Georgia counties are weighing whether to charge manufacturers a two percent excise tax on energy. It's a response to a new law that exempts manufacturers from paying a local sales tax on energy.
The new law is aimed at luring business to Georgia by cutting production costs for manufacturers. The exemption will be phased in over four years starting in January. But it’s costing localities revenue. The law allows localities to implement a local excise tax to get money back.
But Clint Mueller with the Association of County Commissioners of Georgia says local officials don’t have any hard data to determine if it’s worth it.
He says “The state of Georgia does not track sales tax by industry type. So they cannot tell us how much sales tax is being collected, say by Georgia Power, on their customers that are manufacturers.”
Roy Bowen with the Georgia Association of Manufacturers says implementing an excise tax would indicate business is not welcome.
“The counties that would opt to levy the excise tax are taking a huge gamble on what may be at the end of the day a very small reduction in revenue.” he says.
Mueller says counties are already struggling due to dropping property tax revenues. But he says they don’t want to scare away business.
“It pits them (counties) against each other I guess. That’s what’s difficult about it. If they choose to levy and they really need the revenue it could put them at a disadvantage to other counties who can afford to absorb the loss.” he says.
Bowen says the whole reason the energy sales tax is being phased out is to lure business to Georgia.
He says “We were losing manufacturing jobs at a rate faster than other states because frankly we were not competitive. Our costs of producing products in Georgia was greater than in our neighboring states.”