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City, county explore energy excise tax

Joint meeting first step in process

POSTED: September 11, 2012 6:54 p.m.

Forsyth County and city of Cumming officials huddled Tuesday to consider whether to phase in an energy excise tax that the state is phasing out.

State legislators passed a law earlier this year that would start a four-year process of exempting the sales tax on energy charged to manufacturing businesses.

The provision was part of larger changes to the tax code and was meant to make the state more attractive to manufacturers.

Along with the state portion of the tax, the law eliminated the two 1 percent sales taxes local governments collect as part of the local option sales tax, which reduces reliance on property taxes, and the special purpose local option sales tax, which funds special voter-approved projects.

The joint Tuesday meeting was the first step required for Forsyth County and Cumming to have the ability to levy a local energy tax.

If the two entities want to keep that revenue, they must enter into an intergovernmental agreement within 30 days, said Paul Higbee, of the county attorney’s law firm.

After those 30 days, each government must adopt an ordinance to make the tax effective Jan. 1, Higbee said.

In following with the procedure, neither government made a decision on whether to bring about the tax, but each scheduled the item for a future meeting — Forsyth County on Oct. 9 and Cumming on Oct. 16.

Commissioner Pete Amos said he’d “like to keep our options open.”

Commissioner Patrick Bell said the next 30 days can be used to continue gathering information on the impact of losing the tax.

While the exact amount can’t be determined, county finance director David Gruen said the total yearly revenue is estimated between $100,000 and $1 million.

Figures from the local chamber of commerce estimated between 200 and 400 or more businesses could qualify for the exemption in Forsyth County, he said.

“If the initial levy is approved and put in place for next year,” Gruen said, “we’ll see actual collections on it and have a better idea in looking at years two, three and four as to whether the board and council want to continue this or not.”

City Attorney Dana Miles said one certain factor is that the sales tax revenue will drop in some amount to be determined later.

“This is not a new tax,” Miles said. “This is the county and city preventing the state from putting in the exemption so the manufacturers that are currently paying the tax, which funds LOST and SPLOST for the city and county, will no longer have to pay that.”

The exemption does not impact education SPLOST revenue, he said.

If only the city or county opts in to recoup the exemption, Miles said, that entity would collect all the proceeds only from its jurisdiction.

From a “practical perspective,” he said it would be better for both to agree to take the same route.

Check back for updates at or see the next edition of the Forsyth County News.


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