Sales tax collection and compliance project

February 18 , 2010

Several county and city governments and the Department of Revenue (DOR) have launched a pilot project to analyze and improve the collection of sales taxes. Cherokee County and Canton, Hall County and Gainesville, Chatham County and Savannah, and Lowndes County and Valdosta have been comparing their occupation tax records with DOR's sales tax data. Businesses that are listed on the records of either state government or local government but not both are closely examined.

Hall County and Gainesville reported their findings at a pilot project meeting with DOR on October 27, 2009. Hall County discovered that there were 881 businesses in DOR's data set that were operating without paying occupational taxes. Upon discovery of the discrepancy, Hall County and Gainesville immediately sent notices to these businesses. The comparison also revealed that there were 957 sales tax remitting businesses located within Hall County and Gainesville that were paying occupational taxes but were not included on DOR's sales tax database. DOR has sent letters to the 957 businesses investigating their findings. If a business does not respond within 60 days, the Department will force register the businesses and begin a sales tax assessment process.

GMA, ACCG, DOR and the Secretary of the House Ways and Means Committee Representative David Knight met yesterday and worked on ways to improve the data sharing and collection of sales taxes. One proposal is to have a secure web-based sales tax registration verification site. Local governments will be able to input a sales tax id number or a federal employee identification number into the website and check if a business is registered with the Department of Revenue for sales tax collection before issuing a business occupation certificate.

The commissioner of DOR recently stated at an appropriations meeting that the sales tax pilot project is going very well and we are planning and preparing to expand it. The pilot project is still in the early stages; however the initial results clearly demonstrate that a formalized information sharing methodology between local governments and the Department of Revenue would be extremely beneficial for both the State and local governments.