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Sales Tax and Use Tax in Georgia

Sales and use tax was first adopted in Georgia in the year 1951. The sales tax in Georgia has been on the rise and currently is at 4%. In addition, there are other local sales taxes as well as special district taxes, which range from 0% to 5% depending on the address. Therefore, the total sales tax in Georgia is between 4% and 9%.

How to File and Pay Sales and Use Tax in Georgia

Registration for Sales and Use Tax

All individuals or entities that sell to buyers in Georgia must register for a sales tax account number with the Georgia Department of Revenue (DOR). In Georgia, it is the DOR that administers the sales and use tax. The seller must provide their social security number, and be responsible for collecting and remitting sales tax.

Tax Exempted Goods and Services

In Georgia, essential goods are exempt from sales taxes. These goods include prescription drugs, medical supplies, and manufacturing equipment. Non-prepared food items such as groceries are exempt from state sales tax but are still subject to local sales tax. Apart from essential goods and services, some entities are also exempt from sales tax. These include government agencies, non-profit organizations, and merchants purchasing goods for resale. In this case, the seller is required to collect a valid exemption or resale certificate from merchants to certify each exempt transaction.

Filing and Paying Sales Tax in Georgia

The seller collects the sales tax and then forwards it to the Georgia DOR. Sellers must collect the tax at the point of sale, as it may not be possible to collect sales tax from a customer later on. Sellers must file their taxes by the 20th of the month following the period they are reporting. Moreover, business owners can request the Georgia DOR for permission to do quarterly or annual filings, if they are small businesses. Filing of returns must be done whether there is a sale or not, for all businesses that are still in operation.

Electronic Filing and Prepaid Tax

Sellers must also file their taxes electronically if their sales tax exceeds $500.00, even if this occurred just once. And if the seller’s tax liability in the previous year exceeds $60,000, excluding local sales tax, then they must remit 50% prepaid tax, of the estimated tax. The estimated tax is the trader’s monthly average sales tax for the previous year, after accounting for any local sales and use tax rate.

Late Filing Taxes

Filing on time attracts a discount while filing late attracts penalties and interest charges. As of May 2019, the Department of Revenue offers discounts of 3 percent on the first $3000, with 0.5 percent on any remaining taxes owed. However, sellers can ask for a waiver if they have valid reasons for late filing that they can support with some evidence.

Destination Based Sales Tax

Sellers are required to pay taxes if they ship goods to Georgia, irrespective of where the buyer bought them, or where the seller sourced the goods. That makes Georgia a destination-based sales tax state.

Keeping Records of Sales Tax

Business owners are supposed to keep all records including receipts, purchase invoices, book accounts, or any other relevant sales documents for at least three years. That also applies to businesses that have gone out of business for one reason or the other.

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