Habersham outlines proposed property tax relief sales tax

CLARKESVILLE, Ga. — Habersham County Manager Tim Sims laid out the projected financial impact of a proposed one-cent sales tax Monday, telling county commissioners the tax could reduce county and participating municipal property tax millage rates by an estimated 3.608 mills.

The Property Tax Relief Local Option Sales Tax, or PTRLOST, will go before Habersham County voters in a Nov. 3 referendum. If approved, the additional 1% sales tax would increase the county’s total sales tax rate from 7% to 8% and collections would begin Jan. 1, 2027. The tax would remain in effect for five years.

Sims presented the latest projections during the Sept. 21 Habersham County Board of Commissioners meeting, explaining how the proposed tax would work and how much property owners could potentially save.

Tax dedicated to property tax reduction

Sims emphasized that PTRLOST revenue could not be used for general government operations, capital projects or other county expenses.

Under state law, the money must be used to reduce the property tax millage rates of Habersham County and participating municipalities. The county’s official information also states that the tax would not replace existing SPLOST programs or the school system’s separate sales taxes.

Habersham’s consultant projects the tax could generate approximately $62.2 million over five years. The initial model estimates about $10.62 million in annual revenue, which would be distributed among the county and participating municipalities according to the intergovernmental agreement and tax digest calculations.

The county’s projected share is approximately $7.81 million annually.

Sims said the proposed tax is intended to broaden the pool of people contributing to local government revenue because anyone making a taxable purchase in Habersham County would pay the additional penny, including visitors and people who live outside the county. The county’s presentation estimates that roughly 35% to 40% of sales tax currently comes from people who live outside Habersham County.

$505 example for county property taxes

Sims used a $350,000 home as an example to explain the potential savings.

At the state’s 40% assessment ratio, a $350,000 property would have an assessed value of $140,000. Applying the projected 3.608-mill reduction would result in approximately $505 in annual savings on the county portion of the property tax bill.

The county’s official PTRLOST information gives the same example and calculates the projected savings at $505.12.

Property located within one of the participating municipalities could receive an additional reduction on the municipal portion of the property tax bill. Using the same example, the county estimates approximately $505 in county savings plus approximately $505 in municipal savings, or about $1,010 combined.

Actual savings would vary depending on a property’s taxable value, exemptions, future millage rates and the amount of PTRLOST revenue collected.

The reduction would not be limited to homeowners. The county says the lower millage rates could also benefit taxable rental, commercial, industrial, agricultural and other real and personal property.

First full benefit would come in 2028

Sims explained that a change in state law means taxpayers should not expect the full projected reduction immediately after collections begin.

If voters approve the tax, collections will begin Jan. 1, 2027. The county’s current explanation says calendar year 2027 will be the first full year of collections, with those revenues applied during the 2028 property tax millage-setting process. As a result, 2028 would be the first property tax year in which taxpayers would receive the full projected millage reduction.

Sims said the county and participating municipalities would maintain the revenue in separate interest-bearing accounts. Interest earned on the funds would also be applied toward property tax relief.

If a jurisdiction collected more than necessary to reduce its millage rate to zero, the excess could not be diverted to other government expenses. It would have to be carried forward for future property tax relief.

Habersham compared with neighboring counties

Commissioner Kelly Woodall asked Sims how Habersham’s sales tax rate compares with neighboring counties.

Sims said Banks, White and Rabun counties are already at an 8% total sales tax rate. He said Stephens County is also pursuing a property tax reduction sales tax that could bring its rate to 8%.

Habersham currently has a 7% total sales tax rate. If PTRLOST is approved, it would increase to 8%.

Voters decide in November

The proposed tax cannot take effect without voter approval. Habersham County voters will decide the referendum Nov. 3.

Sims said the county is holding educational meetings ahead of the referendum to explain how PTRLOST works. He emphasized that the county can educate voters about the proposal but cannot advocate for its passage.

The county has published an online PTRLOST information center containing frequently asked questions, presentation materials and a tax-reduction estimator.