By Gerhard Schneibel

Rather than charge Sandy Springs-based energy provider Mirant Corp. more than $12 million in occupancy taxes this year, Sandy Springs in September capped the occupancy taxes it charges businesses at $400,000. Now the city could take legal action in an attempt to force Mirant to pay $1.2 million in capped tax bills dating back to 2006.

Mirant contends it doesn’t owe the city occupancy taxes because its sales occur out of state, City Attorney Wendell Willard said.

Mirant and attorney Lawrence Gold didn’t comment.

“They don’t pay, as we see it, taxes out of state to other jurisdictions,” Willard said. “If they don’t pay it out of state, it’s taxable.”

The occupancy tax cap sparked some debate when it came before the City Council in September, and some council members questioned the cap’s legality. It could give the impression that one company is receiving preferential treatment, said Dist. 4 Councilwoman Ashley Jenkins.

The second-most-taxed company in the city, San Jose, Calif.-based Cisco Systems, won’t benefit from the cap. It was charged $398,144 for 2008, according to Assistant City Manager Steve Rapson.

Negotiations between the city and Mirant haven’t been adversarial, Rapson said. “Every time we’ve wanted to have a meeting with them, we’ve been able to get to the table.”

Willard said the city intends to proceed “this week with getting the ball rolling” on a tax execution order.

Dist. 1 Councilman Doug MacGinnitie said Mirant’s abnormally high occupancy tax bill is based on nationwide energy trading that is accounted for in Sandy Springs.

“All of that revenue gets swept up in our business license calculations here,” he said. “I think it’s a hard job to set the tax bills … so that there’s a balance between the revenue that the government is going to get and the needs of businesses and the individuals that live here.”

MacGinnitie made the September motion to approve the tax cap. He removed from the cap a 3 percent annual increase to the $400,000, something he opposed on the grounds that it would be a “cost-of-living increase.”