Effingham County is ready to put an excise tax on energy used in manufacturing.
County commissioners have agreed to levy the excise tax, which the state is abandoning gradually.
All three municipalities also have agreed to participate in the excise tax and proceeds will be disbursed along formulas used to determine local option and special purpose local option sales tax.
As part of a wider tax reform package passed last year in the General Assembly, House Bill 316 put into motion the state’s phaseout of the excise tax. It also impacted the LOST and SPLOST revenue streams for local governments, and state lawmakers included a provision that local governments could enact the excise tax.
The proceeds from the county energy excise tax will be equal to those lost as the state ends its levy.
“It will replace that money lost through LOST and SPLOST from energy used in manufacturing,” said County Administrator David Crawley.
Under the ordinance, the county can charge up to 2 percent on the excise tax. The state is phasing out its 4 percent share over a four-year period.
The county is allowed to keep a 1 percent administrative fee from funds received, to help with distribution of the funds.
The state enacted the gradual elimination of the excise tax as a way, apparently, to improve its competitive standing with other states in attracting new industries. In an earlier discussion over the excise tax, Crawley said a “wild stab” at an estimate of what it would mean to the county is between $200,000-$250,000 a year.
The tax would not apply to those plants engaged in producing electricity for resale. The sales tax on natural gas used to produce electricity for resale is one of the county’s biggest sources of sales tax revenue.