Sales Tax Question: Why are sales tax funds allocated for project administration?

Augusta residents are set to vote on the consolidated government’s latest special purpose, local option sales tax package in a referendum May 20. The Augusta Chronicle is addressing the 1 percent sales tax collection in a continuing series until election day.

Q: Why are sales tax funds allocated for project administration?

A: Georgia laws governing the imposition of sales taxes allow the local government to reimburse itself for actual costs associated with the sales-tax-funded projects.

The $5 million listed in the package for administration, plus $1 million included on a proposed Engineering project list for administration are typically used for legal advertising and other “legal fees” associated with the tax, including designing contracts between the city and outside agency recipients, according to Deputy Finance Director Tim Schroer.

“More importantly,” however, collections for administration are used to repay city departments – finance, law, procurement and others – whose functions support the tax-funded projects, Schroer said. The city has an annual study done by an outside firm to assess this indirect cost allocation, he said.

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