Georgia Sales Tax Guide

As a business owner, you may feel a little overwhelmed when it comes to collecting and remitting sales tax. We have prepared this guide so that you can feel confident that your sales tax obligations are taken care of.

After reading this guide, you will know:

• How to contact the Georgia Sales Tax Department
• How to be prepared for your call with the Georgia Sales Tax Department
• When to charge sales tax in Georgia
• What goods and products are taxable in Georgia
• When you establish a sales tax nexus with the state of Georgia, and the nuances of various thresholds
• How to register for a sales tax license in Georgia
• How to collect sales tax in Georgia
• How to file and pay sales tax in Georgia

Our Georgia Sales Tax Guide will give you the confidence to manage your Georgia sales tax needs from beginning to end.  If you have any other questions to help you navigate your way through Georgia tax sales, we are here for you. 

 Georgia Sales Tax Contacts

☐  Have you wanted to contact the State of Georgia Sales Tax Department?

☐  Are you unsure if you should call them, or email them through their website?  

☐ Have you ever wondered what information you should have ready before you contact them?

If you answered “Yes” to any of these questions, we have the answers for you.

Even though it is 2019, you may be surprised that you still need to contact the State of Georgia by phone as a business taxpayer. While they do have a website, the only email address provided for contact information is for this with Alcohol and Tobacco related questions.

Now, I know some people may think this is a disadvantage.

Surprise! Surprise! Old-fashioned telephone calls seem to still be the most efficient method for handling your tax matters. You may contact the Georgia Department of Revenue at (877) 423-6711.

Before you call the State of Georgia Sales Tax Department, make sure that you have the following information handy:

• Taxpayer Name
• EIN
• Sales & Use Tax ID Number

I promise, this will expedite your call. It will also save you valuable time that you can spend on building your business.

One more thing... If you are calling on behalf of someone else who is the taxpayer (whether an individual or a business), please be sure to get a Georgia Power of Attorney signed before you call. For the State to talk to you legally about a third party’s taxes, you need to have one of these bad boys, so you do not waste your time.  

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

Georgia Sales Tax Registration

Are you a new business and unsure if you need to register for sales tax in the state of Georgia? If so, you are in the right place.

☐ Do you sell tangible items?

☐ Or, do you provide services that are subject to taxation?

If you answered “Yes” to either question, you need to register for a sales tax permit in the state of Georgia.

Registering for a sales tax permit can be stressful, especially if it is your first time doing it. But there is good news,  you only need to do this once.

Your sales tax registration will remain in effect for the duration of your business if there are no significant changes to the business such as ownership or structure. In that case, you may need to renew or make changes to the registration.

For your initial registration, the process is quite simple so long as you are prepared. I am going to walk you through it right now.

Preparation is key. You will want to know:

• How and where to register
• Information needed
• Cost
• Other requirements such as a Tax ID or other agencies you may need to register with.

As my clients frequently ask about these topics, I am going to give you all the information about these topics. 

So, let’s get to it!

How do I register to collect sales tax in Georgia?

New businesses may register for an Georgia Sales and Use Tax Certificate of Registration online by visiting the Georgia Department of Revenue and following the instructions provided.

If you prefer, you may register for a Sales and Use Tax Certificate via snail mail. You just need to complete and mail in State Tax Registration Application (CRF-002).

 Beware!

We don't recommend registering via snail mail as it is being phased out.

→ Register Online Here ←

What information do I need to register for a Georgia sales tax license?

This is an excellent question!

Be sure that you have this information on hand before you sign up for Georgia Sales and Use Tax License:

• Business type
• EIN
• Legal name
• DBA name
• Physical business location address
• Date of first Georgia sales
• Fiscal year-end: Usually this is 12/31
• Accounting method- Accrual or Cash basis
• NAICS code
• Business officer information (name, effective date, SSN, home address, phone number)

Remember, preparation is essential. Once, you have all this information, you can go online and register for your sales tax license at the Georgia Department of Revenue website. 

How much does it cost to register for a Georgia sales tax license?

I have more good news for you.

There is no cost to register for a Georgia Business Tax License.

Score!

Do I need a federal tax ID number or EIN to register for a sales tax license in Georgia?

Yes, you need it.

Do not fret! It is simple and easy.

You can register for a Federal EIN here.

Which agencies in Georgia do I need to additionally register with?

This answer is not so straightforward- every business is different.

You need to verify with the Georgia Department of Revenue which government agencies you will be required to register with.

