A handbook: local government revenue sources authorized by state law [June 1987]

A HANDBOOK: LOCAL GOVERNMENT REVENUE SOURCES
AUTHORIZED BY STATE LAW
GEORGIA DEPARTMENT OF
COMMUNITY AFFAIRS

A HANDBOOK: LOCAL GOVERNMENT REVENUE SOURCES AUTHORIZED BY STATE LAW
prepared by Georgia Department of Community Affairs
Jim Higdon, Commissioner
Government Information Division 40 Marietta Street, N.W., Suite 800
Atlanta, Georgia 30303
Revised June, 1987

ACKNOWLEDGEMENT
The Department of Community Affairs gratefully acknowledges the assistance and expertise provided by the following individuals and agencies:
Janet Bolt, Georgia Municipal Association Jim Grubiak, Association County Commissioners of Georgia Paul Mangold, Georgia Department of Revenue Hart Pearson, Georgia Department of Revenue Danny Peterman, Georgia Department of Revenue Ed Sumner, Georgia Municipal Association

Table of Contents

I.

Introduction

1

II.

Property Taxes

5

Introduction to County and Municipal Ad Valorem Taxes

5

County Ad Valorem Property Tax

10

Municipal Ad Valorem Property Tax

11

Penalty and Interest on Delinquent Ad Valorem Property

Taxes

13

Tax Executions

14

Intangible Personal Property Tax

17

Intangible Recording Tax

20

Real Estate Transfer Tax

22

III. Alcoholic Beverage Taxes

24

Local Excise Tax on Malt Beverages

24

Local Excise Tax on Wine

25

Local Excise Tax on Package Sale of Distilled Spirits

27

Local Excise Tax on Sale of Distilled Spirits by the

Drink

29

IV.

Sales, Use and Income Taxes

31

Local Option Sales Tax

31

Special Purpose Local Option Sales Tax

34

Hotel-Motel Tax

37

Local Income Tax

39

Motor Vehicle Tag Collection Fees

42

Special Franchise Tax

44

V.

Business Licenses and Taxes

46

Business License/Occupation Taxes -

General Information

46

Financial Institutions License Tax

50

Insurance Company License Fee

52

Insurance Premium Taxes

53

Licensing the Manufacture, Distribution, and Retail of

Malt Beverages

55

Licensing the Manufacture, Distribution, and Retail Sale

of Wine

57

Licensing the Manufacture, Distribution, and Retail Sale

of Packaged Distilled Spirits

58

Licensing the Sale of Distilled Spirits by the Drink

59

Airport Fees and Licenses

61

Itinerant Show License Fees

62

Appendices

Appendix A: Local Government Revenue Sources

(Comprehensive listing)

63

Appendix B: Local Government Revenue Sources and

References to Georgia Code Annotated

68

Appendix C: Telephone Directory of Information Sources

71

Appendix D: Reports on Local Government Finances -

Content Description

72

Bibliography

73

Evaluating This Handbook

75

I. Introduction
What is the purpose of the Handbook?
A Handbook: Local Government Revenue Sources Authorized by State Law is a general reference to provide summary information to units of local government on revenue sources. It is designed to be used as a desk-side quick reference by local elected officials, administrators, fiscal officers, attorneys, and other persons needing ready access to information concerning municipal and county revenue sources.
Is the Handbook a reference for legal opinions?
No. The Handbook is a general reference. It is not to serve as the basis for legal opinions or citations of state law on revenue sources. Local government officials and staff should consult with legal counsel when seeking official interpretations or citations of specific laws referenced in the Handbook.
What revenue sources are summarized in the Handbook?
All of the revenue sources examined in this Handbook are authorized by state law. The revenue sources are grouped into four major categories:
o property taxes; o alcoholic beverage taxes; o sales, use and income taxes; and o business licenses and taxes.
For each category, the Handbook provides the following information:
o the specific revenue source and the rate at which it may be imposed;
o the unit of government authorized to levy the tax or other revenue sources;
o purposes for which revenue may be spent, when mandated; o special features of the revenue source;
1

o the legal citation, (see Appendix B); and
o additional sources of information and assistance. (Also see Appendix C) .
What other types of revenues are not covered in the Handbook?
The revenue sources contained in the Handbook do not comprise all revenue sources available to local governments. Other sources, such as general obligation and revenue bonds, school taxes, constitutional cC~ire fees. a vnriety of user fees and intergovernmental transfers ( state health grants ), contribute to local government revenues. The nature and scope of these revenue sources are varied and broad and are not examined with the group of revenues discussed in this Handbook. However, a complete listing of revenue sources available to local government is provided as Appendix A.
In keeping with the emphasis on general purpose local government, the Handbook does not address revenue sources used to support education or sources peculiar to quasi-governmental agencies such as water authorities, or other special taxing districts.
There are other publications of the Department of Community Affairs which address other revenue sources such as Investing Idle Funds, Financing Water and Sewer Improvements, General Revenue Sharing in Georgia, Housing Finance Mechanisms, How to Plan for and Finance Sanitary Landfills and How to Assess the Impact of Freeport Exemptions on Local Tax Revenues. Copies of these publications and a listing of all publications of the Government Information Division are available upon request.
What are the major changes in this version of the Handbook and the 1983 version?
Since A Handbook of Local Government Revenue Sources was printed in September, 1983, many laws have been passed related to various revenue sources. The major changes which have been incorporated in the 1987 revision are:
2

o The Special Purpose Local Option Sales Tax was established as a revenue source in 1985. Amendments were enacted by the 1987 General Assembly.
o Act 1668 in 1986, authorized counties to collect business and occupational license taxes and license fees in unincorporated areas of the county. Prior to the 1986 law, specific local acts were required for such authority.
Other legislative changes may be generally characterized as refinements, clarifications or changes in definitions such as:
o Tangible property exempted from ad valorem taxes now includes freeport exemptions for business inventory (where applicable locally) ;
o Malt beverages or wine with less than 1/2 of 1% alcohol is exempt from the local excise tax;
o Veterinary medicine may be subjected to occupation taxes; o Prescription drugs, prescription glasses, insulin and oxygen are
exempted from the local option sales tax; o State and local government employees traveling on official
business are exempted from the hotel-motel tax; and o Expanded options to local governments for the hotel-motel tax.
Finally, some additional changes are made based on comments received from reviewing agencies. This category of changes include:
o Penalties imposed for violating or cancelling a covenant which establishes property for bona fide agricultural use;
o The actions required for new municipalities to become "qualified" for purposes of the local option sales tax;
o Alternatives to a municipal referendum for municipalities to enact excise taxes for alcoholic beverages; and
o Two revenue sources not previously addressed - the special franchise tax and the motor vehicle tag collection fees - are added to the Handbook.
To what extent are these revenue sources bein~ used in my cOmmunity and communities of similar size?
Local officials using the Handbook may desire specific information about
3

amounts of revenue generated by each Source in their own or similarly sized municipalities or counties. Georgia Local Government Finances: Fiscal Planning Guide, discussed in Appendix D, contains comparative information on amounts of revenues from all sources for Georgia's counties and cities, by size. However, the Fiscal Planning Guide does not contain specific information for each of Georgia's counties and cities. To request specific information, use the form in the back of this Handbook. Are there any changes or additions which you think should be included in the Handbook? Are there other revenue sources of which you would like to know more? The Department of Community Affairs welcomes suggestions from you. Please call or write:
Ms. Lynn Thornton Assistant Commissioner Georgia Department of Community Affairs 40 Marietta Street, N.W. #800 Atlanta, Georgia 30303
404/656-5526 A form is included on the last page of the Handbook. It may be helpful to you in providing us comments and suggestions.
4

I I . PROPERTY TAXES
Introduction to County and Municipal Ad Valorem Property Taxes
What is the ad valorem property tax?
The Ad valorem property tax is a tax applied to tangible real and personal property owned by individuals or corporations, residents or non-residents. All real and personal property is taxed by counties and municipalities unless otherwise exempted by State law.
The State regulates municipal and county property taxation through levy of a one-quarter mill State tax on the assessed value of all real and personal property subject to taxation. Counties collect this tax, and the proceeds are transferred to the State (Article 7, Section 1, Paragraph 2 (a) of the State Constitution) .
The General Assembly has by statute authorized cities and counties to levy ad valorem taxes pursuant to Constitutional authority.
The ad valorem tax on real and personal property is applied to the fair market as determined by the tax assessor. With certain exceptions, each property is assessed at 40 percent of its fair market value.
What types of real and personal property are subject to the ad valorem property tax?
All residential, commercial, industrial, public utility, farm, and forest land is subject to assessment. In addition, motor vehicles, mobile homes, special franchises, and property of airline companies are subject to the tax.
Does State law provide for preferential assessment of certain types of tangible real property?
Yes. Real property devoted continuously to bona fide agricultural purposes may be assessed at 75 percent of the value at which other tangible real property is assessed (75 percent of 40 percent), subject
5

to the following conditions and limitations.
1, The primary use of the real property is good faith commercial production of agricultural, horticultural, floricultural, forestry, dairy, livestock, poultry, apiarian, and all other forms of farm products.
2. The preferential assessment applies to only the value which is $100,000 or less of the fair market value of real property devoted to the storage or processing of agricultural products.
3. The property does not qualify for preferential assessment unless it is owned by (a) one or more natural or naturalized citizens, (b) a family-farm corporation comprised of related individuals which derive 80 percent or more of its gross income for agricultural production on the property, (c) an estate or (d) a trust.
4. No one person having a beneficial interest in bona fide agricultural property shall receive preferential assessment for more than 2,000 acres.
5. The owner of agricultural property seeking preferential assessment must agree by covenant with the appropriate taxing authority to maintain the eligible property in bona fide agricultural use for a period of at least ten years. Cancellation or violation of the covenant will result in substantial penalties on the property owner.
In addition to the above conditions and limitations, State law contains various other requirements which must be met in order to maintain eligibility of agricultural land for preferential assessment. Please consult a.C.G.A. Sec 48-5 et. seq. for the text of State law governing this subject.
Are any types of tangible property specifically exempted by State law from ad valorem taxes?
Yes. a.C.G.A. Sec. 48-5-41 contains an extensive list of exemptions from this tax. The following is a partial list of the major types of
6

exemptions:
1. all public property (but see 48-5-41(a) (1) (b) for exceptions); 2. places of religious worship or burial, non-profit hospitals,
institutions of public charity, and building used as a college, academy, or seminary of learning; 3. air and water pollution control facilities; 4. tools and implements of trade or manual labor; 5. all personal clothing and effects, household furniture, and other personal property used within the home; 6. domestic animals not exceeding $300 in value; 7. farm products grown in Georgia and held by their producer during the one year after their production; 8. a residential homestead exemption of $2,000 (additional exemptions are granted under specific conditions); 9. foreign merchandise in transit; 10. freeport exemptions for business inventory; and 11. all tangible personal property (except motor vehicles, trailers and mobile homes) if the actual fair market value of the tangible personal property does not exceed $500.00.
How is the ad valorem property tax applied to motor vehicles and mobile
~?
Motor vehicles and mobile homes are subject to the ad valorem property tax in basically the same manner as the ad valorem tax on real property. Taxes due on vehicles and mobile homes must be paid annually to the county tax collector in the county where they are located. However, certain aspects of motor vehicle and mobile home taxation are treated differently by State law.
First, ad valorem taxes imposed on motor vehicles and mobile homes must be imposed on fair market value determined by the State and adjusted to the 40 percent assessment and mill rate levied by the taxing authority on tangible property for the previous calendar year.
Second, motor vehicles must be registered annually and mobile homes require an annual location permit. Motor vehicle license plates and mobile home permit decals are normally obtained when motor vehicles and mobile home taxes are paid.
Third, motor vehicle and mobile home dealer inventories are assessed
7

at a value which is 75 percent of the assessed value determined by the Department of Revenue for other motor vehicles and mobile homes. In addition, driver education motor vehicles used exclusively for public purposes are exempted from all ad valorem taxes imposed by any tax jurisdiction in this State.

