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| A Guide to Local Option Sales Tax (LOST) & Current Distributions |
The Local Option Sales Tax (LOST) law requires counties and “qualified cities” receiving general purpose LOST revenue to renegotiate distribution agreements within two years of each decennial census. As such, “qualified cities” and counties must begin renegotiation of their distribution agreements on or before July 1, 2012. ACCG has worked with a task force of county managers and finance officers to prepare this guidebook to assist county officials with the process for renegotiating the LOST distribution certificates. One objective of this guide is to outline a framework or process by which county officials can approach the renegotiation with a realistic aspiration to find common ground with its cities without needing to resort to “baseball arbitration” in the court system. The eight criteria required to be considered under O.C.G.A. § 48-8-89 are outlined starting on page 10. Each criterion is discussed and methods for quantifying the criteria are suggested. A copy of the law governing the implementation and distribution of the LOST is provided in Appendix A. Appendix B is a copy of a blank distribution certificate, Appendix C is a sample letter for commencing renegotiations, and Appendix D contains a list of formulas that can be used to create a new distribution. The negotiations will be complicated by the fact that no one distribution formula will result in a sales tax distribution that achieves maximum equity for all county residents paying the sales tax. The debate will focus on the fairness of the LOST revenue distribution, but no objective standard exists to determine that one distribution formula is inherently superior. This guide is intended to assist in framing the issues to be confronted in the negotiations and reducing the tension that the negotiations may evoke. Local government officials should work diligently and with a spirit of cooperation to reach a compromise on a new distribution agreement that is equitable for all taxpaying citizens of the community. | |
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