Cherokee Commission Supports Reduced Sales Tax Collection

The Cherokee County Commission has endorsed a proposal to allow counties to ask voters to approve a fraction of a percent in its Special Purpose Local Option Sales Tax programs.

The commission on Tuesday unanimously approved a resolution in support of a bill that's pending in the Georgia General Assembly that would allow counties to impose its SPLOST at less than one percent. 

The change only applies to county SPLOST programs, not education SPLOST programs used by local boards of education. 

Commission Chair Buzz Ahrens said the change provides "flexibility" for local governments as the legislation, if signed by the assembly and signed into law by Gov. Nathan Deal, would give the choice of choosing capital programs that don't need the full penny for funding.

For example, if the county needed projects over a six-year period that totaled $120 million, and the county's annual collections at $30 million per year, would bring in $180 million.

Instead of trying to use up the excess, the county could set the collection rate at less than the one percent.

The Cobb County Commission recently passed a similar resolution in support. 

Along with more flexibility for SPLOST collections, Ahrens added he expects to see legislation introduced that could possibly allow a portion of SPLOST proceeds to be used for maintenance, but not operations.

He also said there could be a move to clean up ballot language voters see when they consider imposing a Homestead Option Sales Tax.

In other business, commissioners approved joining a class action that would recover unpaid transfer taxes based in foreclosures by Fannie Mae, Freddie Mac and the Federal Housing Administration.

Cobb, Fulton and Gwinnett counties have all joined the lawsuit, County Attorney Angela Davis said.  

"This type of case is springing up all over the country right now, I think, in large part due to the increased number of foreclosures in recent years," she said, adding these agencies claiming exemptions are "not holding water under applicable laws." 

The group of lawyers working on the case would be paid on a contingency fee basis and are working to obtain a percentage of the recovery.

If no funds are recovered, then the attorneys would not get paid. If funds are recovered, then the attorneys would get 25 percent if the case is settled early or 33 percent if it's settled later or upon a trial verdict.  

Commissioner Harry Johnston, who said there's "no downside to us" by joining the class action, added the three federal agencies are "refusing" to pay local transfer tax fees which are charged when a deed to real property is executed or changes hand. 

Ahrens added the county "won't be holding our breath" when it comes to Cherokee collecting any money from the class action.