Don’t get lost in the LOSTs; new sales tax could mean reductions in tax bills

ALBANY — The city of Albany and Dougherty County have a taxing issue on their hands, namely discussion of a new sales tax that would be earmarked toward property tax relief.

Meanwhile, taxpayers in the county can expect a belated present the day after Christmas when tax bills, normally mailed in November, hit the post office with a day or more to arrive in residents’ mailboxes.

Both the city and county granted to opt in on House Bill 581, legislation passed last year and approved by a referendum, to enact a floating tax exemption on taxpayers, while the Dougherty County School Board declined to do so.

The legislation created a homestead exemption that limits the annual increase of qualifying properties to the rate of inflation. To offset the potential loss in property taxes, the state allows governments to institute a floating special-purpose local-option sales tax (F-SPLOST).

Dougherty County taxpayers could use the relief, as the millage rate, which determines the amount of their tax bills, is the highest in the state for residents in unincorporated portions of the county, according to Phil Sutton, program manager for Rochester & Associates, a consulting firm located in Gainesville.

Under the legislation, local governments can ask voters to approve a 1-cent sales tax dedicated to providing relief on property taxes.

The city of Albany currently is examining the need for a conference center that would be funded by up to a half-penny sales tax measure. Since the state limits the total sales levy in a county to 9%, that would leave half a penny for property tax relief.

Dougherty County Commissioners approved a measure earlier this year to examine the feasibility of a conference center in the city.

For taxpayers, the tax reduction with a full penny in FLOST relief for $150,000 in property would mean a cut in the tax rate by 33%, or from $1,695 to $1,132 in unincorporated areas and from $1,784 to $1,192 for Albany residents, according to information provided by Sutton.

With a half-cent dedicated to property tax relief, the tax savings would be about $290 for both city residents and residents in unincorporated Dougherty County.

The city and county are looking to have discussions on hashing out the various issues.

One positive County Commissioner Russell Gray said he sees in providing tax relief is that it could reduce spikes in rent. It could also spur interest in housing.

“I think overall we can look at this (as a way) to manage the affordability of our homes and stimulate interest in rental property and single-family homes,” he said.

While renters do not write a check to the tax office, they pay that cost through rent, Sutton said.

“In theory, this keeps rent (lower),” he said.

Another attractive feature of the FLOST is that out-of-town visitors would be footing the reduction in property taxes.

“It’s really a 40% benefit, because 40% of your sales tax comes from out of the community, while property owners pay 100% of property taxes,” Sutton said.

The City Commission has not made any decision on whether to pursue a conference center, Albany City Manager Terrell Jacobs said. Currently the city is researching whether there is a need for such a facility.

The city and county likely will discuss their shared service delivery strategy to ensure that services are being provided in the most efficient manner, he said.

If the city and county can agree on divvying up the penny by the week of Feb. 2, the issue could be on a May 19 ballot that coincides with statewide qualifying elections. 

“My experience with the special tax is they’re more likely to pass with the primary,” Sutton said. “Presidential elections, you’re taking a risk. governor elections, you’re taking a little risk.”

Voters in several counties have shot down the FLOST in elections held in 2024, he said.

“FLOST is a property tax reduction for all businesses, agriculture, non-homestead exempted,” he said. “It doesn’t matter, they all get a tax reduction.”

The mailing of tax bills has been delayed by implementation of the tax-relief legislation and also a mixup with advertising, Dougherty County Tax Director Shonna Josey said.

Plans are to have bills mailed out by Dec. 26. 

Taxpayers looking to lock in the federal tax deduction on local taxes could still pay online to beat the Jan. 1 deadline, she said.

The tax office is also looking at having extended hours in the days prior to New Year’s Day to allow taxpayers time after work to make payments.