Georgia Gov. Nathan DealATLANTA – For manufacturing giant Shaw Industries, producing carpet in North Georgia costs the company millions of dollars in sales taxes that it wouldn’t have to pay in most parts of the nation.
That’s because Georgia is one of the few remaining states that require manufacturers to pay sales tax on electricity, natural gas and other energy they consume to produce goods – whether they’re building Gulfstream business jets in Savannah or brewing Miller beer in Albany.
Gov. Nathan Deal has made scrapping the energy tax on manufacturing plants one of his priorities for the 40-day session of the state Legislature that began Monday. Deal says the tax exemption would save companies about $157 million a year. But it’s still unclear how the state – and likely local governments – would make up for the lost revenues when budgets are still lean from years of recession.
In the heart of North Georgia’s “carpet capital,” Whitfield County Commission Chairman Mike Babb said he fears the state risks losing jobs by keeping the tax on the books. However, with more than half the county’s 53,500 jobs tied to manufacturing, local officials also rely on the taxes those businesses pay.
“Because there is so much manufacturing here and they use so much energy, that goes to the bottom line of our budgets,” Babb said. “But we also need to make sure that we keep manufacturing here. And right now we’re not competitive with our surrounding states.”