15 Sep 2014
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New Energy Excise Tax Eyed

Duluth considering entering into agreement with Gwinnett County to share proceeds of energy excise tax to replace energy sales tax.

New Energy Excise Tax Eyed

The Duluth City Council is considering entering into an agreement with Gwinnett County to receive its fair share of an energy excise tax that would eventually give the city an estimated $264,000 in revenue a year. This is similar to the way the county and city share sales tax revenue.

The city informally agreed to sign the intergovernmental agreement at its Oct. 23 work session, but must officially act on it at its upcoming Nov. 12 meeting. The Gwinnett County Board of Commissioners is scheduled to adopt the countywide energy excise tax on manufacturing at its Nov. 27 meeting. If Duluth decides not to participate, the city would not receive any of the tax revenue.

According to information provided at the council work session, the Georgia General Assembly decided to phase out the sales tax on energy used in manufacturing over a four-year period beginning Jan. 1, 2013, which would reduce the amount of SPLOST revenue. ESPLOST, the education sales tax, is exempt from this phase-out.

Gwinnett County and its cities may decide to phase in a one percent excise tax to replace the sales tax on energy used in manufacturing over the same four-year period. The rate of the phase-in of the excise tax would mirror the schedule of the phase-out of the sales tax at 25 percent a year. 

Duluth would receive about $264,000 annually, its part of an unofficial estimate of $10 million in energy excise tax revenue that would be collected countywide, after the phase-in/phase-out process is completed.

There is a provision for the city to opt in later.

Council members also agreed to explore refinancing 2003 bonds issued to construct the Duluth Public Safety Building at a lower interest rate, which would save the city about $535,000 over the life of the issue.


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