Fourth, motor vehicles and mobile homes in transit and not actually in a dealer's inventory on January 1 of each year are not subject to taxation for that year.

Are tax collectors compensated for collecting taxes on motor vehicles and mobile homes?

Yes. State law requires that the following tax collection commissions be paid to tax collectors on the net collections made during any calendar year:

(1) Up to and including $6,000 (2) Over $6,000 and not exceeding $14,000 (3) Over $14,000 and not exceeding $24,000 (4) Over $24,000 and not exceeding $36,000 (5) Over $36,000 and not exceeding $52,000 (6) Over $52,000 and not exceeding $76,000 (7) Over $76,000

6% 5% 4% 3% 2 1/2% 2% 1 3/4%

The above commissions may be retained by the appropriate tax officials, except in instances where such officials have been placed on a salary in lieu of a fee system of compensation, in which case the commissions must be turned over to the county treasury. The fees and commissions authorized by State law must be disposed of in accordance with local laws.

How is the ad valorem property tax applied to the property of public utilities?

The property of public utilities is taxed like all other property SUbject to the ad valorem property tax, except that the property is assessed by the State. Each class of property is separately identified and valued in the public utility tax return. The manner in which public utility tax returns are administered, however, is also different.

8

Tax returns of public utilities are made directly to the State Revenue Commissioner, not to the county tax commissioner or tax collector. The chief executive officer of the utility apportions in the return the fair market value of his utility's properties in this State among the tax jurisdictions in which the utility owns property, railroad track mileage, transmission lines, pipelines, operational routes, or other similar property. The Commissioner uses this information along with other information reflecting the public utility's investment in property to assess and apportion fairly and equitably the property among the various taxing jurisdictions.
At least once a year, the Commissioner must make a report to the board of tax assessors in each county for utility property located within the county which is subject to ad valorem taxation. Each report itemizes by public utility each parcel of real property or type of personal property and must specify the value of each parcel of real property or item of personal property. The county board of tax assessors must make a copy of the report available for public inspection at the office of the board.
Legislation enacted by the 1987 General Assembly (H.B. 610) provides for penalties against any public utility company which fails to file a timely tax return. The amount of the penalty is 10% of the amount of the taxes. In addition to the monetary penalty, domestic businesses may forfeit their charter and foreign corporations may have their permit revoked.
How is the ad valorem tax applied to the property of airline companies?
Each airline company operating in this State must make a property tax return of its flight equipment to the State Revenue Commissioner each year before March 1. Each type of equipment must be separately identified and valued.
The aircraft are assessed by the Department of Revenue in the same manner as other personal property in the State. The Department apportions the valuation of each type of aircraft among the tax jurisdictions of the State through which the company operates.
9

Where can additional information and assistance regarding the ad valorem property tax be obtained?
O.C.G.A. Sec. 48-5 et. seq. contain the text of state law governing this tax.
Other publications which may be consulted include:
The Property Tax; A Primer, Council of State Governments, Lexington, Kentucky, 1978.
Statistical Report for 1981, Georgia Department of Revenue, Atlanta.
Handbook of Specific Ways to Increase Revenues and Decrease Expenditures, Institute of Government, University of Georgia, Athens, Georgia, May, 1979.
Assistance may be obtained by contacting the Property Tax Division of the Department of Revenue at (404) 656-4240.
County Ad Valorem Property Tax
Are counties authorized to levy and collect ad valorem property taxes~
Yes. Article 9, Section 4 of the State Constitution authorizes the county governing authority to exercise the power of taxation in accordance with constitutional limits or as authorized by general law.
For what purposes may county property tax revenues be spent?
The governing authority of any county may expend public funds to perform any public service or function authorized by the State Constitution or by general law. Please consult Article 9, Section 2, of the Constitution for a listing of types of services which counties may provide. O.C.G.A. Sec. 48-5-220 also contains an extensive listing of purposes for which county taxes may be levied and collected.
10

Are there any limits on the millage rate which may be imposed by a county?
There is no limit established in state law. However, limits may be established by local laws or local constitutional amendment.
What other requirements must a county meet when assessing the property Lud.
The county governing authority must assess the tax for the year by order. .A,. cbpy'>~f-the~order._shall be advertised for 30 days at the door of the courtnousecanaih a public newspaper if one is published within the limits of the county. A copy of the order shall also be furnished to the tax commissioner or tax collector.
What property is subject to the county ad valorem property tax?
The tax applies to all real and personal property taxed by the State. Property taxed is, with some exceptions, assessed at 40 percent of its fair market value. O.C.G.A. Sec. 48-5-47 et. seq. identify property subject to or exempt from ad valorem taxation by general law. For example, counties may exempt elderly homeowners from school ad valorem taxes. See also previous section, "Introduction to County and Municipal Ad Valorem Property Taxes."
Nbere may additional information regarding this tax be obtained?
Further assistance may be obtained by contacting the Property Tax Division of the Department of Revenue at (404) 656-4240.
Municipal Ad Valorem Property Tax
Are municipalities authorized to levy and collect ad valorem property taxes?
Yes. Article 9, Section 4 of the State Constitution authorizes the municipal governing authority to exercise the power to levy and collect taxes and fees within the corporate limits, subject to general and local laws. This tax is subject to the same general limits and requirements
11

described in the previous sections, ("Introduction to County and Municipal Ad Valorem Property Taxes," and "County Ad Valorem Property Tax,") in regard to millage rate, purposes of expenditures, and properties exempted.
Are there exemptions from the municipal property tax?
Yes, O.C.G.A. Sec. 48-5-40 et. seq. contain an extensive number of exemptions from the property tax, including the homestead exemption, exemption of personal goods, public property, places of religious worship, tools and implements of trade, commercial fertilizers, and many more. Article 9 of the State Constitution provides for locally imposed exemptions.
What must a municipality do to establish the fair market value of property to be taxed?
In determining the fair market value of properties for tax purposes, the municipality must use the fair market value determined for properties for county ad valorem taxation purposes. This information is furnished without charge by the county to the municipality. Municipalities may establish their own millage rate and own billing system.
Are there any limits on the millage rate which may be imposed by a municipality?
There is no limit established in state law. However, limits may be established by local laws or local constitutional amendments.
Are municipalities authorized to levy taxes for other than general pUkpose local governments?
Every municipality is authorized to levy and collect municipal taxes upon all taxable property within the corporate limits to provide financial assistance to its development authority or a joint county and municipal development authority for the purpose of developing trade, commerce, industry, and employment opportunities. The tax levied for this purpose may not exceed 1 mill per dollar upon the assessed value of the property taxed.
Each municipality may levy and collect taxes for the purpose of
12

paying pensions and other benefits and costs under a teacher retirement system.
Additionally, municipalities are authorized to create special taxing districts such as Fire Districts.
How can assistance and information regarding this tax be obtained?
By contacting the Property Tax Division of the State Department of Revenue at (404) 656-4240
Penalty and Interest on Delinquent Ad Valorem Taxes
What additional charges are reQUired for delinQUent taxes?
Any person failing to file a tax return by the designated due date must pay interest which accumulates at the rate of one percent per month or portion of a month until the tax is paid.
When a person willfully fails to pay the ad valorem tax within 90 days of the due date, the person must pay:
o a penalty of 10% of the amount of the taxi
o interest at the rate of 1% per month or portion thereof, computed from due datei and
o the amount of the ad valorem tax.
How are the penalty and interest collected? The penalty amount and interest due are in addition to the tax amount
due and are collected in the same manner as the particular tax in question. The collection method depends on the type of tax which was not paid in each instance. Homestead priorities are exempted from this penalty, (but not the interest) if the amount delinquent is less than $500.
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Where can additional infOrmation and assistance regarding tax penalti~ and interest be obtained?
C.C.G.A. Sec. 48-2-44 et. seq. contain the text of State law governing this subject. A publication entitled Handbook for Collecting Delingyent Property Taxes, published by the University of Georgia, may also be consulted.
Field Services offices of the Department of Revenue may be contacted in Albany, Athens, Atlanta, Augusta, Columbus, Rome, Douglas, Macon Or Savannah for assistance.
Tax Executions
What is a tax execution?
A tax execution is an action taken by a taxing authority (the State, a county, or municipality) to collect delinquent taxes of any kind.
Why should cities and counties be concerned about collecting delinquent taxes?
Failure to collect delinquent taxes results in a loss to local governments of approximately 10 percent of revenue annually. When a local government does not actively collect delinquent taxes, the revenue loss is compounded.
What must a local government do to collect delinquent taxes through tax executions?
State law prescribes specific procedures to be followed by county tax officials in collecting delinquent taxes. However, State law may not apply to city collections. City ordinances which specify collection procedures often are similar to county collection procedures. The procedures to be followed by counties are as follows:
14

1. Check with the tax collector to determine if taxes are delinquent and, if so, in what amounts. The tax commissioner maintains a list of delinquent taxpayers and the amounts they owe.
2. Proclaim the lien. The tax commissioner issues executions (Li
~ against all delinquent taxpayers and enters their names in the execution docket in the superior court clerk's office with an itemized statement of the taxes due.
3. Make the pre-levy notification. Tax commissioners are required by law to publish at the courthouse door for 30 days the list of defaulters and the taxes due.
Other actions not required by law which may be taken include: sending a notice of delinquency to the taxpayer; publishing the list of delinquent taxpayers in a newspaper; making courtesy contacts by visits or phone.
4. If the above actions are not successful, the executions should be turned over to the levying officer (usually the sheriff), who has 90 days to either collect the taxes or return the uncollected execution to the tax commissioner. In many counties, the tax commissioner or tax collector serves as ex officio sheriff for the purpose of executions. If the tax is not voluntarily paid, the delinquent taxpayer may indicate which property should be sold for delinquent taxes. The levying officer, however, may select the property to be sold and need not follow the taxpayer's suggestion.
5. Sell the property. The officer authorized to sell the property must publish for four weeks a notice of sale of the land and other property in the county newspaper The time, place, and manner of the sale of real and personal property for taxes due municipalities shall be the same as that provided by law for sheriffs' sales for state and county taxes. The sale must be made in public between 10 A.M. and 4 P.M. on the first Tuesday of the month to the highest bidder. The sale must be recorded, and the deed must be made out to the purchaser.
15

