revisit the issue during its Nov. 13 meeting.

 

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