Georgia legislators are looking into the way local sales tax revenues are distributed to counties and cities in the state. A senate study committee heard from representatives of cities who said the system is set up to work against them getting a fair share.
Under current state law, cities and counties that can’t agree on how to allocate local sales tax revenues between them must submit to an arbitration process that skews toward counties. A county that doesn’t like a city’s offer has the right to abolish its local option sales tax in favor of an alternative called the homestead option sales tax, which is used to reduce property taxes on owner-occupied housing and infrastructure.
Since counties don’t have to share HOST revenue with cities, counties can use it to threaten cities during negotiations over allocating local sales tax dollars. The committee is expected to make recommendations for the full senate to consider next year.