6. Legislation enacted by the 1987 General Assembly (H.B. 439 and H.B. 559) provides that the costs of advertisement and administrative costs for property to be sold will be paid by the property owner or by levy and sale of the property.
7. An administration fee shall be collected in the amount of 5% of the tax or $250, whichever is less. The fee should not be less than $50 for expenses incurred by the county in the issuing of an execution and the administration of the levy.
Is redemption of property sold at a tax sale permitted?
Yes. The delinquent taxpayer or any person having an interest in or lien on the property may buy it at any time within 12 months from the date of sale by paying the redemption price. The redemption price is the amount paid at the sale, plus 20 percent of that amount for the year, or fraction thereof, between the sale date and redemption date.
Delinquent taxes may also be satisfied by selling the lien instead of the property. This is done to reduce the expense of selling property. The taxpayer's redemption rights remain the same.
Is there an alternative to a tax execution?
H.B. 188, enacted by the 1987 General Assembly, gives tax collectors and tax commissioners the authority to reduce a tax execution to a judgement. This authority was previously only available to the state revenue commissioner.
Where can additional information and assistance regarding tax executions be obtained?
O.C.G.A. Sec. 48-3 contains the text of State law governing tax executions. You may also wish to consult the Handbook for Collecting Delinguent Property Taxes published by the Institute of Government, University of Georgia.
Field Services offices of the Department of Revenue may be contacted in Albany, Athens, Atlanta, Augusta, Columbus, Rome, Douglas, Macon or Savannah for assistance.
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The Intangible Personal Property Tax
What is the intangible personal property tax?
The intangible property tax is an ad valorem tax levied on certain types of property which are neither real property nor tangible personal property. The classifications of intangible personal property are:
1. money; 2. collateral security loans; 3. stocks; 4. accounts receivable and notes not representing
credits secured by real estate; 5. bonds and debentures of all corporations; 6. short-term notes secured by real estate; 7. restricted foreign intangibles; or 8. patents, copyrights, franchises, and all other classes,
and kinds of intangible personal property not otherwise enumerated.
What are the intangible personal property tax rates?
1. with the exception of collateral security loans, long-term notes secured by real estate, stocks, bonds, debentures, the remaining intangible personal property listed above including all restricted intangibles are taxed at the rate of 10 cents for each $1,000 of fair market value.
2. collateral security loans are taxed at the rate of 25 cents per each $1,000 of fair market value.
17

3. all stocks in corporations (except those exempted) are taxed at the rate of $1 for each $1,000 of fair market value.
4. corporate bonds and debentures are taxed at the rate of $1 for each $1,000 of fair market value.
Are there any specific types of intangible personal property exempted from this tax?
Yes. The following are exempted:
1. debts and obligations of Federal, State of Georgia and Georgia local governments and public institutions;
2. certain types of pensions and related plans exempted from federal income taxes by the Internal Revenue Code;
3. intangible personal property owned by religious, educational; or charitable institutions;
4. intangible personal property taxed in another state which is owned by a person domiciled in this state;
5. common voting stock of a subsidiary corporation not doing business in this state but which is owned by a parent domestic corporation doing business in this state (parent corporation owns 90% of common voting stock of the subsidiary) .
6. stock of a corporation organized under the laws of this state if the corporation pays all taxes in this state as provided by law;
7. stock of a domesticated foreign corporation which pays to this state or its political subdivision all taxes as provided by law. (definition clarified H.B. 724, 1987 General Assembly);
8. mandatory reserve requirements on depository financial institutions;
9. stocks of corporations and associations established by the u.s.
Congress such as Government National Mortgage Association; 10. mandatory deposits with the Federal Reserve Bank; 11. federal funds sold and other intangible assets under resell and
repurchase agreements; 12. customer's liabilities to depository financial institutions on
acceptances outstanding; 13. funds from the lease of tangible personal property provided that
tangible property tax is due on such property; and 14. intercompany loans or advances from a parent corporation to a
subsidiary or vice versa.
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WhQ must file an intangible QrQperty tax return?
Every persQn nQt Qtherwise exempted whQ Qwns intangible persQnal prQperty classified fQr taxatiQn must file a return if the tax due exceeds $5. The return is filed with the State Qn Qr befQre April 15 Qf each year (FQrm PL-159) .
Is any persQn Qr Qther QrganizatiQn exempted frQm filing an intangible QersQnal QrQQerty tax return?
Yes. Intangible persQnal prQperty belQnging tQ the fQllQwing is exempted:
1. the United States; 2. this state Qr its pQlitical subdivisiQns; 3. a religiQus, educatiQnal, Qr charitable QrganizatiQn; 4. trusts exempted by the Internal Revenue CQde; 5. a nQn-prQfit cQQperative assQciatiQn.
HQW is the revenue frQm the intangible QersQnal QrQQerty tax distributed?
The tax cQmmissiQner Qr tax cQllectQr distributes the revenues from the intangible personal property tax Qn the basis Qf millage rates levied by cQunties, schQQl bQards and municipalities Qn real and persQnal prQperty levied in the immediately preceding year. Revenues received by each taxing jurisdiction are based Qn the prQpQrtiQn that the millage rate for each jurisdictiQn bears to the aggregate millage rate fQr all participating jurisdictiQns.
Revenues distributed to municipalities having independent schQQl systems suppQrted by municipal taxes are divided between the municipality and the schQQl system in prQpQrtiQn tQ the ratiQ which the municipal real and personal prQperty tax millage rate levied fQr general, nQn-schQol purpQses bears tQ the amQunt of the millage rate levied fQr schQQl purpQses.
Municipalities, cQunties, and schQQl districts are required tQ submit
19

certificates to the tax commissioner or tax collector which indicate millage rates levied by them and which serve as the basis for distributing intangible personal property tax revenues.
Where can additional information and assistance regarding the intangibl~ personal property tax be obtained?
See O.C.G.A. Sec. 48-6-20.
The Intangible Tax Section, Property Tax Division, of the Georgia Department of Revenue may be contacted at (404) 656-4247.
The Georgia Department of Revenue's annual Statistical Report contains data indicating intangible property tax assessments levied by counties. The Research Office of the Department of Revenue may be contacted at (404) 656-4234 in Atlanta for assistance in explaining information contained in the Statistical Report.
The Intangible Recording Tax
What is the intangible recording tax?
The intangible recording tax is a tax placed on instruments filed to secure real estate notes. The Georgia Code classifies such notes as either long-term notes or short-term notes.
A long-term note secured by real estate is any note secured by mortgages, deeds to secure debt, or any other form of security instrument, when any part of the principal of the note falls due more than three years from the date of the note and creating a lien or encumbrance on real estate for such purposes. A short-term note secured by real estate is any note which would be a long term note secured by real estate were it not for the fact the entire principal of the note falls due within three years from the date of the note or other instrument executed to secure the note. The recording tax must be paid only on long-term notes as defined above.
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How is the intangible recording tax paid?
Every holder of a long-term note secured by real estate must record the instrument executed to secure the note within 90 days of its execution date with the county in which it is located. The security instrument is presented to the tax commissioner or tax collector.
The tax collector then collects the recording tax due at the rate of $1.50 for each $500, or fractional part, of the face amount of the note. The tax on any single note may not exceed $25,000.
When the tax is paid, the tax collector must attach a certification of payment to the security instrument.
After the recording tax is paid. how is the security instrument filed?
The holder of the note must present the security instrument (mortgage, security deed, etcetera) and the certificate of payment of the tax to the clerk of the superior court of the county. The clerk then files the security instrument for record. The certificate attached to the security instrument is filed with the security instrument. The instrument may not be filed until the tax has been paid.
How are short-term notes secured by real estate taxed?
Short-term notes secured by real estate are subject to ad valorem taxation at the rate prescribed for other intangible personal property, with certain exceptions previously identified in the section on the intangible property tax, which is 10 cents for each $1,000 of fair market value.
The revenues are distributed in the proportion that the various millage rates levied on real and personal property by each taxing jurisdiction bear to the aggregate millage rate of all jurisdictions combined.
Where can additional information regarding the intangible recording tax be obtained?
O.C.G.A. Sec. 48-6-60 et. seq. contain the full text of State law governing this tax.
21

The Intangible Recording Tax Section, Property Tax Division of the Department of Revenue may be contacted at (404) 656-4244.
The annual Statistical Report published by the Georgia Department of Revenue contains a limited amount of intangible recording tax data.
The Real Estate Transfer Tax
What is the real estate transfer tax?
The real estate transfer tax is imposed on each deed or instrument by which any real estate sold is granted or conveyed to a purchaser. The tax rate is $1 for the first $1,000 or fractional part of $1,000 and 10 cents for each additional $100. The value of the realty interest or property conveyed must exceed $100 for the transfer tax to become effective.
Does State law exempt certain instruments. deeds. etc. from this tax?
Yes. The real estate transfer tax does not apply to:
1. any instrument securing a debt; 2. any deed of gift; 3. any deed or similar instrument to which the United States, this
state, public authority, non-profit public corporation, or agency, board, commission, department, or political subdivision of either the United Stated or this state is a part; 4. real property which is leased; 5. real estate transfers connected with a divorce; 6. orders for support awarding interest in real property; 7. deeds issued in lieu of foreclosure and which meet certain minimum requirements of recording and term.
22

Who pays the real estate transfer tax. and how is the tax collected? The transfer tax is paid by the person executing the deed or by the
person for whose use or benefit the deed is executed. The tax must be paid to the clerk of the superior court before the deed may be filed for record.
Upon payment of the correct tax amount, the clerk must attach to the deed a certification of the fact that the tax has been paid, the date, and the amount. The certificate and the deed must then be recorded together. Clerks must remit to the State at least once every 30 days all funds collected, which are then redistributed among the State, municipality, and county, in proportion to their respective millage rates. Where can additional information and assistance regarding the real estate transfer tax be obtained?
By contacting the Property Tax Division of the State Department of Revenue at (404) 656-4244.
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III. ALCOHOLIC BEVERAGE TAXES
Local Excise Tax on Malt Beverages
Are municipalities and cQunties regyired tQ impQse an excise tax Qn the sale Qf malt beverages?
Yes. State law requires municipalities Qr cQunties where the sale Qf malt beverages is authQrized and licensed tQ impQse an excise tax Qn the sale Qf malt beverages in additiQn tQ the State excise tax levied. BQth the IQcal tax and license are mandatQry.
What is the malt beverage excise tax rate. and whQ pays it?
A tax Qf five cents per 12 Qunces and a prQpQrtiQnate tax Qf the same rate Qn any fractiQnal parts Qn all cQntainers except barrels Qr kegs is required. The tax required Qn tap Qr draft beer is $6 fQr each CQntainer cQntaining nQt mQre than 15 1/2 gallQns and at the same rate fQr fractiQnal parts, if the beverage is SQld in bulk cQntainers such as kegs Qr barrels.
The tax is paid by the whQlesale dealer. State law requires the whQlesale dealer tQ file a mQnthly repQrt with the municipality Qr cQunty which itemizes the exact quantities by size and cQntainer Qf malt beverages SQld. The tax amQunt due must be paid mQnthly by the whQlesale dealer tQ the municipality Qr cQunty.
H.B. 180 passed by the 1987 General Assembly, exempts malt beverages which cQntain less than 1/2 Qf Qne percent alcQhQI frQm the malt beverage excise tax.
What Qther aspects Qf State law gQverning lQcal excise taxes Qn malt beverages shQuld cQunties and municipalities be familiar with?
CQunties Qr municipalities permitting the sale Qf malt beverages are required tQ enfQrce State laws applicable tQ lQcal taxatiQn and licensing Qf malt beverage sales, particularly with regard tQ collectiQn and payment Qf the IQcal excise tax.
24

