Once every 10 years, officials with the City of Gray and Jones County must come together to negotiate the division of a one-cent tax that has the purpose of rolling back the millage rate for cities and counties and reducing property taxes.
Local Option Sales Tax (LOST) is a 1 percent sales tax that was authorized by the General Assembly in 1975 and was activated in counties by a local referendum. The tax is imposed on the purchase, sale, rental, storage, use or consumption of tangible personal property and related services.
The amount of LOST funds collected in each city and county for the previous year is used to roll back its millage rate and directly lower property tax bills.
The tax is shared by cities and counties, and negotiation of the tax is a zero-sum game, meaning one jurisdiction’s gain corresponds directly to a loss of revenue by the other.
The most recent negotiation between Gray and Jones County took place in 2012. The city currently receives 19 percent of the LOST funds collected in Jones County. The renegotiation of the sales tax is triggered by the U.S. Census.
The road to that outcome was not an easy one. Once the negations between the entities begin, they have 60 days to come to an agreement. The first meeting in 2012 between the Jones County Board of Commissioners and Gray Mayor and Council members was held July 25, 2012, and it was not promising. The elected officials were more than 20 percentage points away with the commissioners wanting to keep the city’s split at 15.5 percent and the council members wanting 40 percent.
By the end of that meeting, however, it was agreed to let a smaller representative group meet to come up with an agreement that would bring the entities closer together.
That smaller group did come up with a compromise that both governments found acceptable. The compromise was phased-in increases that would start at the city’s rate at the time of 15.5 percent and go up a half of a percent a year until it reached 19 percent.
Jones County started the 2022 negotiations with a letter sent to the Georgia Department of Revenue and the City of Gray June 26. A meeting between the governments has not yet been scheduled, but Jones County Administrator Jason Rizner said he plans to work on that this week.
According to information found on ACCG.org, there is more pressure this year for cities and counties to come to an agreement during the 60-day window. The 2022 negotiations will not have an alternative to baseball arbitration, so the tax will terminate if a voluntary agreement cannot be reached.
