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City staff explain SB 33 and the Local Homestead Option Sales Tax; council asks for modeling
Summary
City Manager Justin Strickland outlined SB 33 (LHOST), explaining how a 1% local sales tax—authorized by a local act followed by voter referendum—would convert sales tax receipts into homestead property-tax relief and could, under some digest assumptions, deliver substantial homestead discounts; council requested detailed distribution modeling and resident education.
City Manager Justin Strickland and finance staff spent a substantial portion of the meeting explaining the Local Homestead Option Sales Tax (LHOST) as carried in SB 33 and its potential effect on property-tax relief for homeowners.
Under SB 33 as presented, a county could adopt a 1% local sales tax via a local legislative act followed by a voter referendum; collections would be used to offset homestead property taxes for a 10-year term that includes an automatic-renewal mechanism tied to the digest. Strickland explained the mechanics: sales tax proceeds are first collected, then applied to reduce the next fiscal year's property tax obligation for homesteads; non-homesteaded properties remain taxed at fair market value.
Staff emphasized distribution is digest-driven and automated; the county's share calculation depends on each jurisdiction's digest. Using broad assumptions and Peachtree City's current sales-tax receipts and homestead digest, Strickland indicated the city could see homestead relief percentages in the 80%+ range in some scenarios, though he cautioned staff have not yet run detailed mock distributions and said the earliest possible collection date would be Jan. 1, 2028 if all approvals and a timetable aligned.
Council members pressed staff on variability (what happens if sales-tax receipts fall) and on whether the LHOST would be advertised as a tax increase in years when exemptions change; staff replied the exemption adjusts and advertising rules depend on whether the millage rollback is used and on how the city handles the millage rate in public notices.
Council asked staff to run county-digest-specific modeling and to improve resident education ahead of any referral to the General Assembly or referendum.