State law prohibits the use of decals, stamps, or other markings on malt beverage containers designating the county or municipality in which a sale of malt beverages is made or in which licensed retailers reside to whom such beverages are delivered.
Where can additional information and assistance be obtained by cities and counties considering the imposition of this tax?
O.C.G.A. 3-5-80 et. seq. contain State law governing the local excise tax on malt beverages. O.C.G.A. 3-5-40 et. seq. contain local licensing requirements applicable to sales of malt beverages.
Municipalities seeking assistance in imposing and collecting the tax may contact the legal department of the Georgia Municipal Association at (404) 688-0472. Counties should contact the Association County Commissioners of Georgia at (404) 522-5022.
Local Excise Tax on Wine
Are cities and counties authorized to impose an excise tax on the sale of wine by the package?
Yes. At its discretion, a city or county may levy an excise tax on the first sale or use of wine by the package. The tax may not exceed 22 cents per liter, and a proportionate tax on all fractional parts of a liter must be levied at the same rate.
Does State law regulate the administration of the local excise tax on
~ .?
The only restriction in State law on the levy of this tax is that no county excise tax on the sale of wine may be imposed within any municipality imposing the same tax. Otherwise, the tax rate (within the limit established) and method of collection are to be determined by the local government levying the tax as long as the sale of wine in the jurisdiction is licensed by the county or municipality.
25

What other points should be known by lQcal gQyernments cQnsidering the levY Qf the lQcal excise tax Qn wine?
First, the sale Qf wine is subject to a State excise tax which varies frQm 11 cents per liter to 67 cents per liter, depending Qn the type of wine and SQurce of fruits and berries cQnstituting the wine.
SecQnd, the following wines are exempt altQgether from excise taxes: 1. wine sold to and used by established Churches and
synagogues for use in sacramental services; 2. any sale of wine exempted under the ConstitutiQn of
the United States. 3. wine which cQntains less than 1/2 of Qne percent alcQhQl. Third, the local tax rate must be established in the ordinance gQverning the sale of wine.
Where can a municipality Qr cQunty obtain additional infQrmatiQn and assistance in regard to this tax?
O.C.G.A. 3-6-40 et. seq. and 3-6-60 regulate the licensing and taxation of the sale of wine by counties and municipalities.
Municipalities needing assistance in authorizing and administering the local excise tax on wine shQuld contact the legal department of the Georgia Municipal AssQciation at (404) 688-0472. Counties should contact the Association CQunty CQmmissiQners Qf Georgia at (404) 522-5022.
26

Local Excise Tax on Package Sales of Distilled Spirits
Can either a municipality or a county levy an excise tax on package sales of distilled spirits?
Yes. State law authorizes the governing authority of each municipality or county where the sale of distilled spirits is permitted to levy an excise tax on their sale at either the wholesale or retail level.
Can a county impose an excise tax on distilled spirits within a municipality which imposes the same tax?
No. No county excise tax may be imposed, levied, or collected in any portion of a county in which a municipality is imposing the same tax on distilled spirits sold by the package.
Is there a limit placed on the rate of this tax?
Yes. The tax cannot exceed 22 cents per liter and a proportionate tax at the same rate on fractional parts of a liter.
What must a city or county do to obtain local authorization to levY the excise tax on distilled spirits?
A referendum approving the issuance of licenses authorizing the sale of distilled spirits in the jurisdiction levying the tax must be held. When a petition signed by at least 35 percent of the registered voters is filed with the election superintendent, the superintendent must call a special election. A majority of votes cast in favor of licensing the manufacture, sale, and distribution by the package of distilled spirits is required to authorize the excise tax in the county or municipality. If the referendum passes countywide and a majority of the voters in the municipality voted for the referendum, then the municipality is authorized to levy the excise tax without the necessity of a separate municipal referendum to authcrize the sale of distilled spirits. If the vote is against the sale of distilled spirits, another election may not be held for two years.
27

If the package sales of distilled spirits is ap~ro:ed in a special election, then an ordinance must be adopted establ~sh~ng licensing
qualifications, license fees, and tax rates.
,Please consult applicable parts of Chapter IV of this Handbook for regulations governing issuance of alcoholic beverage licenses.
What else do municiQalities and counties need to know about the local excise tax on Qackage sales of distilled sQirit?
State law does not impose requirements on the administration of this tax. The methods of imposing, paying, and collecting the tax must be determined by the governmental jurisdiction levying the tax.
Where can a municiQality or county obtain further information and assistance in regard to the excise tax on distilled sQirits?
O.C.G.A. 3-4-80 et. seq. contain the text of State law governing this tax. Local governments contemplating a local excise tax on package sales of distilled spirits should not confuse this local tax with the State excise tax on distilled spirits sold by the drink, which is administered in accordance with regulations established by the State Department of Revenue.
Municipalities may obtain assistance in establishing a system for administering this tax by contacting the legal department of the Georgia Municipal Association at (404) 688-0472. Counties should contact the Association County Commissioners of Georgia at (404) 522-5022.
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Local Excise Tax on Sales of Distilled Spirits by the Drinks
Are counties and municipalities authorized by State law to impose a local excise tax on the sale of mixed drinks?
Yes. The governing authority of each municipality and each county may levy and collect a local excise tax on the sale of mixed drinks. However, this tax may not be imposed on the sale of beer and wine by the drink.
What is the procedure to authorize a local excise tax on mixed drinks?
The governing authority of a municipality or county is to request the election superintendent to conduct a referendum for the purpose of determining whether the sale of distilled spirits by the drink should be permitted. If a majority of those persons voting, vote in favor of issuing licenses for the sale of distilled spirits by the drink, then the governing authority may proceed to issue such licenses. Once licensed, sales of mixed drinks are authorized, the governing authority may impose an excise tax on such sales.
Alternative procedures for the sale of mixed drinks by municipalities and counties are specified depending on whether packaged drinks are lawful or unlawful (O.C.G.A. 3-4-91 or 3-4-92). For example, 15% of the registered and qualified voters, in an area where packaged sales are lawful, can cause the election superintendent to call and hold a referendum on the question of selling mixed drinks. Where packaged sales are not lawful, 35% of the registered and qualified voters would be required to call a referendum on the question of selling mixed drinks.
Recent legislation has also expanded the options available to a municipality to impose a local excise tax on mixed drinks. The municipality is not required to hold a referendum separate from the county. The tax will be considered authorized for the municipality if a majority of the voters (in a county referendum) who reside in the municipality voted for the sale of mixed drinks.
If the sale of mixed drinks is disapproved in the referendum election, no election can be called or held within two years after the date of the declaration by the election superintendent of the results of the previous referendum.
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poes State law regnlate loca 1 al~l-i'U~n,~st r at'~on . collection. etc .. of the local excise tax on sale of mixed drinks?
Generally, no. Within authorized limits the rate of taxation and methods of levying and collecting the tax are a matter of local determination. However, in instances where dealers collect the tax, dealers must be allowed a percentage of the tax due in the form of a tax deduction for paying the amount due to the governing authority. Is there a limit on the amount of the excise tax on the sale of mixed drinks?
Yes. State law permits a tax of no more than three percent of the charge to the public for beverages sold by the drink. Please note that this tax is in addition to the 22 cents per liter tax on package sales of distilled spirits.
Where can additional information and assistance be obtained by local governments contemplating the use of this tax?
O.C.G.A. Sec. 3-4-130 et. seq. contain the text of State law governing this local excise tax. O.C.G.A. Sec. 3-4-90 et. seq. contain the State laws governing licensing of the sale of distilled spirits by the drink.
Municipalities may contact the Georgia Municipal Association at (404) 688-0472 for assistance in establishing this tax. Counties should contact the Association County Commissioners of Georgia in Atlanta at (404) 522-5022.
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IV. SALES, USE AND INCOME TAXES
The Local Option Sales Tax
What is the local option sales tax?
The joint county and municipal sales and use tax is commonly referred to as the local option sales tax. When authorized in accordance with requirements stipulated in State law, the tax is levied at the rate of one percent and applies to the same items as the State sales tax, except that the local option sales tax also applies to the sales of motor fuels. As of July I, 1986, 140 counties in the State had approved the levy of a local option sales tax.
Can every municipality participate in the levy of this tax?
While all counties may participate, only "qualified" municipalities may impose the local option sales tax and share in the proceeds of this tax. These municipalities must provide at least three of the following services: water, sewerage, garbage collection, police protection, fire protection, library.
A new municipality which qualifies may request the Revenue Commissioner to give notice of the municipality's existence. Within 30 days after the request from the municipality, the Commissioner will give notice to the county in which the municipality is located. A new distribution certificate must be prepared by the county within 60 days after the notice which specifies how the proceeds will be allocated. Proceeds from the tax will be allocated under the new certificate beginning on the first day of January of the first calendar year which begins more than 60 days after the effective date of the notice.
What statutory requirements must be met by a county or a municipality before a local option sales tax may be authorized?
1. The governing authority of the county or any qualified municipality must submit a copy of a resolution calling for a referendum on the question of the one percent sales tax levy to
31

the county election superintendent If more than one-half of the votes cast are in favor of the tax, then the tax must be levied.
2. Following approval of the referendum, the governing authority of the county and the governing authority of each qualified municipality in the county must each adopt a resolution imposing the tax. A certified copy of each resolution must be submitted to the State Revenue Commissioner within five days after its adoption.
Are any types of tangible personal property and services exempt from the local option sales tax?
Yes. O.C.G.A. Sec. 48-8-3 contains a list of over 50 items specifically exempted from this tax. One of the latest exemptions applies to prescription drugs, prescription glasses, insulin and oxygen. The number and type exemptions directly influence the amount of revenue local governments can expect to receive from this source.
Are there any other statutory re~uirements to be met before the local option sales tax may be distributed in those counties where the tax is authorized by referendum?
State law requires that jurisdictions in which the tax is authorized must agree on a formula for distributing the tax proceeds among them. The agreement must be submitted in writing in the form of a "Certificate of Distribution" which must be submitted to the State Revenue Commissioner within 60 days after the tax is imposed. The Commissioner distributes the proceeds of the tax in accordance with directions in the certificate formula. If the required certificate is not received by the State within the 60-day period, authority to impose the tax is suspended, and the proceeds will be held by the Revenue Commissioner until a distribution certificate is received. If it is not received within 120 days after suspension, funds held by the Commissioner are transferred to the State.
How is the formula for distributing the tax proceeds established?
Whatever formula is established is a matter of local determination by
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the elected city and county officials. A pUblication entitled Negotiating the Distribution of Local Option Tax Reyenue: A Manual for Cities, Georgia Municipal Association, describes examples of formulas which may be used. This publication also contains a model certificate of distribution as well as information on the subject of the local sales tax.
How is the local option sales tax administered?
The Sales and Use Tax Division of the State Department of Revenue collects the taxes from returns prepared by dealers. After the Division deducts a one percent collection fee, proceeds from the tax are returned to participant local governments on a monthly basis.
Is any adjustment of the millage rate regyired in order to reflect the additional revenues obtained from this tax?
Yes. For the year following the initial year in which the tax is levied and for all subsequent years, each county and each municipality receiving proceeds from the tax must adjust annually the millage rate for ad valorem taxation of tangible property. After the first year in which the tax is levied, the millage rate must be adjusted in order to authorize the levy of the tax in subsequent years. The millage rate must be adjusted as described in the following paragraphs.
1. The governing authority computes the millage rate necessary to produce revenue from the property tax which, when combined with other revenues (excluding the sales tax), will be sufficient to defray estimated expenditures for the year.
2. The millage rate is then reduced by a millage rate which, if levied against property within the jurisdiction, would produce an amount equal to the proceeds of the sales tax received in the preceding year.
3. The tax bill of each taxpayer must show the millage rate calculated in (1.) above as well as the reduced millage rate resulting from the offset of proceeds obtained from the local sales tax. The remainder is the millage rate upon which each taxpayer's bill is based.
33

