In 2016, the General Assembly authorized a fourth classification of Level 1 freeport exemptions to help keep Georgia competitive with other states as e-commerce expands.  Voters must approve the addition of this class of freeport exemption, just as voters previously approved the City’s existing three classes of freeport exemption (in-process goods, finished goods, goods awaiting shipment).

Adoption of this resolution would call for a referendum and submit it to the Board of Elections.  Because the general election includes a contested congressional race, the deadline will be August 10 to approve a special election question on the general election ballot, November 6, 2018.

The proposed added exemption applies to stock-in-trade (i.e. inventory) held in an e-commerce fulfillment center for less than a year.  To be qualified as exempt, the stock-in-trade must meet three conditions:

          1)  Items can only be sold by remote purchase, such as through the internet, telephone or other electronic means.  No on-site sales are permitted to avoid competition with local retail businesses.

          2) Items must be shipped from the e-commerce fulfillment center to the buyer.

          3) Items for sale cannot be held in the e-commerce fulfillment center for more than 12 months.

The Savannah Economic Development Authority believes the addition of a fourth class of freeport exemption will improve the community’s competitiveness for new jobs and investment opportunity.  The community is uniquely positioned because of the number of distribution warehouses already in the community and the fact that the stock-in-trade already arrives in the community through the Port of Savannah.

SEDA believes E-commerce fulfillment centers would help increase sales tax revenues since sales taxes are collected on purchases, and 42.8 percent of the sales tax dollars are returned to local governments in the form of SPLOST, LOST and E-SPLOST. While local governments would abate the personal property tax on e-commerce inventory, they gain in the real property tax generated from real property taxes on buildings and land and other personal property taxes (besides sales taxes).

Bryan County, Fulton County, Peach County, and Norcross have already approved the fourth class of freeport exemption, and a number of other communities are considering the exemption.

Approval