Potential agencies include:

• Georgia State Department of Labor
• Georgia Local Tax Jurisdiction

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You’re ready to go!

You are now prepared to register for your sales tax license in Georgia because

• You know to register online, preferably, at Georgia Department of Revenue
• You know what information you need to have before registering online
• You know you do not need to pay a fee, so there is no need to worry about that.
• You should have acquired a tax ID or EIN.
• You have determined what other agencies you may also have to register with.

Registering for your sales tax license will be smooth as long as you are prepared. I suggest keeping all the needed information in a folder, both in hard-copy and soft-copy so it is just a click away. And do take advantage of the resources available online and through your tax professional.

Georgia Sales Tax FAQ

By now, you have probably contacted the Georgia Department of Revenue. You maybe even registered for a sales tax license. But now, you need to know when to charge a sales tax.

Let’s discuss the basics of taxable goods in the state of Georgia.

Don’t worry if you’re unsure when to charge a sales tax and when not to. These two questions are quite common for new business owners, like yourself.  

When do you charge a sales tax?

Let’s look at some frequently asked questions from my clients to illustrate the nuances of when a business needs to charge sales taxes in Georgia, and when a business doesn’t need to.

Let’s start with the first question...

What products are considered taxable or not taxable in Georgia?

As a business, it is important that you keep in mind that most goods and products are taxable, with a few exceptions including:

• Certain groceries
• Prescription medicine and medical devices
• Machinery and chemicals used in research and development
• Services

 The bottom line is …

If you are selling a tangible product that does not fall into one of the exceptions, you need to charge a sales tax.

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In addition to knowing what kinds of goods are taxable, you also need to keep in mind some other factors that trigger a sales tax in the state of Georgia.

So, I am going to go over the following frequently asked questions:

• Is Georgia an Origin or Destination Sales Tax State?

• What creates a sales tax nexus in Georgia?

• What is the economic threshold in Georgia?

• Does Amazon have fulfillment centers in Georgia?

• Does Georgia have a Click-Thru Nexus?

Why? These questions reveal that knowing when to charge a sales tax is more than knowing if a product or good is taxable. These frequently asked questions concern the nature of the business and nature of relationships between the buyer, seller, and any third parties in the sale of products and goods.

First things first. Let’s talk about what kind of sales tax state Georgia is...

Is Georgia an origin or destination sales tax state?

Georgia is Destination Based Sales Tax State.

For business purposes, you need to be aware that there are essentially two types of sales tax:

• Origin Based Sales Tax, which you charge based on your business location.
• Destination Based Sales Tax, which you charge based on the location of the buyer.

As a business, you want to know three things:

1. The difference between an origin and a destination-based sales tax
2. Where the seller is located
3. Where the buyer takes possession of the product sold

 As such, you want to ensure you appropriately charge sales taxes in your point of sale or eCommerce software, or risk under or over collecting.

PROTIP: Charge Georgia sales tax based on the location of the buyer.

Now that we know what kind of sales tax state Georgia is, we need to also consider other factors that require businesses to collect Georgia sales taxes. 

There are several thresholds a business may establish that will trigger sales taxes in the state of Georgia. In discussing this issue, I will address three commonly asked questions by my clients that deal with recognizing when a business has reached a threshold.

• What creates a sales tax nexus in Georgia?
• Does Amazon have fulfillment centers in Georgia?
• Does Georgia have a Click-Through Nexus?

If you are overwhelmed with determining whether your business has established a nexus with the state of Georgia, you should not worry. By looking at these three questions in more detail, you will be better equipped to recognize when your business creates a nexus, or if your business has already created one.

Afterwards, there are ways you can manage your tax needs using some tools and resources we will go over in discussing the variety of thresholds recognized by the state of Georgia that constitute a sale tax nexus.

What creates a sales tax nexus in Georgia?  

This question applies to businesses located in Georgia and businesses outside of the state of Georgia. If you create a sales tax nexus with Georgia, you are subject to sales taxes.

A Sales Tax Nexus is also known as "sufficient business presence.”  It is legal jargon that essentially means you have created a taxing connection with a state. In other words, you have to charge sales tax in Georgia because you created a Sales Tax Nexus.

What if your main headquarters are in another state? You may still have to charge pay sales tax to the Georgia Department of Revenue even if you never step foot in Georgia.   

So, how do you create a Sales Tax Nexus in Georgia?

