Revenue from Taxes
Franchise Tax revenue is derived from a fee paid to the city from a franchisee for “rental” or “toll” for the use of city streets and rights-of-way. No person, unless exempted, may construct, install, or operate facilities in the public rights-of-way, or provide service using any facilities installed in the public rights-of-way, without a franchise that authorizes each and every service provided. In consideration of the cost incurred to construct, install, operate, or provide services using facilities in the public rights-of-way, franchisees pay the city a fee expressed as a percentage of gross revenues. The franchise agreement (a contractual obligation) specifies the fee to be paid, and the gross revenues to be included in the fee calculation. Franchise fees are paid either quarterly or annually, depending on the franchisee.
Insurance Premium Taxes
Unlike other corporations in the state, insurers are not taxed based on corporate net income, but on gross revenues from insurance premiums. The insurance tax is based on premiums written in the state of Georgia by domestic (chartered in Georgia) and foreign (chartered in other states) insurers doing business in Georgia. Both life insurers (which also include accident and health insurers) and property-casualty insurers pay a tax of 2.25% of premiums to the state. For life companies there is an additional tax of 1% which is collected by the state on behalf of municipalities and county governments. For the property-casualty companies, this local tax rate is 2.5%. The premium tax law also allows for certain deductions from the tax. Life insurers (but not property and casualty insurers) can deduct the local portion of the tax. Secondly, insurers investing a significant portion of their investments in qualified Georgia assets can realize a significant reduction in their premium tax liability. If the insurer has 25 percent or more invested in specified Georgia investments, then the state premium tax rate is 1.25% rather than 2.25%. Further, if the insurer invests 75% or more in qualified Georgia assets then the state premium tax rate is 0.5%. Insurance premium taxes are collected by the Georgia Office of Insurance and Fire Safety and distributed annually.
Every holder (lender) of a long-term note secured by real estate must record the security instrument in the county in which the real estate is located within 90 days from the date of the instrument executed to secure the note. Before recording the security instrument with the clerk of the superior court, the security instrument must be presented to the collecting officer of the county in which the real estate is located. The collecting officer will collect the intangible recording tax due from the holder of the security instrument. The collecting officer will then attach a certificate to the security instrument indicating that the tax has been paid. The tax for recording the note is at the rate of $1.50 for each $500 or fractional part of the face amount of the note. The maximum amount of recording tax on any single note is $25,000. The collecting officer for intangible recording tax is the Clerk of the Superior Court.
Motor Vehicle Taxes
Annual ad valorem taxes are charged and collected by the Gwinnett County Tax Commissioner’s office on behalf of the city for vehicles that were purchased prior to March 1, 2013. The city also receives a proportionate share of the Title Ad Valorum Tax (TAVT) that is now collected by the county Tax Commissioner each time a vehicle is sold and a transfer of the title occurs.
This fee is levied on a business or profession, renewed annually. In the City of Berkeley Lake, the fee is paid by businesses with greater than two full-time equivalent employees.
Personal Property Taxes
This is a tax on generally movable items; that is, those not permanently affixed to and a part of real estate (boats, cars, etc.). Those taxes are billed by the Gwinnett County Tax Commissioner along with county taxes.
These taxes are calculated based upon the value of the property set by the county and a millage rate set by the city. The city has an extremely beneficial intergovernmental agreement with the Gwinnett County Tax Commissioner’s office which must be renewed annually along with setting the millage rate. As such, those taxes are billed and collected by the Gwinnett County Tax Commissioner along with county taxes.
Real estate transfer tax is an excise tax on transactions involving the sale of real property where title to the property is transferred from the seller to the buyer. Before a deed, security instrument, or other writing can be recorded in the office of the clerk of the superior court, the real estate transfer tax must be paid. Once the tax has been paid the clerk of the superior court or their deputy will attach to the deed, instrument or other writing a certification that the tax has been paid. The real estate transfer tax is based upon the property's sale price at the rate of $1 for the first $1,000 or fractional part of $1,000 and at the rate of 10 cents for each additional $100 or fractional part of $100. The tax must be paid by the person who executes the deed, instrument, or other writing or the person for whose use or benefit the deed, instrument, or other writing is executed. The real estate transfer tax is paid by the seller unless otherwise agreed by contract between the parties. The collecting officer for the transfer tax is the Clerk of the Superior Court.
Special Purpose Local Option Sales Tax (SPLOST)
This is a 1% sales tax, applied county-wide, that is dedicated to specific categories of capital projects as allowed by state law. The tax must be approved by voter referendum and is limited to a period not to exceed six years at a time. The city receives a proportionate share of the county's collections based on population. Click here for more information.