Good explanation of HOST

Even for a tax collector like me, the Homestead Option Sales Tax (HOST) can be tricky to understand, much less explain to the public. That’s why I was impressed by this straightforward, recent explanation of the SPLOST, LOST, ELOST and HOST by state Sen. Bill Heath, with a little of my own commentary in italics mixed in:

In addition to Georgia's state sales tax rate of 4%, there are four different types of local-option sales and use taxes that may be levied by local governments. They are most commonly known by their acronyms-SPLOST, LOST, ELOST and HOST. In addition to showing up on your sales receipts, you've likely also seen one of them show up on your ballot as a voter referendum.

Note: DeKalb County has the ELOST, HOST, and MARTA sales taxes. Last year the DeKalb County Board of Commissioners considered replacing the MARTA tax with a SPLOST.

A Special Purpose Local Option Sales Tax (SPLOST) is normally a one percent county sales and use tax that is enacted by the direct vote of the constituents. Used to fund specific capital outlay projects, a SPLOST is first initiated by a county government for approval by the voters. To increase accountability, this voter referendum must state the purpose of the tax, the length of time it will be imposed and the amount of revenue it will raise. This method of enacting a SPLOST is a sure way for constituents to have a direct voice over projects and the money they give to the local or state government...

Another type of local sales and use tax is the Local Option Sales Tax (LOST). A LOST also requires voter approval, but rather than being devoted to a specific project like a SPLOST, a LOST is intended to be used as replacement revenue for the local property tax. Revenues from this tax must go to reducing the millage rate and that reduction must be reflected in local property tax bills. 154 of Georgia's 159 counties utilize a LOST. The total revenue from this type of local sales and use tax topped $1.3 billion in 2009.

An Education Local Options Sales Tax (ELOST) allows county schools to propose their own capital improvement programs to voters. Unlike the SPLOST, the revenues from this optional 1% sales tax are not distributed to the county government but are instead levied by boards of education and must used for capital projects for educational purposes or may contribute to the retirement of the system's existing general obligation debt. Excess proceeds from an ELOST must be used to retire school-system debt, or if there is none, to roll back the millage rate. The total revenue from this type of local sales and use tax topped $1.3 billion in 2009.

The majority of Georgia counties have a 7 percent sales tax, that is, the 4 percent state sales tax plus a LOST, SPLOST, and ELOST. DeKalb is somewhat unusual in this regard by neither having a LOST (like Fulton County) nor a SPLOST (like Cobb or Gwinnett County). And DeKalb is distinctive in another way…

The final type of local sales and use tax is the lesser-known Homestead Option Sales Tax (HOST) which may be collected by counties that do not levy a LOST. A HOST is a sales and use tax option that must devote at least 80 percent of its proceeds to provide for an increased homestead exemption from county ad valorem taxes. The remaining 20 percent may be used for capital outlay projects and excess revenues must be used to adjust the millage rate. Only DeKalb and Rockdale counties currently utilize a HOST.

There’s a little more to read from Sen. Heath at this link, but it’s mostly about his home district which is on the other side of Atlanta.