Sales tax faces shortfall; exemptions, online sales draw blame
Published 10:16 pm Tuesday, January 23, 2018
MOULTRIE, Ga. — A drop in sales tax collections looks bad enough on paper, but in practice less money coming into county coffers means less miles of roads resurfaced and ultimately could lead to higher property taxes.
With a countywide sales tax dedicated to transportation set to kick off in April, local officials see an alarming trend in declining sales tax revenues.
The transportation special purpose local option sales tax is expected to raise some $25.5 million for road projects in Colquitt County and in the county’s municipalities.
Shoppers in the county also pay a 1 percent sales tax for other projects — a tax that has been in effect for more than 15 years. The Colquitt County School System also collects two pennies on the dollar for operations and construction and renovation.
So school officials as well as those in the county are feeling the pinch.
“We’re receiving less money in the period of (economic) recovery than we were during the Great Recession,” Colquitt County Administrator Chas Cannon said.
The current county special purpose local option sales tax brought in an average of $460,000 per month between 2007 and 2012, he said, a period that included the most severe economic downturn since the Great Depression that started with the stock market crash of October 1929.
From February 2012 to December 2017, in contrast, the county’s receipts on that tax have averaged $438,000 per month.
If that trend continues, the county — along with the City of Moultrie and other municipalities and the school system — will feel the shortfall.
The new transportation sales tax, approved by the county’s voters last year, is earmarked toward mainly resurfacing existing county-maintained paved roads and paying for roadway maintenance costs such as roadside mowing and spraying.
The county also anticipates putting about $1 million per year back into its general fund account as reimbursement for road maintenance expenses out of the transportation tax account.
One potential cause of the drop in revenue that has been mentioned by counties is the Georgia Agricultural Tax Exemption, or GATE, program.
The state General Assembly in 2012 passed legislation that included the agricultural exemptions, and the program kicked off in January 2013.
It allows for specified state and local sales tax exemptions on eligible agricultural purchases for “qualified” agricultural producers, according to the Georgia Department of Agriculture. The exemptions cover agricultural inputs such as herbicides, farm machinery purchases and energy use related to farming.
Lawmakers are looking into that program, but the problem faced by counties and school systems likely goes further, said state Rep. Sam Watson, R-Moultrie, whose district includes much of Colquitt County.
“I think it’s a combination,” he said. “There’s more places to shop and do (things)” in other counties.
Online shopping also is a large — and growing — explanation for where the tax money is going.
State and local taxes are not collected on many sales made over the internet. While buyers are technically required to keep up with purchases and pay those taxes, in practice it would be the rare individual who does so.
“That’s just grown tremendously,” Watson said of online shopping. “We’re just trying to adjust to technology. It’s 2018. The way people are doing business has changed, but the law hasn’t changed.”