Newspaper article The Florida Times Union

Tax Collection Solution in Debate; Some Say Uncollected Taxes May Provide Up to $1 Billion

Newspaper article The Florida Times Union

Tax Collection Solution in Debate; Some Say Uncollected Taxes May Provide Up to $1 Billion

Article excerpt


ATLANTA - When state and local governments need more money to operate and politicians hesitate to raise taxes in an election year, a solution that seems politically pain-free is to squeeze money out of tax cheats.

Local officials across the state have long argued too many merchants are failing to forward to the government the tax they are required to charge on purchases. Some estimate stricter enforcement could reap $1 billion in uncollected sales taxes annually.

Since many cities and counties have imposed various sales taxes, they would benefit from the extra money almost as much as the state would.

At the same time, city and county commissioners voice frustration with the Georgia Department of Revenue on how it allocates the taxes it does collect. They argue the taxes often go to the wrong local government or that the state merely pockets funds rightfully due local governments.

Georgia Revenue Commissioner Bart Graham, however, says there is considerable misunderstanding. For example, he told legislators last month that it is a myth that $1 billion each year goes uncollected.

"There aren't many large or substantive businesses that aren't already on our radar screen," he said.

The department sent letters to 45,000 companies last year that weren't filing sales taxes and netted just $4.9 million.

And the confusion about payments to the local governments? He said that's caused by retailers sending tax payments without including sufficient information to trace it to the correct county of origin.

Senate Finance Chairman Ronnie Chance, R-Tyrone, said the perceptions about the Revenue Department's inefficiency are on target.

"Many people share that sentiment," he said. "That's another thing we've got to do is make sure it's operating as efficiently as possible, because it's just not there. It's very difficult to get a handle on what it is."

Democratic legislators have picked up the call of local government officials around the state to get the Revenue Department out of the business of collecting sales taxes. Last year, Democrats pushed a bill that would allow each county to collect the taxes locally and forward the state its share, essentially the opposite of how the process works now. …

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