Board of commissioners discuss levying excise tax on energy manufacturers

Published 12:18 pm Wednesday, October 31, 2018

By Ken Gustafson

AMERICUS — The Sumter County Board of Commissioners had a special called meeting Oct. 24 at the Sumter County Courthouse, to discuss adopting an ordinance to levy an excise tax: a tax on manufacturing businesses that produce energy.
Representatives from two municipalities in Sumter County were present at the meeting: Barry Blount, Americus mayor, and Theresa B. Owens, City Clerk for Andersonville.
County Attorney Kimberly Reid explained to the small group gathered what led to this proposed ordinance. “This excise tax arose out of a tax reform deal that was passed by the Georgia General Assembly back in 2012,” Reid said. “They wanted to give a tax break to manufacturers, so they decided that they would exempt them from any state or local sales of use taxes on energy. The General Assembly adopted that and put that into effect.”
Reid said the decision by the Georgia General Assembly to do this meant that manufacturers, in order to be exempt, had to file something to be exempt. “That is an important fact to remember,” Reid said.
Reid said the General Assembly also decided that they would allow local governments, such as the counties if they wanted to, to continue to impose that energy tax on manufacturers. “They would leave it as local control,” Reid said. “Whatever each individual county decided to do, they could continue it or they could decide not to impose it for whatever reason.”
Reid said that Sumter County stopped imposing the energy tax, while a lot of other counties continued to do so. “They couldn’t do without that continuing source of revenue that they’ve had for all these years,” Reid said. “Sumter County didn’t, and so the commissioners are looking now and are trying to decide whether or not to enact this tax at this time.”
Reid said the excise tax would only impact manufacturers, and it would be applied only to any type of energy supplied, such as gas, electricity, any type of energy used from any provider.
“It only applies to any manufacturer who took advantage of that exemption because if a manufacturer didn’t take advantage of the exemption, they’re already paying that tax right now,” Reid said. “If a manufacturer took the exemption, then this is the type of person or entity that this would impact.” Reid said what would happen if it was put into place is that the county has to adopt an ordinance. The county would need an Inter-Governmental Agreement (IGA) with the individual cities.
Board Chairman Randy Howard asked Reid how the county would determine who the manufacturers are that qualify for the exemption. Reid said research needs to be done to find out.
Barbara Grogan, executive director, Sumter County Development Authority, told the board that the identities of the manufacturers to be impacted by the excise tax can be found, but that it would be through a process of elimination. Grogan said she plans to do more research to find out from the state which manufacturers in Sumter County qualify for exemption from the excise tax and which don’t.
Peggy Smith, comptroller at Eaton Corporation’s plant in Americus, told the board that a long time ago, they had the option to apply for the exemption from the excise tax, but they didn’t qualify. “The state said that so much of your cost had to be that energy,” Smith said. “We didn’t meet that requirement. I feel like now, we’re paying that sales tax.”
County Financial Director Janice Jarvis said she contacted the Georgia Department of Revenue (GDR) to find out which manufacturers qualify for the exemption and was told that the GDR does not maintain a list of those manufacturers that are exempt, but that they do have a list of those who do pay the excise tax. Mayor Blount brought up the point. “If you don’t know how much revenue you’re losing now, what’s the point in changing the ordinance?” he asked. Chairman Howard responded that they would not know how much revenue they would be gaining either. The mayor agreed. It was Grogan’s opinion that the only energy manufacturer in the area that would qualify for the exemption, based on their threshold of use (how much energy they use in doing business), would be Imerys, a bauxite mining company that has a mine in Andersonville.
At the end of the meeting, it was decided that Grogan would do more research to find out which companies in Sumter County qualify for the exemption before the Board would move further on the issue.