Manufacturing tax break nixed in Forsyth County, Cumming
County, city to continue energy tax on manufacturing businesses

by Aldo Nahed

October 24, 2012

FORSYTH COUNTY, Ga. — A joint agreement between the county and the city set the stage last week for the continuation of a manufacturing tax.

The excise energy tax, which state legislators voted to repeal in order to attract manufacturing jobs to Georgia, was set to expire at the beginning of 2013, unless the municipalities wanted to put in place ordinances to keep the manufacturing tax money flowing.

The city of Cumming council and Forsyth County commissioners worked on an intergovernmental agreement to move forward with the tax. The city approved the agreement at its Oct. 16 meeting.

“We have the ability to discontinue the tax,” County Attorney Ken Jarrard told commissioners at an Oct. 9 work session.

Sawnee EMC and Georgia Power provided the county with a figure of $400,000 total in lost tax revenue, David Gruen, the county's finance director, said.

That amount is only for electricity taxes.

The amount of manufacturing companies that use gas was not available, he said.

“There’s a lot of gas manufacturing out there, too,” Gruen said.

As far as the special purpose local option sales tax through 2019 the amount of taxes reaches about $1 million that would be lost.

“It’s becoming a very significant amount,” Gruen said.

While the tax repeal could boost economic development, the state is expected to see a loss in tax revenue of $18 million in fiscal 2013 with the one-quarter phase-in, to an eventual loss of $94.3 million in fiscal 2015, according to state figures.

The sales tax that could be exempt is part of a 7 percent sales tax — 4 percent goes to the state and 2 percent goes toward the local option sales tax (LOST), special local option sales tax (SPLOST.) A 1 percent education tax (E-SPLOST) will not be exempt from manufacturing under the law.

The state portion of the tax could still be exempt for manufacturing companies that apply and qualify for the break.

The Cumming-Forsyth Chamber of Commerce said about 400 companies could fall under the manufacture umbrella in the county.

Randall Toussaint, vice president of economic development for the Cumming-Forsyth Chamber of Commerce said the legislation on issue is still unclear.

“We are still learning about it,” Toussaint said.