Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Georgia Sales Tax Guide for Business
byNovember 1, 2020
Confused about whether you need to collect sales tax from buyers in Georgia? It’s understandable, considering every state has vastly different rules on the subject. To help you out, we’re covering the ins and outs of every state, and today we’re focusing on Georgia.
You’re a merchant living anywhere but Georgia
Does your business exist outside of Georgia and you otherwise have no sales tax nexus in the state? Congrats, you’re in the clear, and shouldn’t have to worry about charging sales tax to buyers from Georgia.
You live and/or operate your business in Georgia
In this case your business physically exists or you otherwise operate in Georgia. For example, you have a successful coffee mug business in Moultrie where you sell your items. This means you’re required to collect and remit sales tax to the state.
Georgia is a destination based state, so your primary concern is where the customer is. For instance if your business is physically in Moultrie but gets an order from a customer in Tifton, you charge them the sales tax rate in Tifton.
The state rate for Georgia is 4%. However, there are various rates for each county and some local areas that add additional sales tax. Cobb County adds on 2% for a total of 6%, for example. So if your customer lives in Cobb County, you would collect 6%, even if you live in a county like Stewart with 8% total.
On top of that, the city of Atlanta (located in both Fulton and DeKalb counties) has a separate 1% sales tax. You can find out more on that on the DOR website.
You live-out-of-state but have nexus in Georgia
In this example your business physically exists out of the state but you have sales tax nexus due to a warehouse, employee or other reason. If this is the case, then you must collect and pay sales tax to the state of Georgia.
Again, Georgia is a destination based state, so your only concern is where your customers live. The base rate of the state is 4%, but individual counties and local areas will tack on extra percentages, so be sure to look at the tax rate table first.
Here’s what you need to know about Georgia nexus from the DOR website:
Who Must Register for Sales and Use Tax?
Every person, partnership, limited liability entity, firm, or corporation who sells, uses, distributes, or manufactures tangible personal property in Georgia must register for sales and use tax if:
• They import goods from any state or foreign country for sale at retail, or for use, consumption, distribution, or storage in Georgia.
• They lease or rent tangible personal property in Georgia.
• They maintain an office, distribution house, sales room, warehouse, or inventory in Georgia.
• They otherwise qualify as a “dealer” as defined in the Official Code of Georgia Annotated, Section 48-8-2.
Filing sales tax in Georgia
If you must collect sales tax in Georgia, first you must register your business with the state online. You can also grab the necessary forms from the DOR websiteand fax them in to the Registration and Licensing at 404-417-4318 or 404-417-4317.
The forms must be filed before the 20th following the period for which the tax is due. Georgia is on primarily a monthly basis but the DOR may permit the filer to file less frequently if he or she has a fairly low sales volume in the state.
If you need to file a sales tax return in Georgia, TaxJar has your back. You can now enroll in AutoFile for the state of Georgia and we’ll automatically file your sales tax return for you! Find out more about AutoFile.
Sales tax on shipping
In Georgia, shipping is considered a taxable charge. From the Georgia Statutes and Codes website:
“Delivery charges” means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser of personal property or services including, but not limited to, transportation, shipping, postage, handling, crating, and packing.
Summary: Georgia is a pretty average destination-based state with lots of tax rates
Georgia is a destination based state, which means you only need to worry about charging the sales tax rate where your customers are located. If your business exists outside the state and you have no nexus, you don’t have to collect. If your business is in the state or you otherwise have nexus (such as caused by a warehouse or employee), you must collect sales tax.
Georgia’s state rate is 4%, but each of the state’s 159 counties has its own rate to add on. Additionally, the city of Atlanta has a separate 1% tax. Before collecting you must register your business then submit payments before the 20th of the month following the period in which the taxes are due. While generally it’s on a monthly basis, the Department of Revenue may make an exception for sellers to pay annually or semi-annually.Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.