You can create nexus in Georgia by:

• Having an office or place of business in the State of Georgia
• Having an employee present in the State of Georgia
• Holding your goods in a warehouse in the State of Georgia
• Owning real or personal property in the State of Georgia
• Delivering merchandise in Georgia (specifically in the seller’s vehicle/fleet, etc.)
• Hiring independent contractors or other representatives in Georgia

In addition to these six ways in which a business creates a sales tax nexus, businesses located outside of the state of Georgia can find themselves subject to Georgia sales taxes via the Economic Nexus.

An Economic Nexus occurs in two situations. The first is when your gross revenue is at least $250,000. The second is when you have engaged in at least 200 transactions in the state of Georgia. Only one of these situations needs to occur to create an Economic Nexus.

There are indeed several thresholds that establish a sales tax nexus.

PROTIP: When you hit a threshold once, you have created a Sales Tax Nexus moving forward.

Does Amazon have fulfillment centers in Georgia?

Yes, Amazon has two fulfillment centers in Georgia. For your convenience, here are the addresses of the Amazon fulfillment centers in Georgia:

Do you sell your products on Amazon? Are you an Amazon FBA (Fulfillment by Amazon) seller? If so, you have greatly increased your chances of creating nexus in each state that Amazon has a warehouse.

For instance, you need to know if they store your products at one of these warehouses in Georgia. If they do, you have created a Sales Tax Nexus with the state of Georgia.

You’re probably asking yourself Why?

If you inventory ends up on the shelves of one of Amazon’s fulfillment centers, you may have created a nexus with that state. 

PROTIP: You create sales tax nexus by holding your goods in a warehouse in the State of Georgia.

Considering Amazon has numerous fulfillment centers throughout the United States, this could make the whole process of figuring when to charge sales tax in Georgia even more intimidating.

There is no need to worry.

We can help guide you through this process. We often use A2X + Wherestock to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance.

Does Georgia have a click-through nexus?

Yes, Georgia has Click-Through Nexus.

This question is important if you hired someone to promote your products. You may have created a Sales Tax Nexus in the state of Georgia if they promoted their products there.

Let’s break it down:

A business hires an affiliate marketer in the state of Georgia.

The marketer does not sell the good directly to the buyer. Instead, they just promote the products and goods.

Using an affiliate marketer creates a Sales Tax Nexus that is specifically know as Click-Through Nexus.

How?

Even though the affiliate marketer is not selling the goods directly, they establish a Click-Through Nexus by:

1. Promoting your products in Georgia even though you (the seller) may be located out of state, and
2. Receiving a commission on the sales made through their marketing campaign.

In other words, even though the goods never actually pass through the hands of your affiliate, you have created a Click-Through Nexus subjecting you to the sales tax regulations.

Click-Through Nexus can be super tricky, but it is very important to understand the implication of employing an affiliate marketer.

PROTIP: With click-through nexus the seller is ultimately responsible for any taxes that need to be collected resulting from the affiliate generating sales.

In conclusion, even if the seller is not located in the state of Georgia, the seller is subject to the sales tax regulations if the sales reach over a certain threshold. Georgia's current click-through nexus rate was $50,000 in the preceding 12-month period. If your affiliate marketer(s) sells less than that in a one-year period, you are golden.

 Altogether, there are three main thresholds that trigger a sales tax requirement in the state of Georgia.

1. The basic Sales Tax Nexus including the Economic Nexus Threshold
2. A Sales Tax Nexus based on where your inventory is stored such as at an Amazon fulfillment center
3. A Click-Through Nexus based on where you promote your products.

Collecting sales taxes in the state of Georgia does not need to be burdensome. Keep these thresholds in mind. Being aware of when you need to collect and pay sales taxes in the state of Georgia, you can avoid audits, fines, and repayments. 

To more effectively manage your Georgia sales taxes, your eCommerce software will track where your product has been shipped from and where it is headed, so you should be able to easily see the volume of sales in both dollar amount and number.

Before we conclude this topic, I want to go over a related question my clients regularly ask...

Is Georgia a streamlined sales tax state?

Yes, Georgia participates in the Streamlined Sales Tax program.

Streamlined Sales Tax, aka SST, is an effort by local and state governments to help ease the burden of collecting and remitting sales tax.

As of now, not all 50 states are part of this program. However, if you are subject to Georgia sales tax regulations, you should consider registering your business with the SST to make your sales tax life easier.

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It’s time to wrap it up.

Knowing when to charge sales tax in Georgia is one of the most important aspects of navigating your tax burdens as a business. The first step is identifying if your business has created a sales nexus with the state of Georgia. The next step, if you establish a sales tax nexus with the state of Georgia, is to use the tools and resources such as the Streamlined Sales Tax Program to alleviate your tax burdens, so you can focus more on your business and making money.

