published Thursday, March 11th, 2010

Ruling gives sales tax to counties

ATLANTA — Georgia’s top lawyer says the state must hand over $18 million in disputed sales tax revenue to local governments in the midst of a crippling state budget crunch.

The opinion from Attorney General Thurbert Baker was obtained by The Associated Press.

A spokesman for Gov. Sonny Perdue was critical of the opinion and said Wednesday the office was analyzing the decision. He declined to say whether the state would comply.

Some county officials who are grappling with economic woes of their own praised Baker’s opinion, which they say could hand them some badly needed cash.

“Every little bit helps,” said Clint Mueller, legislative director for the Association County Commissioners of Georgia.

Whitfield County Commission Chairman Mike Babb said county leaders suspected they weren’t receiving their full share of sales tax because collection figures differ drastically month to month.

“All we, as government members of Whitfield County, want is to get back what’s paid in by the people who made purchases in Whitfield County,” he said. “We just want it to be as correct as possible.”

But Fort Oglethorpe Mayor Ronnie Cobb wasn’t excited about the decision, saying it forced local leaders to “pick your poison.”

“Anything that the state has to relinquish back to the cities and the counties they’re going to have to make up somewhere,” he said.

Baker delivered the 15-page opinion to Lt. Gov. Casey Cagle, who had sought legal advice on who had rights to a pot of “unidentifiable” sales tax revenues.

At issue are sales taxes collected by the state without clear information about which local government they belong to. Typically, Georgia collects sales taxes from merchants and then distributes a portion back to the appropriate local government. But sometimes there’s not enough information to determine which county they belong to.

Under state law, the revenue commissioner divides those “unidentifiable” funds among local governments. That law expired in 2008 and, when it was renewed in May 2009, it was unclear what should become of the roughly $18 million in accumulated tax.

The decision comes as the state is scrambling to fill what is shaping up as another $1 billion shortfall for the fiscal year that begins July 1. This week state money managers reported that tax collections are down for the 15th straight month.

Dalton Mayor David Pennington said whatever gets down to the local level is “not going to be a whole lot of money.”

He said it would make more sense for the Georgia Department of Revenue to invest in technology to better track where all sales tax revenue comes from.

“Most states in America now have that technology,” Mr. Pennington said. “We’re one of the few left that doesn’t.”

The Associated Press and staff writers Kelly Jackson and Andy Johns contributed to this story.

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