SALT Report 3099 – On October 7, 2013, the Georgia Supreme Court issued an opinion in the matter of Turner County v. City of Ashburn. In the opinion, the Court held that certain portions of Georgia’s Local Option Sales Tax Act (LOST) were unconstitutional because they violate the separation of powers doctrine.
The LOST Act is the Georgia Legislature’s attempt to simplify the way counties and municipalities divide the 1% local option sales tax. At issue in this case, is a 2010 law that required counties and their municipalities to use nine loosely defined criteria, such as total population, to determine how to split the LOST money. If a county and municipality failed to reach an amicable agreement by a certain date, they were required to enter mediation.
However, the Supreme Court found that the Superior Court’s review of these cases following unsuccessful arbitration would allow a county or municipality to obtain a court order forcing the other party to renew a LOST tax levy, even if the elected representatives in a particular city or municipality determined that the tax should expire.
Therefore, under O.C.G.A. §48-8-89(d)(4) the Supreme Court ruled that the authority to levy a tax, renew it, or allow it to expire is exclusively the legislative function of a state or local government. As a result, the Court declared that portion of the LOST statute void and unconstitutional.
The Supreme Court’s decision will not be final until the 10-day period during which each party can file a Motion for Reconsideration, and any additional time that the Court takes to decide a Motion has passed. Therefore, the Department of Revenue is reviewing the Court’s decision, in the event the Court amends all or part of the decision. In the meantime, the Department will continue to handle all local option sales and use tax collections and distributions.
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