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Thursday, October 17, 2013 - 8:00pm

Supreme Court Nixes Tax Process

Updated: 1 year ago.
Pennies add up to millions of dollars when they're a sales tax. Georgia's system of local sales taxes is the subject of a state Supreme Court ruling. (photo Aldo)

A Georgia Supreme Court ruling is putting millions of dollars in local sales taxes in limbo.

Seventeen counties and about 40 cities are dividing up potential tax revenue.

But the court has declared the process unconstitutional.

The Supreme Court invalidated a process that lets judges divvy up local sales taxes if city and county officials can't agree on how to do it themselves.

The court said that violates the separation between legislative and judicial branches.

Now, counties and cities in the midst of this process don't know how to proceed.

And Amy Henderson of the Georgia Municipal Association also doesn't have answers for cities and counties that already have settled their cases.

"That's yet another question," says Henderson. "Do those count, basically? Because the process that they went through, the Supreme Court said it was an unconstitutional process."

Henderson says her organization expects guidance soon from the Department of Revenue and Attorney General's offices.

Atlanta's Fulton County, Gainesville's Hall County and Valdosta's LownDes County are some of the areas where officials turned to the courts for settlements.

Henderson says the ruling threatens to throw into question millions of dollars.

"We've had conversations with the Attorney General's office and the Department of Revenue to find out what happens next," says Henderson. "How are they looking at what this ruling means?"

It was state lawmakers who, three years ago, allowed judges to divide up local sales tax revenue when local elected officials couldn't agree how to do it.

The Supreme Court ruled that violates separation of powers.