Local officials in Chattooga County, including County Commissioner Andy Allen and the leadership of its four municipalities – Summerville, Trion, Menlo, and Lyerly – are exploring the implementation of a new sales tax designed to alleviate the burden of property taxes on residents. The proposed measure, known as the Floating Local Option Sales Tax (FLOST), is a new tool authorized by recent state legislation aimed at providing property tax relief.

FLOST is a component of House Bill 581, also dubbed the “Save the Homes Act,” which was signed into law in April 2024 and took effect on January 1, 2025. Its primary goal is to allow counties and municipalities to shift some of the tax burden from property taxes to a sales tax, particularly in response to the new floating homestead exemption that limits property assessment increases.

Under the provisions of FLOST, if approved by local voters, the county could add up to an additional 1% in sales tax. This revenue would specifically compensate for any losses stemming from changes in the homestead exemption. To be eligible, Chattooga County and its cities must levy a property tax and have a base-year or floating homestead exemption in effect. A critical stipulation is that if any city or the county declines to implement the floating homestead exemption, no entity within that county is eligible for FLOST.

The decision to enact FLOST rests entirely at the local level, requiring approval through a county-wide ballot referendum. Any proceeds generated from FLOST must be strictly used for property tax relief, as outlined in an intergovernmental agreement between the county and participating cities. The tax can be levied for a maximum of five years before requiring renewal, which involves legislative delegation approval, a new intergovernmental agreement, and another voter referendum.

Debate Over Sales Tax Impact

While proponents view FLOST as a mechanism to provide tangible property tax relief, critics are raising concerns about the potential impact of an increased sales tax, particularly its regressive nature. Sales taxes are often criticized for disproportionately affecting low-income individuals and households.

According to the Georgia Budget and Policy Institute, low-income households tend to spend a larger percentage of their income on basic necessities that are subject to sales tax, even with certain exemptions. This includes prepared food, utilities, and various goods, leading to a greater share of their income being allocated to sales tax payments compared to wealthier individuals, who may spend more on non-taxable investments or savings. This effectively reduces the purchasing power of low-income families and can exacerbate existing economic inequalities.

Although Georgia does offer exemptions for some necessities like most groceries and prescription drugs, these do not fully offset the regressive nature of the overall tax system. The institute notes that certain services disproportionately utilized by higher-income individuals may also be exempt, further tilting the revenue system.

Tourism and Revenue Outlook

Another point of discussion revolves around the potential for tourists to contribute to the sales tax revenue. However, critics in Chattooga County point out that the area currently lacks adequate tourist accommodations. Many visitors to the county, including those here for recreational or cultural purposes, often travel to neighboring counties for hotels and motels, meaning the impact of tourist spending on an increased local sales tax might be limited.

Despite these concerns, Chattooga County’s overall sales tax revenue has shown an upward trend in recent times, reaching over $3 million annually. The decision to pursue FLOST now hinges on a collaborative agreement between the county and its municipalities, followed by a public education campaign and, ultimately, a county-wide vote.