4. The tax authority must also show on the tax bill of each ad valorem taxpayer the dollar amount of reduction of ad valorem property taxes which the taxpayer has received due to proceeds of the sales tax.
Where can local governments obtain additional information and assistance pertinent to the local option sales tax?
Municipalities should contact the Georgia Municipal Association at (404) 688-0472 for assistance in establishing this tax. Counties should contact the Association County Commissioners of Georgia at (404) 5225022. In addition, cities and counties may contact the Sales and Use Tax Division of the State Department of Revenue at (404) 656-4060.
Special Purpose Local Option Sales Tax (Special Purpose County Sales and Use Tax)
What is the Special Purpose Local Option Sales Tax? The governing authority of any county may impose a special sales and
use tax for a period of time not to exceed five years (four years if tax is for roads, streets and bridges). The tax imposed is at a one percent rate and is subject to the requirements of referendum approval.
The tax was effective February 28, 1985 as a single purpose tax. H.B. 479 enacted by the 1987 General Assembly amended the original legislation to allow the tax to be used for more purposes and for combinations of purposes.
As of July 1, 1986, 26 counties were using the special purpose local option sales tax.
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For what purposes may the tax be used?
1. roads, streets and bridges:
2. a capital outlay project or projects of the county for the use of or benefit of the citizens of the entire county - county courthouse, civic center, hospital, jail, library, a coliseum, sanitary landfill or any combination of such projects;
3. a capital outlay project or projects which will be operated by a joint authority or authorities of the county and one or more municipalities within the county:
4. a capital outlay project or projects to be owned and/or operated by the county, one or more municipalities or any combination thereof:
5. a cultural facility, a recreational facility, a historic facility or a combination of such purposes:
6. a water, sewer, a water and sewer or a combination of such projects:
7. the retirement of previously incurred general obligation debt (excluding debt for roads, streets or bridges), if such previously incurred general obligation debt was incurred for a project for which new general obligation debt may be incurred

What statutory requirements must be met before the special county one percent tax may be imposed?

1. The governing authority of the county is to notify the county

election superintendent by forwarding a copy of the resolution

...

or ordinance of the governing authority calling for the

imposition of the tax.

2. The ordinance or resolution is to include the purpose, the maximum period of time for which the tax may be imposed, the maximum cost of the project and if general obligation debt is to be used in combination with tax.

35

3. The superintendent will set the date of the election for not less than 30 nor more than 45 days after receiving the information on the tax.
4. If more than one-half of the voters cast their vote for the tax, then the tax will be imposed. If more than one-half of the voters are opposed to the tax, it cannot be submitted to the voters again for another 12 months.
Are there any other regyirements/restrictions on the use of the tax?
1. No county can impose at anyone time more than a single one percent special county sales and use tax. A county may, however, adopt a resolution or ordinance calling for the reimposition of a tax upon the termination of the tax then in effect.
2. Some additional requirements apply if the tax will be used in whole or in part for roads, streets and bridges.
3. The tax will be repealed on the date the current 3% state sales and use tax increases to a rate in excess of 3%.
How is the tax administered?
The tax is administered by the Commissioner, Georgia Department of Revenue for the use and benefit of the county imposing the tax. The state is reimbursed one percent of the amount collected to cover the costs of administration. The remaining proceeds will go to the county imposing the tax.
Are any types of tan~ible property and services exempt from the special sales and use tax?
Yes. O.C.G.A. Sec. 48-8-117 and 118 list items for which this tax cannot be imposed.
36

Where can counties get additional information and assistance?
Counties should contact the Association County Commissioners of Georgia at (404) 522-5022 and the Sales and Use Tax Division of the State Department of Revenue at (404) 656-4060.
The Hotel-Motel Tax
Are municipalities and counties authorized to levy a hotel-motel tax within their respective jurisdictions?
Yes. The governing authority of each municipality and each county may levy an excise tax on the charge to the public for any room, lodging, or accommodations furnished by any person or legal entity licensed by or required to pay business or occupation taxes to a county or municipality for operating a hotel, motel, or any other place in which rooms, lodging, or accommodations are regularly furnished for value. However, no tax may be levied or collected by a county in any portion of the county in which the tax is being levied and collected by a municipality.
At what rate may the tax be levied and are there any requirements for the expenditure of proceeds?
The hotel-motel tax may be imposed under one of three options.
Under the first option, the tax rate may not exceed three percent of the charge to the public for the rooms furnished. Further, the aggregate amount of all sales taxes levied (including local option and State sales tax) may not exceed eight percent of the charge to the public for the rooms furnished.
There is no requirement for the expenditure of revenues generated under the first option unless the county or city spent all or some of the proceeds during the fiscal year which ended on June 30, 1987 for the purpose of promoting tourism, conventions and trade shows. If so, that
37

same percentage must be continued as an expenditure for the promotion of the tourism/travel industry in each fiscal year which begins on or after July 1, 1987.
Under the second option, the hotel-motel tax may be levied at a rate of five percent and the total sales tax cap may be raised to ten percent. If the hotel-motel tax is levied at a rate exceeding three percent, the proceeds in excess of three percent must be expended for the purpose of promoting tourism conventions and trade shows.
Only counties with a population of more than 550,000 or municipalities with a population of more than 400,000 are eligible for the third option. Under this alternative, the hotel-motel tax may be levied at a rate of six percent and the total sales tax cap may not exceed eleven percent. If this alternative is chosen, at least sixty percent of all the hotel-motel tax receipts must be expended for the purpose of promoting tourism, conventions and trade shows.
A county or city government levying the hotel-motel tax must expend the proceeds which have been designated for the promotion of the tourism/travel industry through a contract with a chamber of commerce, conventions and visitors bureau, or similar nonprofit group.
Are there any restrictions on the levY of the hotel-motel tax
Yes. The tax may not be levied on charges for any rooms, lodgings, or accommodations provided for a period of more than ten consecutive days or for use as meeting rooms. Further, State or local government officials or employees are exempted from this tax when traveling on official business.
Also, any local government levying the tax at a rate of six percent is limited to one continuous three-year period. At the end of the three-year period, the tax may not again be levied at a rate of six percent.
What procedures should local governments follow in the administration of this tax?
Other than the maximum tax rates specified above, State law does not prescribe the rate of taxation, manner of tax levy, or method of
38

collecting the hotel-motel tax. Such matters must be determined by each county and each municipality electing to levy this tax.
Does State law regyire that ~ersons re~orting and ~aying the hotel-motel tax be reimbyrsed?
Yes. Hotel-motel operators are allowed a deduction in the amount of three percent of the total tax amount due when the tax is reported and paid in a timely manner.
Where can local governments obtain assistance in establishing and administering the hotel-motel tax?
The legal citation for the hotel-motel tax is a.C.G.A. Sec. 48-13-51. House Bill 563, which was passed in 1987, amended this section of the Georgia Code.
Municipalities should contact the Georgia Municipal Association at (404) 688-0472. Counties should contact the Association County Commissioners of Georgia at (404) 522-5022, or the Georgia Department of Community Affairs, City/County Management Unit, at (404) 656-5537 or (GIST) 221-5537.
The Local Income Tax
Can local governments levy an income tax? Yes. The governing authority of each county or of each municipality
may levy a one percent tax on the Georgia taxable net income or every resident individual, corporation, or fiduciary. Individuals whose gross income is less than $7,500 in any year are exempted from this tax for each such year. Presently. there are no local governments which impose this tax.
39

Are there any statutory limitations on local governments' authority to
levY a local income tax
There are two restrictions. In those counties in which the tax is authorized by county referendum, municipalities within such counties are not authorized to levy the tax. In instances where municipalities are considering levying this tax, only "qualified" municipalities are permitted to do so. A qualified municipality is one which imposes a tax other than the local income tax and which provides at least three of the following services: fire protection; garbage collection; library; police protection; sewerage; or water.
What statutory reQuirements must be met before a county or municipality is authorized to impose a local income tax?
A referendum must be held on the question of levying a local income tax. The tax may be levied only if more than one-half of the electors qualified to vote cast a ballot and only if more than one-half of the votes cast are in favor of the tax. The referendum may be conducted by the county or by the most populous municipality in the county, if the county elects not to hold the referendum. If the municipal governing authority adopts a resolution requesting the county to conduct the referendum, but the county does not do so, then the municipality may conduct the referendum on the question of imposing the tax on the municipality's residents.
If the levy of a county income tax is authorized by referendum. what other statutory reQUirements must the county meet before this tax may be levied?
1. First, the county governing authority must adopt a resolution evidencing intent to levy the tax.
2. Second, a certified copy of the resolution must be forwarded to the State Revenue Commissioner within 10 days of its adoption.
The above requirements do not apply to municipalities levying the tax.
40

HoW is the local income tax administered?
The State Department of Revenue administers and collects the tax for the benefit of the political subdivisions levying or entitled to the proceeds of the tax. The proceeds of the tax are allocated on a ~ ~ population basis to cities and counties levying the tax. The population formula is based on the proportion that the municipal population bears to the total county population, and vice versa with regard to proceeds disbursed to the county.
Does State law restrict the expenditure of the proceeds from the local inCOme tax?
Yes. For the year following the initial year in which it is levied, the governing authority of each county and each municipality must adjust its millage rate for ad valorem taxation so that the aggregate revenue derived from ad valorem taxation does not exceed the total amount received by it from ad valorem taxation for the previous year minus the amount of the net proceeds derived from the local income tax imposed the previous year.
Is a county or municipality authorized to impose a local sales and use tax and a local income tax during the same period of time?
No. State law prohibits the simultaneous levy of both the local sales tax and a local income tax.
Where can local governments obtain additional information and assistance in regard to the local income tax?
O.C.G.A. Sec. 48-7-141 et. seq. contain the text of State law governing this tax.
Specific questions regarding administration of the local income tax should be directed to the Income Tax Division of the State Department of Revenue: (404) 656-4095.
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Motor Vehicle Tag Collection Fees
Are both municipalities and counties authorized to collect motor vehicle tax collection fees?
Only county tax collectors or county tax commissioners, which have been designated as local tax agents, are authorized to collect motor vehicle tag collection fees. However, in certain instances, both municipal and county governments ~ be eligible for a portion of the proceeds from this fee.
How are the proceeds of the motor vehicle taq collection fees distributed?
State law requires that fifty cents (50 cents) per license plate or revalidation decal, up to a maximum of 4,000 license plates or revalidation decals issued during any calendar year, be retained by the tax agent as compensation provided that the tag agent is not a county employee with an annual salary exceeding $7,999. If the tax agent is a county employee with an annual salary exceeding $7,999 then the tag agent's share of the license fees must go into the general treasury of the county.
The county is also entitled to twenty-five cents (25 cents) for each license plate or revalidation decal sold in excess of 4,000 during the calendar year. The remaining proceeds from the motor vehicle tag fee are remitted to the State Department of Revenue.
What else do local qovernments need to know about motor vehicle taq collection fees?
On or before May 1 of each year, all vehicles which were registered in the State during the previous year must be registered for the current year or be subject to a delinquent penalty of 25% of the registration fee.
In order for a tag agent to accept an application fee for the registration of a delinquent vehicle, the application must be endorsed
42

