RATE OF SALES TAX:
4.00%
LOCAL & COUNTY MAXIMUM RATES:
4.90%
Table of Contents
What Are the Taxable Goods and Services?
The first step in sales tax compliance is determining if the items or services your firm offers are taxable in Georgia.
Traditional Products and Services
Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in Georgia.
Groceries, prescription drugs, and fuel are all tax-free.
In Georgia, several services are subject to sales tax. Visit the Georgia Department of Revenue for a comprehensive list of taxable services.
Digital Products and Services
A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.
Businesses in Georgia are not required to collect sales tax on the sale of digital products or services.
Georgia, on the other hand, has one exemption to this restriction. Businesses are required to collect sales tax on pre-written computer software offered online.
How to Register for Sales Tax in Georgia
If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.
This enables your company to collect sales tax on behalf of the municipal and state governments.
You will need the following information to register:
Previous state IDs and business history
Type of Entity
Basic information such as company name, address, and so on.
Additional company ownership and connections
Data on business activities
Keeping information hidden
Even if you don’t have any sales tax to report or pay, Georgia mandates that every seller with a sales tax permit submit a sales tax return on the due date.
A Resale Certificate might help you save money.
When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.
Sales Tax Collection
After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.
When computing sales tax, consider the following types of transactions:
Store Sales Shipping Within-State Sales Outside-State Sales
Retail Sales
For conventional company owners who sell products or services on-site, calculating sales tax is simple: all sales are taxed at the rate determined by the store’s location.
Here’s an illustration of how this situation may look:
In Augusta, Georgia, Mary owns and operates a bookshop. Because books are taxable in Georgia, Mary charges her clients a flat-rate sales tax of 8.000% on all purchases. This includes Georgia’s 4.000% sales tax, Richmond County’s 3.000% sales tax, and Mary’s local district tax rate of 1.000%.
Sales inside the state
Georgia has a sales tax scheme known as a destination-based sales tax. This implies that long-distance transactions inside Georgia are taxed based on the buyer’s address. This regulation applies to sales taxes levied by the state, county, and city.
Consider the following scenario:
Steve operates his own eBay electronics company from his home in Atlanta, Georgia. A buyer from Savannah discovers Steve’s eBay website and buys a $350 set of headphones. Steve uses the Georgia State tax rate of 4.000% plus the Chatham County tax rate of 3.000% when computing the sales tax for this transaction. The entire cost is $374.50 ($24.50 sales tax) at a total sales tax rate of 7.0%.
Out-of-State Purchases
Georgia firms must only pay sales tax on out-of-state purchases if they have a presence in other states.
Nexus indicates that the company has a physical presence in another state.
Common nexus types include:
A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.
Submit Your Sales Tax Return
You’re ready to submit your sales tax return now that you’ve obtained your Georgia seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.
How to File a Claim
Businesses in Georgia are required to file sales tax forms and make sales tax payments online.
How Frequently Should You File?
The frequency with which you must submit is determined by the total amount of sales tax collected by your firm.
Annual filing: If your company receives less than $50.00 in sales tax each month, you must submit returns on an annual basis.
Quarterly filing: If your company receives between $50.00 and $200.00 in sales tax each month, you need submit quarterly reports.
Monthly filing: If your company receives more than $200.00 in sales tax each month, you must submit monthly returns.
Deadlines for Filing
The deadline for all Georgia sales tax returns is the 20th of the month, unless it is a weekend or federal holiday, in which case the deadline is moved to the next business day.
Penalties for Filing Late
Late filing in Georgia carries a $5.00 fine or 5.00% of the sales tax payable (whichever is larger), plus 1.000% interest on the total amount owing. This penalty accumulates each month, up to a maximum of $25.00, or 25.000% of the due amount.