Keep this guide handy to help you determine when to charge a buyer sales tax, so you and your business can be better-equipped to avoid situations like paying fines, repaying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Georgia.

Having this information accessible will help you handle your tax needs more effectively in less the time.

Collecting Sales Tax in Georgia

Collecting sales tax in Georgia is required for businesses who have a sales tax nexus with the state.

One you recognize you need to collect taxes, you may have questions about how to go about that.

Many clients tend to ask me the following four questions:

• How do I collect Georgia sales tax?
• Who is eligible for Georgia Sales Tax Exemptions?
• What should I do if my customer is exempt from sales tax in Georgia?
• What happens if I lose a Georgia sales tax exemption certificate?

After reading this, you will be better equipped to collect sales taxes.

How do I collect sales tax in Georgia? 

As discussed previously, Georgia is a Destination Based Sales Tax State.

So, if you live in Georgia, collect sales tax based on the sales tax rate at your buyer’s address.

Your eCommerce software should be able to calculate this for you on the fly.

What are the current Georgia sales tax rates?   

Sales Tax Rates change all of the time- and vary by what is being sold! It's best to check out the GeorgiaDepartment of Revenue site here. 

Generally, here are the ranges of sales tax rates in Georgia: 

What is exempt from sales tax in Georgia? 

There are certain products that are exempt from sales tax in the state of Georgia. The exemptions include:

• Services
• Certain groceries
• Prescription medicine and medical devices
• Machinery and chemicals used in research and development.

Who is eligible for Georgia sales tax exemptions?

In addition to knowing what products are exempt from sales tax in Georgia, it is important to also know who may be exempt.

Under Georgia law, taxable goods may be eligible for a sales tax exemption depending on the type of buyer or the way the goods will be used. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

• Government agencies
• Non-profit organizations
• Religious groups
• Out-of-state buyers (should their business not have nexus in their home state).

 Altogether, sales tax exemptions apply if the buyer falls under one of these categories.

What should I do if my customer is exempt from sales tax in Georgia?

Selling to buyers who are tax-exempt is something every business owner eventually encounters.

The responsibility here resides on the seller—you!

It is up to you to collect a Georgia sales tax exemption certificate at the point of sale and to keep it on file. Such certificates must be produced upon request in the event of an audit to justify tax-exempt sales.

Failure to produce the tax exemption certificate may result in the outstanding tax being passed on to the seller.

Remember, you want to collect and file a copy of the certificate.

What happens if I lose a Georgia sales tax exemption certificate?

If you are audited and cannot produce an exemption certificate for a buyer, you may be held responsible for the uncollected sales tax by the Georgia Department of Revenue. In some cases, late fees and interest will be applied.

Remember, when you have a customer who is exempt from sales tax in Georgia, you want to collect and file a copy of the certificate in the event of an audit by the Georgia Sales Tax Department.

If you lose the copy or fail to keep a copy on file, you risk being held responsible for the sales tax yourself. This is similar to what happens if you did not collect sales tax for a buyer who is not exempt.

Altogether, if you did not collect it and can not prove that you did not have to collect it, you still owe it.

Does Georgia have a sales tax holiday?

No, Georgia does not have a sales tax holiday. Boo. :(

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Now you know who to collect sales tax from and for what, who and what is exempt from sales tax, and how to collect sales tax in the state of Georgia. Once again, remember to keep a copy of any certificates exempting a buyer from sales tax. Being prepared makes collecting sales tax in Georgia easy, as well as answering to any potential audits.

Filing and Paying Sales Tax in Georgia

It is time to talk about filing and paying your sales taxes in Georgia. In this section, I am going to cover the following frequently asked questions from my clients:

• When is Georgia sales tax due?
• What are the Georgia sales tax thresholds?
• What if a Georgia sales tax filing date falls on a weekend or holiday?
• How do I file a Georgia Sales Tax Return?
• How do I correct a Georgia sales tax return?
• What happens if I don’t collect sales tax?
• What happens if I file or pay my sales tax return late?
• Do I need to file a return if I don’t collect any sales tax in Georgia?
• If I close my business, do I need to file a final sales tax return?
• Does the Georgia Department of Revenue offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Georgia sales tax.

When is Georgia sales tax due?

You must file and pay your sales tax no later than the 20th day of the month following the period being reported. For example, you will need to pay December sales tax by January 20th to avoid penalties and interest

What are the Georgia sales tax thresholds?