by an authorized official. The endorsing official may be a sheriff, deputy sheriff, chief of police or his designated representative, state highway patrolman, state revenue special agent or enforcement officer, Department of Transportation enforcement officer, tax collector, or tax commissioner.
The endorsing official must indicate the amount of the registration fee along with the 25% penalty and the sum of $1.00. The entire amount must be paid to the tag agent before the issuance of any license plate or revalidation decal.
All delinquent-registration penalties are accredited to the endorsing officer without regard to the residence of the owner of the vehicle. Each month the tag agent must remit to the county or city employing an endorsing officer the full amount of the penalties which were accredited to him. All fees from penalties which were accredited to other authorized officials, such as a state highway patrolman or Department of Transportation enforcement officer, are paid to the fiscal authorities of the county where the vehicle is registered.
Are there any other fees which may be char~ed?
Yes. When a registration certificate is lost, damaged, or stolen and an application for a duplicate certificate is submitted to the same county which issued the current registration certificate, the county tag agent may retain the fifty cents (50 cents) application fee as compensation.
Where can I find additional information?
O.C.G.A. Sec. 40-2-30 et. seq. contain the full text of State law governing this fee. Also, contact the Georgia Department of Revenue, Motor Vehicle Division at (404) 656-4156.
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Special Franchise Tax or Fee
What is a special franchise?
In general, a franchise may be defined as a grant of right by a public authority to an individual or group. It gives an individual permission to do something which he would not otherwise have the right to do.
Special franchises are ordinarily regarded as privileges which are granted to individuals or groups for the right to occupy a portion of the public right-of-way or other public places. For a more specific definition of special franchises, as used in State law, see O.C.G.A. Sec. 48-5-420.
What do local qovernroents need to know about the imposition of taxes and fees on special franchises?
Special franchises are regarded as property which must be returned for ad valorem property taxation. In addition to ad valorem property taxes, franchise fees may be charged for any special rights which are granted for the use of public streets or other public places.
Ad valorem property taxation is discussed in Chapter II of this handbook. Please refer to page 5 for a discussion on special franchise property taxes. This section focuses on fees which may be imposed on special franchises.
Are there any specific types of special franchises which are subject~ local taxation?
All public utilities and cable television systems are subject to assessment. However, there are restrictions in State law on the imposition and collection of franchise fees from these sources. While both municipal and county governments are authorized to collect franchise fees from cable television systems, only municipal governments are authorized to collect public utility franchise fees.
44

noes State law regulate the amounts of fees which can be imposed?
Generally, no. Franchise fees are negotiated between each government and the franchisee. However, county fees which are charged for cable television franchises must not exceed the limits set by federal laws and regulations. State law is silent with regard to negotiated rates between municipalities and franchisees.
What else do municipalities and counties need to know about the imposition of this tax?
No county can grant a franchise or collect a franchise fee from a cable television system operating within the corporate limits of a municipality except by agreement with the municipality. Similarly, no municipality can grant a franchise or collect a franchise fee from a cable television system operating within the unincorporated portion of the county except by agreement with the county.
State law governing the regulation of cable television systems does not apply to franchise agreements which were entered into prior to April 9, 1981, nor does it apply to cable television systems which are owned or operated by city governments, county governments, or school systems.
Where can additional information or assistance be obtained in regard to sQecial franchise taxes?
a.C.G.A. Sec. 36-34-2 contains State law which authorizes municipalities to enter into franchise agreements with public utility companies. a.C.G.A. Sec. 36-18-1 et. seq. contain State law concerning regulation of cable television systems.
Municipalities seeking assistance in imposing and collecting the tax may contact the legal department of the Georgia Municipal Association at (404) 688-0472. Counties should contact the Association County Commissioners of Georgia at (404) 522-5022.
45

V. BUSINESS LICENSES AND TAXES
Business License/Occupation Tax-General Information
Are both municipal and county governments authorized to levY business and occupational license taxes and fees?
Municipal and county governments are authorized to levy and collect business and occupational license taxes and license fees from all persons, firms, and corporations doing business within the incorporated and unincorporated areas of their respective jurisdictions. The basic authority for levying and collecting this tax is found in the 1983 Georgia Constitution which states that in the absence of general law:
(1) County governing authorities may be authorized by local law to levy and collect business and occupational license taxes and license fees only in the unincorporated areas of the counties. The General Assembly may provide that the revenues raised by such tax or fee be spent for the provision of services only in the unincorporated areas of the county; and
(2) Municipal governing authorities may be authorized by local law to levy and collect taxes and fees in the corporate limits of the municipalities.
Prior to the passage of the 1983 Georgia Constitution, many county governments were, and still are, authorized by local legislation to levy and collect occupation taxes. However, in 1986 the General Assembly passed a general law giving county governments the power to impose this tax. Now, county governments have the option of continuing to operate under prior local legislation or they may elect to come under the new general law. See O.C.G.A. Sec. 36-1-21.
In addition to the power to levy and collect business license fees and occupational taxes which are authorized by general laws, municipalities may tax many businesses under the taxing power which is conferred through municipal charters.
46

State laws which authorize the imposition of business license fees and occupational taxes are often interpreted in a variety of ways. In some instances, one local government may charge one type of business for a license fee while a different local government may charge the same type of business a tax.
It is important to make a distinction between licensing and taxation. The courts have developed many guidelines for making this determination. In general, taxation may be viewed primarily as a revenue measure while a license fee is regarded primarily as a regulatory measure under the police power of municipal and county governments.
Since the Georgia courts and the General Assembly have placed a number of limitations on the levying of occupation taxes by municipal and county governments, it is recommended that local government officials consult their attorneys on these matters.
How are business license fees established by municipal and county governments?
There are a variety of rate structures which are used by Georgia's local governments. However, these can be classified into two major categories - fixed charges and variable or sliding charges.
Fixed charges assign a specified set fee for each business classification. Other variables, such as number of employees, are not taken into consideration.
One of the primary advantages of a fixed fee system is that it is the least complex type of business license to design and administer. Furthermore, the system requires less follow-up by the administrative staff.
A fixed fee system, however, has several disadvantages. For example, it usually assigns different amounts to various business classifications. Often, these fees are charged without proper consideration given to why one type of business should pay an amount different from businesses in another classification. Another disadvantage is that tax yields from fixed charges may not increase noticeably in a locality with a growing economy.
47

Variable or sliding charges allow for variation in charges for different businesses within the same classification. Charges may change according to gross receipts (ranging from comprehensive to simplified levies), inventory, number of employees, or number of fixtures or units (e.g., per room).
The major advantage of a variable fee system is that it utilizes some type of criterion (such as profitability or number of employees) to make a distinction between small and large businesses within one classification. Usually, this type of system is more productive in terms of revenue collections because larger businesses pay more under a system based on variable charges than one based on fixed fees.
A major disadvantage of a variable fee system is that the administration of the business license tax tends to be more complicated.

Can municipal and county Qovernments impose a business license tax on anyone doinQ business within their respective jurisdictions?
No. Certain businesses, such as traveling salesmen and companies regulated by the Public Service Commission, are not subject to municipal and county business license taxation. Others, such as real estate brokers, pest control businesses, itinerant workers, plumbers and construction workers, can only be taxed under special provisions. Moreover, there are statutory limitations on the authority of municipalities and counties to tax businesses which are licensed by the State.

What are the specific occupations which may be subject to occupation taxes by counties and municipalities?

The following occupations and professions may be taxed an amount not to exceed $200 per year:

1.Law 2.Medicine 3.0steopathy 4.Chiropractic 5.Podiatry 6.Dentistry

7.Massage and Physiotherapy 8.Public Accounting 9.Embalming 10.Funeral Directing 11.Civil Engineering l2.Mechanical Engineering

48

13.0ptometry 14 Applied Psychology 15 Landscape Architecture 16.Land Surveying

17.Hydraulic Engineering 18.Electrical Engineering 19.Architecture 20.veterinary Medicine

This tax may be levied only at the place of the principal office.

Does State law exempt any of these occupations and professions from this .t..aA?
Yes. No occupation tax may be levied on any practitioner whose office is maintained by and who is employed in practice exclusively by the United States, this State, a Georgia county or municipality, or by instrumentalities of the United States, this State, county, or municipality.

Where can local ~oyernments obtain information and assistance on business occupation fees or taxes?
O.C.G.A. Sec. 48-13-5 contains the text of State law regulating business occupation taxes.
Assistance in designing a business occupation tax schedule may be obtained by contacting the Institute of Government, University of Georgia, Athens: (404) 542-2736. The Institute has also published a reference on this subject, Chan~es in Business Ability to Pay Taxes: 1975-77; University of Georgia, Athens.

The following publications may also be consulted:
1. Georgia Municipal Association. A Study of Municipal Business License Char~es, 1975.
2. University of Georgia, Institute of Government. Geor~ia Counties and the Business License Tax. 1987.
3. Georgia Department of Community Affairs. Municipal Business License Tax Collections: FY 1984 to FY 1985, 1987.

49

4. Georgia Department of Community Affairs, County Business License Tax Collections: FY 1984 to FY 1985
The Financial Institutions License Tax
Does State law authorize cities and counties to levy a license tax on financial institutions?
Yes, both cities and counties are authorized to levy a business license tax on banks and savings and loan associations. This tax was created to replace the bank shares tax.
What is the tax rate, and what is it applied to?
Counties and municipalities are authorized to set a tax rate not to exceed 0.25 percent on gross receipts of each bank and savings and loan institution. O.C.G.A. Sec. 48-6-93 contains a detailed listing of all items which fall within the definition of gross receipts. In addition, a county or municipality may also provide that the minimum tax on any banking institution subject to the tax may be set at no more than $1,000 per year. This minimum levy may allow smaller jurisdictions to generate revenues which might otherwise be negligible if the tax were applied only to gross receipts.
What is unique about this particular tax and the manner in which it may be imposed?
Counties are authorized to levy this tax on ~ financial institutions in both unincorporated areas and incorporated areas. Cities are also authorized to levy the tax within their respective corporate limits. However, no city or county may levy any form of business license tax, fee, franchise, or occupation tax on financial institutions other than this tax.
50

How are the license tax revenues collected and allocated? The financial institution prepares the tax return on a form supplied
by the Revenue Department which identifies gross receipts subject to this tax. The local government then applies its particular tax rate to the gross receipts to calculate the amount of the tax due.
Revenues from this tax are allocated in the following manner. The jurisdiction in which the parent bank is located receives a base amount of 20 percent of the tax proceeds. The remaining 80 percent of the proceeds is distributed by dividing the total number of branch banks into the 80 percent remainder. The allocation to each government jurisdiction is then prorated on the basis of the number of branch banks in each jurisdiction. Thus, if there are 100 branch banks, and 10 of the branch banks are in Smith County, Smith County will receive 80 percent of total gross receipts multiplied by ten percent, or 8 percent.
Are there any actions local governments must take to implement this tax?
Each local government must enact an ordinance or resolution establishing this tax and setting its rate.
Where can additional information and assistance regarding the financial institutions license tax be obtained?
By contacting the following organizations: 1. Georgia Municipal Association: (404) 688-0472 2. Association County Commissioners of Georgia: (404) 522-5022 3. Georgia Department of Community Affairs: (404) 656-5537 4. State Department of Banking and Finance: (404) 393-7330 5. State Department of Revenue: (404) 656-4240
51

Insurance Company License Fees

ArebQth municipalities and cQunties authQrized by State law tQ impQse license fees Qn insurance cQmpanies?
Presently, municipalities are expressly and specifically authQrized by general law tQ cQllect license fees frQm insurance cQmpanies which dQ business within their CQrpQrate limits. CQunties may be authQrized by IQcal law and by the general business license authQrizatiQn in general law, O.C.G.A. Sec. 36-1-21. Municipalities may alsQ cQllect fees frQm independent agencies Qr brQkers, but these fees must be based Qn business characteristics (number Qf emplQyees, fQr example), nQt Qn insurance premiums.

