Mayor urges legislature to start electronic collection of sales taxes at each merchant’s cash register

The Senate Local Sales Tax Collection Study Committee met with several city and county officials Dec. 11 at the Capitol to discuss outsourcing sales tax collections.

Collecting local tax income in a more efficient manner could have a potentially enormous impact on local and state-wide revenue. State Sen. Chip Rogers (R-Woodstock) chairs the committee and supports the idea of local governments having the ability to choose their preferred method of tax collection and plans for legislation to be introduced next January based on committee findings.

“These meetings have given the committee a clear picture that the current tax collection system has serious flaws,” said Sen. Rogers. “The potential solution — giving city and county officials the option to choose the most effective way to collect sales taxes for themselves — will make for increased competition between the public and private sector for collection services and ultimately provide the accountability and efficiency that citizens and local businesses deserve for their tax dollars.”

Members heard from several city and county officials who are overwhelmingly in support of having the ability to outsource their tax collection if desired.

Peachtree City Mayor Harold Logsdon testified that his city needs the most accurate sales tax data to determine the best paths for economic development.

He highlighted huge discrepancies between their local option sales tax (LOST) and special local option sales tax (SPLOST) collections, both of which are collected at the same point of sale, totaling almost half a million dollars in the last two years as one of his main concerns.

He supports privatizing collections and installing electronic controls to administer real-time point of sale collections.

Mayor Logsdon believes electronic filing could increase collections by up 21 percent, which for Peachtree City would mean over $1.5 million in increased revenue.

He noted that if the same principles were applied statewide, Georgia’s revenue total could increase by over $1 billion.

The committee also spoke with Cobb County Board of Trustees Chairman Virgil Moon. He stated Cobb County collects almost $2 billion dollars from their SPLOST and are paying the Department of Revenue $17 million dollars to administer the revenue. He mentioned multiple businesses not registered correctly with the county have led to missing SPLOST revenue.

Chairman Moon told committee members he would support an improved ZIP code system that would aid in proper business registration with their appropriate county in addition to local choice for collection services.

Speakers on Dec. 11 and several at previous committee meetings support a policy based on Alabama’s sales tax collection law that allows city and county governments to utilize private agencies to track tax revenue.

Several Alabama local government officials gave testimony earlier this year that when they began using third party collections they saw an immediate increase in government revenue.

Currently the Department of Revenue (DOR) collects all local sales and use taxes on behalf of cities and counties. Local governments are subsequently charged one percent of the amount collected, regardless of the total cost of collection, which is used by the department for administrative purposes.

The Study Committee includes Senators Mitch Seabaugh (R-Sharpsburg), John Wiles (R-Marietta), Tim Golden (D-Valdosta), Emanuel Jones (D-Decatur), and several local officials from across Georgia, whose goal is to ensure that taxpayers’ hard earned money is collected in the most efficient, low-cost manner possible by local governments.

Sen. Rogers stated that the Study Committee will hold at least one additional meeting before the start of the 2009 General Assembly. The committee members plan to introduce a draft of proposed legislation addressing local revenue collections at the final meeting that will be finalized and submitted for the upcoming legislative session that convenes Jan. 12.

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