Freeport, a basic tool for economic development

In September, the Gainesville City Council voted to stop taxing inventory that our industries store in warehouses located within the city limits. This wise business decision made a long-term investment in attracting businesses to Gainesville, encouraging existing industry expansions and eventually increasing tax revenue. We applaud the City’s progressive decision-making on Freeport Exemption and are encouraged that the Hall County Commission will follow in their footsteps.

Five years ago, the Greater Hall Chamber of Commerce spearheaded a campaign to implement Freeport Exemption as a benefit for businesses. Freeport exempts a percentage of a company’s inventory of manufactured goods and some raw materials from taxes. In Gainesville, the exemption was implemented in 20% increments – beginning with 20% of inventory untaxed, the second year 40% untaxed and so on until January1, 2003 when there will be 100% tax exemption on warehoused goods.

In Georgia, about 130 of the 159 counties have some form of freeport exemption. Many cities, like Flowery Branch and Oakwood, already offer 100% exemption from inventory taxes.

As a basic tool in economic development recruitment efforts, freeport exemption can help convince companies to come to an area or to expand an existing facility. In fact, with so many of Georgia’s communities implementing freeport, it basically assists in keeping “your name on the list.” Many companies seeking to locate to an area will not even look at a community that does not offer freeport exemption.

The tax revenue generated by existing industry warehouse expansions (property taxes) along with new industry investments should cover and exceed any tax losses associated with freeport exemptions.

Hall County is at the 60% exemption rate that was set two years ago. We feel it is important that the Hall County Commission increase its exemption to 100% and keep us in the forefront in economic development.