Daily Archives: November 18, 2014
The familiar phrase from Dragnet, “Just the facts, ma’am…just the facts,” is what Sergeant Joe Friday would say when he needed to get to the details he was looking for—and that is what Georgia’s cities are saying with the FACT Act. Georgia’s Department of Revenue (DOR) has worked hard to ensure sales tax compliance but needs legislative permission to offer local governments more detailed sales tax data—and that is just what the FACT Act will do.
FACT stands for Full Accountability in the Collection of Taxes. The proposed legislation would require DOR to collect and prepare sales tax data at the municipal level, as well as for the unincorporated areas of Georgia. Rep. Paul Battles (R-Cartersville), chair of the House Retirement Committee, has agreed to sponsor the legislation in the 2014 legislative session.
Sales tax data is a tool for both state and local governments and compliance has always been an important for both levels of government. The addition of detailed sales tax figures would allow local governments to be a better partner with DOR in policing retailers who side-step the law by avoiding payment or collections of sales taxes. Better compliance means that tax-paying business owners have greater certainty that they are on a level playing field with their peers.
Just as a business needs to know and understand where its revenues come from, state and local governments need the best data available in order for elected officials to make decisions on revenue streams, expenditures and balanced budgets. This has become more of a challenge with the implementation of 2012’s HB 386 tax reforms. In HB 386, the Georgia Agricultural Tax Exemption (GATE) was expanded to include a wider variety of agricultural inputs and broadened the number of types of businesses that qualify for the exemption—making illegal use of GATE certificates easier and more likely. Greater sales tax detail will help give local governments a better view to from which to forecast, while showing fluctuations that may be due to misuse of GATE certificates or other exemptions.
If commerce is the life-blood of a community, sales tax data is a measure of that community’s health. Data derived from sales tax figures at the local level could be used by local government officials, the Department of Economic Development and the Department of Community Affairs in accomplishing their missions. With this information available to local officials, public investments can be directed to foster areas of future growth or to shore-up areas of weakened retail commerce.
With sales tax figures currently compiled at the county level, there exists an unnecessary subjectivity in Local Option Sales Tax (LOST) negotiations. Since neither cities nor counties can actually say how much sales tax is raised in each jurisdiction, assumptions are made on both sides of the negotiations. Actual city and unincorporated areas’ sales tax figures will give much-needed objectivity in LOST negotiations, ultimately making improved LOST negotiations possible.
As a sitting member of the LPC of GMA (Legislative Policy Council of Georgia Municipal Association), I support this measure. Information is relevant.