DQes State law specify the amQunt Qf fees which can be impQsed by municipalit ies?

Yes. The fQIIQwing schedule lists annual fees which may be impQsed:

Municipal PQpulatiQn

Fee AmQunt

Under-1,000

$15

1,000-1,999

25

2,000-4,999

40

5,000-9,999

50

10,000-24,999

75

25,000-49,999

100

50,000 and Qver

150

The abQve fee amQunts are maximum rather than fixed amQunts which may nQt be exceeded. Lesser amQunts may be impQsed, Qr nQ fee may be charged at all. AdditiQnal license fees in the same amQunt may be impQsed annually fQr each separate business IQcatiQn maintained by a cQmpany within the same municipality.

Are there any other fees which may be char~ed? Yes. An additiQnal license fee Qf $10 Qr 35 percent Qf the

52

appropriate fee shown above, whichever is greater, may be charged to each insurance company operated by an organization engaged in the business of lending money or transacting sales involving term financing, which takes applications for insurance through a licensed agent of the insurance company. Where can additional information or assistance be obtained in regard to establishing insurance company license fees?
A publication entitled A Study of MuniciQal Business License Charges, Georgia Municipal Association, July, 1975, is a good reference containing guidance for establishing business license fee systems. The Association may also be contacted for assistance in establishing licensing systems of this type.
O.C.G.A. Sec. 33-8-8 contains the text of State law regulating insurance company license fees.
Insurance Premiums Taxes
How does State law regulate insurance Dremiums taxes levied by counties and municiDalities?
State law regulates insurance premiums taxes imposed by counties and municipalities as two separate classes of insurance: life, and all policies other than life. Regulations governing life insurance premiums taxes wil be discussed first.
How does State law regulate life insurance Dremiums taxes?
State law mandates the levy of a county tax on life insurance premiums; in contrast, municipalities are authorized but not required to levy this tax.
53

~city and county tax rates on life insurance premiums the same?
The tax rates may vary. The municipal tax may not exceed one percent of gross direct premiums, whereas the county tax rate is fixed at one percent. The municipal tax rate must be established by the city council, but the county commission need take no official action on setting the tax rate.
What else must cities do to implement this tax?
Cities must file a certified copy of the local ordinance imposing the tax with the State Insurance Commissioner.
How does State law regulate non-life insurance premiums taxation?
Counties and municipalities are both authorized but are not required to levy this tax. It may be imposed, if they wish, by local ordinance or resolution.
The ceiling on the tax rate is the same for counties and municipalities. The rate set by any county or municipality may not exceed 2.5 percent of gross direct premiums.
What must be done to implement the tax on non-life premiums? Each county and city imposing this tax must file a certified copy of
the local ordinance levying the tax and specifying the rate with the State Insurance Commissioner.
How are the proceeds of insurance premiums taxes distributed?
Taxes on insurance premiums are collected by the State Insurance Commissioner and distributed on the basis of population formulas. Please consult O.C.G.A. Sec. 33-8-8 to determine the appropriate formula for each type of tax.
54

Are municipalities and counties reguired by State law to adjust millage ~tes based on revenues collected from insurance premiums taxes?
Municipalities are not restricted. However, counties are required to apply the proceeds for the purpose of reducing ad valorem property taxes of persons residing in the unincorporated county.
Nhere can cities and counties obtain additional information and ~ssistance regarding insurance premiums taxes?
O.C.G.A. Sec. 33-8-8 contains the text of State law regulating these taxes.
Questions concerning the imposition and administration of the tax should be directed to the Office of Comptroller General, Insurance Department, (404) 656-2056.
The Association County Commissioners of Georgia and the Georgia Municipal Association may be contacted to obtain copies of a model resolution and a model ordinance pertaining to insurance premium taxation.

Licensing the Manufacture, Distribution, and Sale of Malt Beverages

Does State law authorize local governments to impose license fees on brewers, wholesalers, and retailers of malt beverages?

Yes. State distribute, or

law sel

manda l malt

tes that a beverages

pplic at r

ants etai

l

for pa

a y

license an annual

t

olibcreenws~

fee

to the municipality or county in which the business will be maintained.

The fee amount may be set by the governing authority.

Does State law set forth other reguirements which must be met by ~ties and municipalities before malt beverage licenses may be issued?
There is no statutory requirement for a local voter referendum on the

55

question of issuance of malt beverage licenses and imposition of fees. However, the manufacture, distribution, and retail sale of malt beverages must be licensed by the local governing authority in accordance with local laws. Municipalities may grant licenses only within their corporate boundaries; counties may grant licenses only within the unincorporated areas of the county.
Does State law contain any special regulations governing malt beverage license fees charged by counties and municipalities?
Yes. In instances where a wholesale dealer has its principal place of business in and is licensed to do business in one municipality or county of this State, but delivers in other municipalities and counties, no municipality or county other than the municipality or county in which the principal place of business is located may charge the wholesaler a license fee which exceeds $100. Assessment of a local license fee on beer wholesalers is contingent upon the method in which the wholesaler conducts his business.
What happens when a malt beverage license is revoked?
When any county or municipal license is revoked by the local governing authority, any malt beverage license issued to the same person by the State automatically becomes invalid in the county or municipality in which the license was revoked. Similarly, when a State license is revoked, a local license issued to the same person is invalidated.
Where can additional information and assistance regarding licensing of malt beverages be obtained?
By contacting a field office of the Georgia Department of Revenue located in Albany, Atlanta, Athens, Augusta, Columbus, Douglas, Macon, Rome and Savannah.
O.C.G.A Sec. 3-5-41 contains the text of State law regulating malt beverage licenses.
56

Licensing the Manufacture, Distribution, and Retail Sale of Wine
Is the manufacture, distribution, and retail sale of wine permitted without a license?
No, the business of manufacturing, distributing, and selling wine at wholesale or retail may not be conducted in any county or municipality without a license issued by the governing authority.
Are there any statutory requirements which must be met by counties or municipalities prior to licensing the manufacture, distribution, and retail sale of wine?
State law does not require a local referendum on the question of the issuance of such licenses. However, since State law does require that the busineses be licensed, local governments contemplating the issue of licenses must establish local authority by ordinance or other appropriate method for the issue and regulation of licenses. In addition, State law is silent as to authorization or amount of local wine license fees. Therefore, local governments contemplating the imposition of license fees must establish local regulations setting forth fee amounts and method of collection.
What happens when a local wine license is revoked?
When a local wine license is revoked, a State license issued to the same person is automatically revoked. Similarly, the revocation of a State license by the State requires automatic revocation of a local license issued to the same person.
Where can additional information or assistance concerning licensing the retail sale of wine be obtained?
By contacting the field office of the Georgia Department of Revenue in your service area.
57

D.C.G.A. Sec. 3-6-40 contains the text of State law regulating this license.
Licensing the Manufacture, Distribution, and Retail Sale of Packaged Distilled Spirits
Does State law authorize local governments to impose license fees on distillers. wholesalers. and retailers of distilled spirits?
Yes. Counties and municipalities may charge a fee not to exceed $5,000 on each distiller, wholesaler, and retailer of distilled spirits. The fee is discretionary rather than mandatory.
What re~uirements must be met before the fee may be imposed?
The manufacture, distribution, and sale of distilled spirits must be authorized by local referendum before licenses may be issued and fees may be charged. State law requires that a petition signed by at least 35 pecent of the registered voters of a county or municipality be filed with the appropriate election superintendent, who calls for a referendum to be held within 30 days from the date the petition is filed. Authorization for the issuance of licenses requires a favorable vote by the majority of votes cast.
Any municipality within a county which has approved a county-wide referendum is not required to hold a separate referendum if a majority of the qualified voters who reside in the municipality voted in favor of approving the sale of distilled spirits.
If a majority of those persons voting vote against the sale of distilled spirits, another referendum on this question may not be held for two years.
58

HQw does State law govern local regulation of distillers, wholesalers, and retailers of distilled spirits?
State law is permissive in this regard, Municipalities or counties are permitted by State law to adopt all reasonable rules and regulations which may fall within their police powers to regulate these businesses. Local laws may therefore specify the license fee amount and method of collection, in addition to other requirements or regulations governing such things as business location and license applications.
Where can additional infOrmation or assistance be obtained with regard to regulation of alcoholic beverages of all types?
By contacting a field office of the Georgia Department of Revenue located in Albany, Atlanta, Athens, Augusta, Columbus, Douglas, Macon, Rome, or Savannah,
O.C,G,A. Sec. 3-4-40 et, seq. and O.C.G,A. Sec. 3-4-160 contain the text of State law regulating the licensing of sales of distilled spirits.
Licensing the Sale of Distilled Spirits by the Drink
Does State law re~uire local governments to license the sale of distilled spirits by the drink?
Yes. Each county or municipality may authorize through proper resolution or ordinance the issuance of licenses to sell distilled spirits by the drink for consumption on the premises where sold. State law, however, is silent with regard to imposition of license fees or fee amounts which may be charged.
59

What must local governments do before pouring licenses may be issued?
The governing authority must conduct a referendum on the question of permitting the sale of mixed drinks. The governing authority may proceed to issue pouring licenses in the event that a majority of those persons voting vote in favor of issuing licenses for the sale of mixed drinks.
In jurisdictions which have authorized the sale of packaged liquor, c referendum on the question of sale of distilled spirits by the drink must be conducted if requested in a petition signed by 15 percent of eligible voters. For those localities which have not authorized the sale of packaged liquor, a referendum must be held if requested in a petition signed by 35 percent of the qualified voters.
Any municipality within a county which has approved a county-wide referendum is not required to hold a separate referendum if a majority of the qualified voters who reside in the municipality voted in favor of approving the sale of distilled spirits by the drink.
If a majority of those persons voting vote against the sale of distilled spirits by the drink, another referendum on this question may not be held for two years.
What authority is given by State law to local governments for the purpose of regulating the conduct of licensees and their businesses?
The governing authority of every county and municipality authorized to license the sale of distilled spirits by the drink has the power to adopt and enforce all reasonable regulations governing qualfications for the issuance of pouring licenses. Local governments have the additional power to establish rules and regulations governing the conduct of any licensee, such as hours of business, employee background, and other matters falling within the police powers of local governments.
Where can additional information or assistance be obtained with regard to the licensing of retail sales of mixed drinks
By contacting the field office of the Georgia Department of Revenue in your service area, the Georgia Municipal Association, or the
60

Association County Commissioners of Georgia. O.C.G.A. Sec. 3-4-90 et. seq. contain the text of State law governing
pouring licenses.
Airport Fees and Licenses
Does State law authorize local ~overnments to levy fees for the use of airport facilities?
Yes. Counties, municipalities, airport authorities and districts, and other political subdivisions which own or operate an airport may levy and collect reasonable rental charges, landing fees, license fees, and service charges for the use of airport facilities from aircraft owners and operators and from persons selling or providing goods or services to the owners or operators or to the public.
Does State law prescribe fee amounts or specific methods of re~ulatin~ airport users?
NO. Fee amounts, licensing, and other regulatory matters must be determined by the local governing authority or airport authority. However, State law prohibits the levy of any tax or fee on persons traveling in air commerce regardless of type of carrier or on the sale of air transportation or gross receipts derived from air transportation.
Where can additional information or assistance concernin~ this revenue source be obtained?
O.C.G.A. Sec. 48-13-4 contains the text of State law governing airport fees and licenses.
For assistance in establishing fee schedules, please contact your respective Area Planning and Development Commission, or the Institute of Government, University of Georgia.
61

