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County, cities considering energy excise tax

Discussions will take place Tuesday at special meeting

— Clayton County authorities will meet with the county’s seven mayors this week to discuss the possibility of creating a new tax to replace an outgoing one Georgia legislators eliminated earlier this year.

Gov. Nathan Deal signed House Bill 386, which created an energy tax exemption, into law in April. Under the law, “the sale, use, storage or consumption of energy which is necessary and integral to the manufacture of tangible personal property” is exempt from almost all state and local sales and use taxes. The only exception is sales taxes used to fund education projects, according to the law.

However, that created a tax revenue vacuum which county and city officials will now have to decide whether to fill by creating a new energy excise tax.

“Due to the 2012 Georgia General Assembly’s passage of legislation that would phase out local sales taxes over a four-year period on energy used in manufacturing, the county is allowed to determine how to recoup the lost revenue by levying an energy excise tax at a rate equal to the amount exempted,” an announcement from the county states.

The public meeting between county and city officials will take place Tuesday, at 5 p.m., at the Clayton County Board of Commissioner’s office, located at 112 Smith St., in Jonesboro.

The energy sales tax exemption is being phased in over a four-year period, so manufacturers will be exempt from 25 percent of energy sales taxes in 2013, 50 percent in 2014, 75 percent in 2015 and eventually 100 percent beginning in 2016.

The Georgia Municipal Association’s web site states the excise tax will be on energy used in manufacturing.

The Association of County Commissioners of Georgia has published an information sheet on its website to explain the excise tax to county commissions. The group states the excise tax provision was included in the law to give counties and cities a way to recoup any money lost because of the energy sales tax exemption.

An intergovernmental agreement will be required to collect and share the tax proceeds, however, according the statewide commissioners group.

“This is essentially a county tax,” the information sheet states. “There must be a meet-and-confer with the cities. If a city declines to participate, it will be collected countywide but the city gets no proceeds.”

Cities who participate in the excise tax will receive the same percentage share they receive for SPLOSTs and LOSTs, according to the ACCG. The group’s website states the excise tax, which will be capped at 2 percent, must be phased in over a four-year period to match the phase out of the sales tax.

Counties and cities have until Dec. 31, to decide whether to create an energy excise tax.

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On the Web:

Georgia General Assembly: http://www.legis.ga.gov/

Georgia Municipal Association: http://www.gmanet.com

Association of County Commissioners of Georgia: http: www.accg.org/