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Tuesday, October 19, 2010 - 8:22am

Should Georgia Tax Businesses On Inventory?

Georgians will vote on whether the state should tax businesses on their inventory come election day. Referendum A would get rid of the state inventory tax.

Kelly McCutcheon with the pro-business Georgia Public Policy Foundation says it would make the state more business-friendly.

"The inventory tax is something that makes Georgia uncompetitive particularly in distribution centers and warehouses where you see very often those being located across the border," says McCutcheon.

The state collects about $2 million from the inventory tax every year. Referendum A applies only to the state inventory tax. Local government could still tax inventories.

Sarah Beth Gehl with the Georgia Budget and Policy Institute which is typically critical of business tax breaks in this down economy says the tax collects so little, it’s not a great loss to state revenue.

"Well it’s actually a very small amount especially in the scheme of the state budget," says Gehl.

Georgia’s budget this year is $17 billion.

Georgia is the only southeastern state with a state-wide inventory tax.