Facing loss of sales tax money, cities and counties reach agreements

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Local governments across the state, facing a Thursday afternoon deadline that could cost them millions in local option sales tax (LOST) revenues, reached agreements on how to distribute that money.

The largest resolution involved the City of Atlanta, which was one of the last to sign on to an agreement stipulating the formula for distributing LOST taxes collected in Fulton County by the state revenue department.

“In order to protect the City of Atlanta’s approximately $100 million annual share of LOST revenue, Atlanta Mayor Kasim Reed determined that it is in the best interest of the citizens of Atlanta that he sign the LOST distribution certificate as submitted to the Department of Revenue by Fulton County and 12 other cities, and as authorized last night by the Atlanta City Council,” said a statement released by Reed’s office.

“The mayor is confident that Atlanta’s growing economy will mitigate any reduction in Atlanta’s share of the LOST proceeds,” Reed’s statement said.

City and county governments were under the gun to finalize the agreements because of a Georgia Supreme Court decision last week overturning a state law that set up an arbitration procedure to settle these tax disputes. The court ruled that the law violated the separation of powers between the legislative and judicial branches of government.

Attorney General Sam Olens said local governments had until 4:30 p.m. Thursday to reach sales tax distribution agreements or face the prospect of losing the tax revenues altogether.

Another late-breaking agreement was reached in Hall County between the county commission and the cities of Gillsville, Clermont, Lula, Flowery Branch, Oakwood, and Gainesville.

© 2013 by The Georgia Report

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Tags: local governments , local option sales tax , revenue department , Sam Olens