Licensing and Regulating Itinerant Shows
DoeS State law authorize both counties and municiQalities to re~ulate and license itinerant shows?
State law presently authorizes only counties to regulate itinerant shows such as carnivals, circuses, tent shows, or similar itinerant entertainment held outside the corproate limits of a municipality. The general law provisions are silent with regard to municipalities, so such shows are normally regulated by ordinance based upon general regulatory authorization contained in the municipal charter.
Are counties authorized by State law to impose a license fee 00 such shows?
A license fee not to exceed $1,000 per year on each show may be charged.
Does State law Qrescribe how itinerant shows may be re~ulated by counties?
State law granting this authorization is permissive, stating that the county governing authority may by order or resolution regulate and impose a license fee on itinerant shows. The governing authority is left with the responsibility of defining the content of local regulations.
O.C.G.A. Sec. 48-13-9 contains the text of State law governing the licensing of itinerant shows.
62

APPENDICES
Appendix A Local Government Revenue Sources
(Comprehensive Listing)
Revenue sources which are listed include:
1. sources reported by local governments in response to the annual survey of local government finances conducted by the Georgia Department of Community Affairs;
2. sources authorized by state law; and
3. sources described in references for County and Municipal elected
officials.
Property Taxes
Real and Personal Property Taxes FIFA, Penalties, Tax Executions, Interest and Cost Public Utilities Taxes Motor Vehicle Taxes Intangible Taxes (regular and recording) Railroad Equipment Tax Tax Collection Fees Mobile Home Taxes
Sales. Use and Income Taxes
Local Option Sales Tax Special Purpose Local Option Sales Tax Hotel-Motel Tax Local Income Tax
63

Motor Vehicle Tag Collection Fees Special Franchise Tax MARTA Tax (DeKalb and Fulton Counties> Dedicated Sales Tax
Alcoholic Beverage Taxes
Local Excise Tax on Malt Beverages Local Excise Tax on Wine Local Excise Tax on Package Sale of Distilled Spirits Local Excise Tax on Sale of Distilled Spirits by the Drink
Business Licenses and Taxes
Business License/Occupation Taxes Financial Institutions License Tax Insurance Company License Fee Insurance Premium Taxes Licensing the Manufacture, Distribution, and Retail Sale of Malt
Beverages Licensing the Manufacture, Distribution, and Retail Sale of Packaged
Distilled Spirits Licensing the Sale of Distilled Spirits by the Drink Airport Fees and Licenses Itinerant Show License Fees
Service Charges/Fees
Parking Facilities and Meters Parks and Recreation Charges Ambulance Charges Hospital Charges Garbage and Trash Collection Charges Landfill Fees Special Assessments Fire Service Subscription Fees Cemetery Fees
* Fee Collections of County Officers
Building Permit Fees
64

Water and Sewage Disposal Charges Swimming Fees Golf Course Fees Libraries Fines, Forfeits and Court Fees
Intergoyernmental Reyenues by Type
Payments in lieu of Taxes General Public Purpose Grants Road, Street and Bridge Funds **Capital Outlay Grants * Fuel, Oil and Road Mileage * Revenue of County Boards of Health Water/Wastewater Grants Solid Waste Grants Crime and Corrections Grants Community Development Block Grants Public Welfare Grants Real Estate Transfer Tax * General Revenue Sharing * State Physical and Mental Health Grants
Intergovernmental Revenues, by Source
State Other local Federal
Use of Money and Property
Revenues Interest on Investments Fines, fees, and forfeitures Receipts from sale of materials and surplus equipment Receipts from sale of real property Rents and royalties
65

Utility Reyenues
By Purpose Water and sewer system Electric supply system Gas supply system Airport Public transit
By Type of Revenue Operating revenue Other revenue
Sources of Short-term and long-term funds <pebt)
Revenue Bond Debt Issued
By Purpose Water/sewer Gas utility system Electric utility system Industrial revenue bonds Public transit system Airport Parks and recreation facilities Multi-purpose All other Promissory Note Short-term Debt Issued
General Obligation Bond (Debt) Issued
By Purpose: Water/sewer Education (general government) Law enforcement and corrections Jails Fire Protection Public buildings Highways, streets and drainage
66

Parks and recreation facilities Multi-purpose All other Cash and Investment Assets: By Type Cash and deposits Federal securities Federal agency securities State and local government securities Other securities State managed local government Investment Pool
* Counties only ** Municipalities only.
67

1\9pendix B
Local Government Revenue Source and References to Georgia Code Annotated

Revenue Source'

I.

Property taxes

Real and Personal Property Tax

Interest on Delinquent Taxes Penalty on Failure to File Return Tax Execution Public Utilities Motor Vehicles Mobile Homes Intangible Property Intangible Recording Tax Collection Fees Real Estate Transfer Tax

II.

Alcoholic Beyerage Taxes

Distilled Spirits

Malt Beverages

Georgia Code Reference
48-5-220 (county) 48-5-350 (city) 48-2-40 48-2-44; 48-5-299 48-3-1 48-5-511 48-5-473 48-5-494 48-6-20 48-6-60 48-5-180 48-6-1
3-4-80 3-5-80

68

Wine Distilled Spirits by the Drink

III.

Other Taxes Local Option Sales Tax Special Purpose Local Option Sales Tax Hotel-Motel Tax Local Income Tax Motor Vehicle Licenses Special Franchise Tax

IV.

Business Licenses and Taxes

Tax on Financial Institutions

Life Insurance Companies

Insurance Premiums Tax

Businesses Selling Alcoholic Beverages

a. Distilled Spirits b. Malt Beverages c. Wine d. Mixed Drinks

Business Occupation Taxes

Business and Occupational Taxes and Fees for Counties

3-6-60 3-4-130; 3-4-131
48-8-82 48-8-110 - 48-8-121 48-13-51 48-7-141 40-2-30 48-5-420; 36-34-2; 36-18-1
48-6-93 33-8-8 33-8-8; 33-8-8.1
3-4-50 3-5-41 3-6-40 3-4-90 48-13-5
36-1-21

69

Itinerant Shows Airport Fees

48-13-9 48-13-4

70

Appendix C
Telephone Directory of Information Sources

Agency
Association County Commissioners of Georgia
Comptroller General, State of State
Insurance Department
Georgia Department of Community Affairs
Technical Assistance Division Government Information Division
Georgia Department of Revenue
Commissioner Field Services Division Income Tax Division Motor Vehicle Division Property Tax Division Sales and Use Tax Division
Georgia General Assembly
Clerk of the House Senate Research Office
Georgia Municipal Association

Number (404) 522-5022

(404) 656-2100

(404) 656-5537 (404) 656-5526

(404) (404) (404) (404) (404) (404)

656-4015 656-2363 656-4095 656-4119 656-4240 656-4060

(404) 656-5015 (404) 656-6896
(404) 688-0472

71

ARpendix D
Reports on Local Government Finances
Annually, the Georgia Department of Community Affairs prepares several reports on local government finances. The reports, based on data collected through a comprehensive survey of every county and city government in the state, are undertaken to meet the requirements of the Local Government Financial Management Standards Act (Act 1405, Georgia Laws 1980, as amended) .
o Geor~ia Local Goyernment Finances: An Overview is required by state law, and is designed to give state lawmakers a status report and the "big picture" about city and county government finances. This report describes revenue and expenditure patterns for city and for county governments and highlights important differences between the cities and counties. Limited copies of Local Government Finances: An Overview are available for 1983, 1984, 1985 and 1986.
o Geor~ia Local Goyernment Finances: Fiscal Plannin~ Guides contain data with which local governments can compare their financial picture revenues, expendituers, debts, investments - with other municipalities or counties. The data are organized to allow comparisons between counties or municipalities of similar size. There is a county version and a municipal version of the report. Copies are available for 1985-86 and 1986-87.
For copies of these reports, please contact:
Lynn Thornton, Assistant Commissioner Georgia Department of Community Affairs 40 Marietta Street, N.W., #800 Atlanta, Georgia 30303
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Bibliography
Advisory Commission on Intergovernmental Relations. Local Revenue Diversification: Income, Sales Taxes, and User Charges. Washington, D.C.: 1974.
Council of State Governments. The Property Tax: A Primer. Lexington, Kentucky: 1978.
Georgia Code Revision Commission. Official Code of Georgia, Annotated (1982 and 1986 Cumulative Supplement) .
Georgia Department of Community Affairs. Georgia Local Government Finance: An Overview (1983, 1984, 1985, 1986).
Georgia Department of Community Affairs. Georgia Local Government Finances: Fiscal Planning Guide (1985-1986, 1986-1987).
Georgia Department of Community Affairs. Municipal Business License Tax Collections: FX 1984 to FX 1985. Atlanta: 1987.
Georgia Department of Community Affairs. County Business License Tax Collections: FX 1984 to FX 1985. Atlanta: 1987.
Georgia Department of Revenue. A Tax Guide for Georgia Citizens (1985).
Georgia Department of Revenue. Statistical Report for 1986 (1986). Note: This report is published annually.
Georgia General Assembly. Handbook of Government Finance in Georgia (1979).
Georgia Municipal Association. A Study of Municipal Buysiness License Charges. Atlanta: 1975.
Georgia Municipal Association. Georgia Municipalities' Revenue Base and Service Requirements. Atlanta: 1968.
Georgia Municipal Association. Municipal Revenues and Expenditures' The ~. Atlanta: 1972.
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Georgia Municipal Association. Negotiating the Distribution of Local Option Sales Tax Revenues. Atlanta: 1979. U.S. Department of Housing and Urban Development. Multi-year Revenue and Expenditure Forecasting. Washington, D.C.: 1980. University of Georgia. College of Business Administration. 1980 Georgia Statistical Abstract. Athens: 1981. University of Georgia. Institute of Community and Area Development ~ and Charges for Recreation Departments by James R. Waters. Athens: 1982.
University of Georgia. Institute of Government - Taxing and Licensing Businesses, Athens, 1975. University of Georgia. Institute of Government. Changes in Businesses' Ability to Pay Taxes: 1975-1977. Athens: 1978. University of Georgia. Institute of Government. Handbook for Collecting Delinquent Property Taxes. Athens: 1979. University of Georgia. Institute of Government. Maximizing Revenue: Minimizing Expenditures. Athens: 1981. University of Georgia. Institute of Government. Georgia Counties and the Business License Tax. Athens: 1987. University of Georgia. Institute of Government. Internal Control Checklist: Optimizing the Flow and Control of Revenues and Expenditures. Athens: 1978.
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Evaluating this Handbook
(Comments and Suggestions)
The Georgia Department of Community Affairs welcomes suggestions for improving this Handbook. If you have any coments about or recommendations for improving the organization or content of the Handbook, please contact the Government Information Division of the Department at (404) 656-5526, or write to the following address: 40 Marietta Street, N.W., Suite 800, Atlanta, Georgia 30303. You may use one or more of the following questions as a guide in preparing comments.
1. Are there additional sources of local government revenues (excluding non-local sources such as revenue sharing) which should be added to the Handbook?

2. Is there any part of this Handbook which needs clarification?

3 Can the Department of Community Affairs provide specific revenue

data for my city/county? Population

~

Type of Revenue Source:
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DCA
40 Marietta Street N. W. Suite 800 Atlanta, Georgia 30303 (404) 656-3836