There are three thresholds you need to know. 

It is important to note that each mentions a 6-month period. The difference between the monthly and quarterly threshold is whether the averages sales tax is less than or greater than $200/month. If it is greater than $200/month, you need to file and pay sales taxes monthly.  If it is less than $200/month, you may pay quarterly. If you average less than $50/month in sales taxes, you can file and pay annuals. As you collect more and more sales tax, you will be required to file and pay sales taxes more often based on an annual, quarterly, or monthly basis.

Not sure how to determine your tax liability?

You can review your sales tax liability reports in two ways. One is through your eCommerce software. The other is through your point of sale to see how much sales tax you have collected. Either way will help you determine not just your tax liability, but your corresponding threshold: annual, quarterly, or monthly.

Don't worry though! The state will let you know when your due dates change. :) 

Watch your mail for a letter from the State of Georgia so that you don't miss any deadlines.

What if a Georgia sales tax filing date falls on a weekend or holiday?

If the sales tax deadline falls on a weekend or holiday, the deadline is moved to the next business day.

This is typically the Monday following the weekend or the day after the holiday. However, we recommend paying the sales tax before their due so that you don't accidentally miss a deadline.

How do I file a Georgia sales tax return?

You can prepare and remit sales tax in one of two ways: by paper or electronically.

To file by paper, you will need to complete form ST-3, and mail return and payment to:

State of Georgia, Department of Revenue

PO Box 105408

Atlanta GA 30348-5408

To file and pay electronically, you can visit the Georgia Department of Revenue online.  

It is important to note that:

ProTip: Filing electronically is required when the tax liability is greater than $500.00.

 →Learn how file a simple sales tax return here ←

How do I correct a Georgia sales tax return?

Did you make a mistake when filing your sales tax return? You can fix your mistake easily on both a paper and electronic return.

You should amend the return in the same manner in which you filed it.

If you filed by paper, check the ‘Amended Return’ box on form ST-3, mail amended return to:

State of Georgia, Department of Revenue

PO Box 105408

Atlanta GA 30348-5408

If you filed electronically, login to the Georgia Department of Revenue. On the website, you will be able to re-file/amend the return for the intended period.

Some things to keep in mind.

• The amended return should reflect the changes to the original sales.
• The amended return should use the same tax return information.
• The amended return should include even the unchanged data.

Now, you should be all set to refile or amend your return if needed. Click the link below if you wish to learn more about amending a sales tax return.

→Learn how to amend a sales tax return here ←

What happens if I don’t collect sales tax?

Oh no! You were supposed to collect sales tax in Georgia and you did not.

This can happen for two reasons. One, you did not know you were supposed to. Two, you choose not to collect sales tax. Either way, you will be held responsible for the tax due.

PROTIP: You still owe the Georgia Department of Revenue for sales taxes if you did not collect them from the buyer.

Do not try to avoid paying them if you made a mistake in collecting sales taxes. If you ever get audited by the Georgia Sales Tax Dept and they find that you owe back sales tax, they will hit you with penalties and fines.  

What happens if I file or pay my sales tax return late?

It's best not to file your Sales Tax late.

However, it can happen. So, if you do, it is important to know what sort of penalty you are in for.

Do I need to file a return if I don’t collect any sales tax in Georgia?

Yes, you will need to file a “zero-tax” return if you don't have any sales during a taxing period.

If I close my business, do I need to file a final sales tax return?

Yes, you will need to file a “final sales tax” return when you close your business.

Does the Georgia Department of Revenue offer a discount for filing on time?

Yes, 3.0% on first $500 and 0.5% on any remaining amount with no maximum. You should be taking advantage of this discount each month! 

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Now that we covered all our bases for filing and paying sales taxes in the state of Georgia, you should feel more at ease about the process.

Some things to remember:

• Due dates are important. If anything, file and pay your taxes early.
• There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
• You can file and pay your taxes electronically or by mail.
• If your tax liability is more than $500, you need to file electronically.
• If you need to amend a return, do so in the same manner (electronically or by mail) that you filed originally.
• If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Georgia.
• You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
• Even if you collect no sales tax, you still need to file a return.
• You need to file a “Final Sales Tax” when you close your business.

Let’s leave the good news for last (even though I know you will remember this).

• There is a discount for filing your tax return on time.

 

 

 

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Please note: This blog is for informational purposes only and the information is accurate as of 11/01/2018. If you want legal advice on sales tax law for your business, please contact a Sales and Use Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog may be out date by the time you review it. 

Last Updated: 11.01.18