Walker County Officials To Impose Half-Cent Sales Tax On Industry

Thursday, December 27, 2012

After "much deliberation," Walker County will impose a half-cent sales tax on power used by industrial customers, officials said.

“This has been a very difficult decision to reach,” said Walker County Chief Financial Officer Greg
McConnell. “The state has left us very little option in the short term.”

The tax decision follows legislation passed by the Georgia General Assembly earlier this year to repeal all sales tax on energy used by industrial and agricultural applications. Many county and city governments are trying to ensure that their debt obligations are covered by imposing what is being termed as an excise tax on industrial users, which is capped at 2 percent by House Bill 386 for the revenue lost.

Mr. McConnell said, "Even with the half cent being imposed, the net result will be an overall tax decrease for industrial users as the loin's share of the taxes will be gone.

“As sales taxes historically remain static, provision was not made by the legislature for a potentially
significant decrease in revenues. Such a substantial decrease in sales tax could result in an inability for the county to repay debt obligations such as the SPLOST voted in by citizens in
2008.

”The seven cents collected in sales tax in Walker County represents both state and local taxes with four cents going to the state and three cents to local initiatives such as the LOST (Local Option Sales Tax), SPLOST (Special Purpose Local Option Sales Tax), and ESPOLST (Educational Special Purpose Local Option Sale Tax). The state repealed the entire sales tax amount without what seems as much thought as to how the action might effect local debt obligations".

“Walker County will impose the tax for the first year to run a cost benefits analysis as to the amounts of revenues lost,” Walker County Commissioner Bebe Heiskell said. “While we want to bring to our industrial partners all the benefits possible, we cannot shift such a potential loss of tax revenue to the backs of local residents. However, we are looking for ways to see the tax phased out entirely as our debt obligation diminishes.”

The Association of County Commissioners of Georgia is currently working with local governments to help navigate the issues potentially created by the state's decision, she said.

“We ask that our industrial partners remain patient with us as we adjust and resolve this issue,” Commissioner Heiskell concluded.


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