Rep. Paul Battles (R-Cartersville) of the 15th District, with others, is sponsoring the bill. He said local governments and associations had discussed increasing transparency in the reporting of sales and use tax for a number of years.
“We came together and came up with a piece of legislation that would ask that the information that the [Georgia] Department of Revenue collects concerning all points of sale in the county be reported back to that county by each one of those retail businesses and the money that has been collected during that collection period,” Battles said. “What happens right now is we simply get a check. We have no earthly idea if it’s the right amount, if all of those who are paying are collecting sales tax within the county through the Department of Revenue. We’re not sure whether or not we’re getting all of that back.
“Now I would say that they’re not trying to intentionally keep any from us, but it’s one of the things that we’ve been talking about for several years is having a process that makes it transparent what all the agencies are doing.”
The act will amend the section of the Official Code of Georgia Annotated relating to the administrative organization for revenue collection and the confidentiality of tax information.
“Notwithstanding this Code section, the commissioner, upon request by resolution of the governing authority of any county or municipality of this state shall furnish to the designated finance officer or taxing official of the county or municipality any pertinent sales and use tax information from any sales and use tax returns or refunds, any sales and use tax exemption information, or any combination, to be used by such designated officer or official in the discharge of his or her official duties,” the bil states. “Such designated officer or official also shall be authorized to utilize such information in researching: sales and use tax errors; underreporting of sales and use taxes; misuse of sales and use tax exemptions; sales and use tax avoidance; any type of fluctuations in the distribution amounts of proceeds of any local sales and use tax; or any combination thereof. During the performance of such research, such designated officer or official shall not be authorized to contact in any manner any taxpayer identified in such confidential information.”
Striking a balance between giving local governments specific details on tax reporting and protecting the privacy of businesses in the bill was a concern, Battles said.
“First of all, there was — and we’re dealing with this too — there was the privacy issue. That information by [businesses] was not, by law, you could not report that out. It was some legislation that passed a long time ago just never has been corrected, and so in this bill we take care of that, the privacy issue,” he said. “This is not like going out and, matter of fact, if we feel like there is a problem with a business underreporting or not reporting at all, we do not go and approach. This bill will not allow Cartersville or Bartow County to go out and approach these businesses. That would be reported to the Department of Revenue. They would in turn do the investigation.”
By increasing transparency in sales and use tax reports, County Administration Peter Olson said, local governments will have a better idea of where tax revenues are coming from and could spot any trends in the revenues.
“I know it’s been a frustration for county governments for a long time, not getting better information about the sales tax. We get the monthly number, and then quarterly they’ll issue a report that breaks it down into 12, what they call, commodity codes and that’s categories like food and drink, general merchandise, utilities, construction,” Olson said. “So it’s 12 broad categories. You can get some sense from that on a quarterly basis of where the economic activity is, but they’ve always taken the position, and it’s in the statute, that the specific information from any particular business is confidential and they won’t tell you anything about that.”
Olson said even the broad categories could be useful to county governments, however. He cited an example when his predecessor, Steve Bradley, was county administrator and sales tax numbers began to decline in 2011. The decline, Olson said, was in the utilities category, which pointed to Georgia Power. After speaking with Georgia Power officials, Bradley was told the plant was using less coal as the company was shifting toward natural gas to produce electricity.
HB 713, though, would also allow counties to ensure they are receiving their fair share of tax revenue from businesses, Battles said.
“We have requested that DOR report that information back to the county for purposes of making sure that after we’ve looked through that there’s not any errors,” he said. “Some of the retail businesses that report those sales tax that are collected here are not being sent to another county. That happened before.
“... We had a situation where the business code for that business in reporting ended up being Barrow County, not Bartow County, so that’s evidence enough there are the possibilities of error. But simply the right to know who is paying sales tax, use tax, in Georgia at those points of sale in those counties, we want to know what that is.”
Olson cited the misreported sales tax as well.
“Another example was back ... when Love’s first opened in Emerson, they miscoded their sales tax reported to county number seven, which is Barrow, not county number eight, which is Bartow in the scheme of things. For some period of time, and I don’t know how long, they sent their sales tax to the wrong county’s credit,” Olson said. “That’s a big sales taxpayer, so I think Steve [Bradley] or somebody realized the revenue wasn’t bumping up when that thing opened. Anyway, so they investigated and found that out.
“This act is designated to both let you identify what sales taxpayers there are in the county and in the cities, and, two, at least for just one individual to have a confidentiality agreement — typically it would be the [chief financial officer] to see the numbers. I think that would be useful just to help predict economic activity and see trends and so forth.”
According to the General Assembly’s website, www.legis.ga.gov, HB 713 was put into the House hopper Jan. 13 and moved through the first readers stage the next day and then to second readers on Jan. 15. Battles said the bill still needed to go through the ways and means committee and the rest of the process. He believed it would pass the House if it came to the floor, adding it has bipartisan support.
“So we believe that there is enough support across the state of Georgia for us to get this on the floor, get it voted out and [then] work out how and when DOR is able to get this information to us. It’s a process at work. ... This is one of those that is bipartisan. I’ve had as many people on the other side of the aisle that is supportive of this. I mean, people want it. The communities want it,” he said.