By Maggie Lee
The DeKalb County Finance Department is asking the county commission to nearly double business occupancy tax rates – and to close a loophole that exempts liquor stores.
If passed, it should raise about $4 million in revenue, and it’s facing fairly little opposition.
DeKalb County businesses must pay an annual occupancy tax on their gross revenue within Georgia of more than $20,000. Depending on the type of business, that comes to 18 cents to 78 cents on each $1,000 in gross revenue.
Next year, that could go up to 30 cents to $1.30 for each $1,000 in gross revenue.
“We believe these rates will be more in keeping with the surrounding areas,” Joel Gottlieb, interim finance director told county commissioners at a Nov. 16 meeting.
According to one of Gottlieb’s sample calculations, a typical chain grocery store in DeKalb County now pays about $10,000 a year in occupancy tax. Under the new system, the same store would pay about $17,000. Among nearby counties, Cobb is the lowest for a grocery store – about $10,000. Atlanta levies nearly $26,000 for the same-sized grocery.
Meanwhile, a new car dealer would pay about $10,000 under the new system, lower than any nearby counties, including Cobb. DeKalb would be the cheapest too – less than $6,000 – for a gas station.
Under either rate, the business occupancy tax is capped at $50,000 annually.
The DeKalb County Commission is scheduled to hold a public hearing on Dec. 14 on a plan to nearly double the business occupancy tax in unincorporated DeKalb County. If passed, the new rate is scheduled to take effect Jan. 1.
Because businesses are classified and taxed slightly differently across the Atlanta metro area, DeKalb might not be the lowest for every kind of business owner, but DeKalb County Commissioner Kathie Gannon, at-large representative for much of north and west DeKalb, thinks the calculation – and the fee hike – is competitive.
“The fact is, we are so low that increasing this fee will not make us business unfriendly,” she said.
The rates haven’t been touched since 2000, she notes.
Brookhaven’s representative on the commission was a bit skeptical.
“I’m going to oppose this unless I see business has a say in it and there is a plan to use this to rejuvenate businesses here in DeKalb,” Elaine Boyer said. “At this particular time, the tax is just a fee … Businesses get zero for it … We need to make sure that businesses get an offset for perhaps water. There are different ideas that have come out.”
Overall, Boyer said there hasn’t been a thorough enough discussion on the issue and has scheduled a meeting with county staff to get more data.
The DeKalb County Chamber of Commerce also is meeting with Gottleib to get some more details about the tax and its exemptions and limits before it votes on a position, said Leonardo McClarty, chamber president.
“We understand that the county, like so many governments, is financially strapped going into next year,” McClarty said, “but there has to be a balance between revenue increase and the cost of doing business.”
Some business leaders already have stamped approval on the plan.
The proposal has received a nod from the county Revenue Enhancement Commission, a group formed this July that’s supposed to hunt for ways to bring in more money. The commission is stacked with business leaders in the community and it’s led by a former Southern Company chairman and chief executive.
The revenue commission plans to add liquor stores to the occupation tax. Right now, such stores pay nothing, a legacy left over from a time when the state regulated package stores.
DeKalb’s general revenue for 2010 is estimated to total $565 million. Next year’s budget is short about $55 million, due to falling revenues tied to property prices, plus estimated obligations for pensions and insurance.
The hike would not apply to the City of Dunwoody; it sets its own rates, which now are identical to DeKalb County’s.
If passed, the new rate would take effect Jan. 1, 2011.