COVINGTON -- The county is taking a wait and see approach and a majority of municipalities don't seem to be in favor of imposing an excise tax on energy.
The General Assembly enacted a tax reform package earlier this year that included a sales and use tax exemption for energy used in the manufacturing process. The exemption has a four-year phase-in at a 25 percent rate, with full phase-in by 2016.
It also gave local governments the authority to levy a new local excise tax to recoup revenues lost due to the exemption. The tax would be collected by the county from companies that sell energy to manufacturers with the county, according to Association County Commissioners of Georgia. If cities participate, they will receive a share of the tax. City participation would require an intergovernmental agreement with the county. Cities that do not participate will not get a share of proceeds, even though the tax will be implemented countywide, according to ACCG. Counties can opt in at any time, but to ensure recouping of revenues lost due to the exemption, should levy the tax by the end of the year.
County and city officials met last week to discuss the possibility of implementing the tax.
The Board of Commissioners has agreed not to pursue implementing an excise tax on electricity sold to manufacturers at this time, said County Manager John Middleton. The board has agreed to wait three to six months to see the impact of the sales tax exemption before reevaluating its decision.
"There's no definitive information available from the Department of Revenue on the impact to counties," Middleton told the board at its Sept. 4 meeting. While the decision was made to give the state an economic development edge, "it would be nice to have some numbers to understand what we're working with," he said.
Covington City Manager Steve Horton said that "Covington elected officials have not made any decision on the creation of a excise tax ordinance. It may show up as an agenda item on an October agenda, however, based upon previous preliminary discussions, I doubt that the elected officials will pursue an excise tax."
Oxford Mayor Jerry Roseberry said Oxford has few commercial accounts that qualify under the new sales tax law "and if we attempted to tax those few accounts the total income would be $200 or less.
"On a countywide basis Oxford stands to lose about $4,000 to $5,000 annually once the law is in full force. My only concern, and I expressed it at the meeting, we should not get in the habit of giving away revenue without careful examination of the consequences, now and in the future," Roseberry said. "And I believe a company that earns its income in our community should want to be a good citizen and pay its fair share. I think there are several such companies in Newton County that want to be located in a community that offers quality amenities and those cost money."
Porterdale City Manager Bob Thompson said, "We are supportive of the decision to not add a disincentive for companies looking at our community as a potential location for investment."