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The Ultimate Guide To Georgia Sales Tax

Welcome to our handy guide on Georgia sales tax. We'll walk you through everything you need to know, from the specific sales tax rates in different counties and cities across Georgia to answering some of the most common questions. Plus, we'll guide you on how to efficiently collect and file your sales tax in Georgia.

Sales Tax Rate

4.00%

Local Rate?

Yes

Website

Georgia Department of Revenue

Sales Threshold

$100,000

Tax Line

(877) 423-6711

Transactions Threshold

200

What is Nexus?

You'll need to collect sales tax in Georgia if you have nexus there. There are two main ways that sellers can be tied to a state when it comes to nexus: physical, or economic.

Physical nexus means having enough tangible presence, or activity in a state to merit paying sales tax in that state.

Economic nexus means passing a states' economic threshold, for total revenue, or the number of transactions in that state.

Calculating Nexus in Georgia

Physical Nexus

Physical nexus in Georgia is pretty straightforward. It means your business has a physical tie to the state. Here are some ways how:
  • Physical Location: If you have a store, office, warehouse, or any physical space in Georgia, that's a direct link – you've got physical nexus.
  • Inventory Storage: Keeping inventory in the state, even temporarily, counts too. This includes using warehouses or storage facilities in Georgia.
  • Sales Representatives or Agents: Having salespeople, employees, or contractors working for you in Georgia also creates a physical nexus.

Economic Nexus

Economic nexus is a bit different. It's about your economic impact in Georgia, even if you're not physically there. Here's what counts:

Sales Threshold: Sales Threshold: Starting from April 1, 2020, if your business makes over $100,000 in sales or has more than 200 separate sales transactions in Georgia within a calendar year, you’ve hit the economic nexus. This means you need to start collecting and remitting sales tax, regardless of your physical presence in the state.
Did you know logo

Groceries are taxed, but lottery tickets are not. In Georgia, dreaming big is tax-free.

Sales Tax Registration in Georgia

How to Get Your Georgia Sales Tax Permit

Let's go through the steps to get you all set up:
  1. Collect Your Info: First, make sure you have everything you need. This includes your federal employer identification number (EIN) and all the basic details about your business, like the legal name, address, and the structure of your business.
  2. Visit the Georgia Tax Center: Head to the Georgia Tax Center website. This is where you'll start the registration process. If you’re new, you’ll need to create an account, or just log in if you already have one.
  3. Sales Tax Registration: Once you're in, find the sales tax section and look for the registration option. This is where you’ll officially sign up your business for sales tax purposes.
  4. Fill Out the Form: Complete the registration form with all the required details. Be thorough and double-check everything for accuracy.
  5. Submit Your Application: After filling out the form, review it one more time to make sure it's all good. Then, submit your application.
  6. Wait for Confirmation: The Georgia Department of Revenue will review your application and then send you a confirmation with your sales tax number and other important details. Keep this info safe as it’s crucial for your business's tax activities.

Cost of Registering for a Georgia Sales Tax License

Good news - registering for a Georgia sales tax license is free!

Federal Tax ID for Georgia Sales Tax License

Yes, you will need a Federal Tax ID Number or EIN to register for a Georgia Sales Tax License. You can get this number from the IRS website, and the process is quick and free.

Other Georgia Registrations to Consider

  • Georgia Secretary of State: If you’re setting up a corporation, LLC, or partnership, you'll need to register with the Georgia Secretary of State.
  • Georgia Department of Labor: Got employees? You'll need to register with the Georgia Department of Labor for unemployment tax.
  • Local Tax Authorities: Depending on where your business is located, you might also need to register with local tax offices for any specific local taxes.

Is Georgia an Origin or Destination Sales Tax State?

What Sales are Subject to Sales Tax in Georgia?

In Georgia, most tangible personal property is taxable – things like furniture, electronics, appliances, and more. Some services, like event admissions and telecommunications, are also taxed. Keep an eye on the state tax rate of 4%, plus any additional local taxes.

Is Software as a Service (SaaS) Taxed in Georgia?

Currently, SaaS isn’t taxed in Georgia. However, there's potential legislation on the horizon that might change this, so stay informed, especially if you’re in the SaaS business.

What is Exempt from Georgiane Sales Tax?

Sales tax exemptions in Georgia include food and medicine, prescription drugs, gasoline and diesel fuel, utilities, newspapers, books, and clothing for kids under 12, among others. Always check with the Georgia Department of Revenue for the most current list of exemptions.

Who is Eligible for Georgia Sales Tax Exemptions?

Groups like nonprofits, government agencies, and certain individuals (like the elderly or disabled) might qualify for sales tax exemptions on specific purchases. If you're not sure, it's worth checking the requirements for each exemption category.

What To Do If Your Customer is Exempt from Sales Tax in Georgia?

When a customer is exempt from sales tax, make sure you get and keep a valid exemption certificate from them. This is your proof for not collecting tax on that sale. Keep these documents safe and organized – they’re important for your records.

What if You Lose a Georgia Sales Tax Exemption Certificate?

If you lose an exemption certificate, get in touch with the customer for a replacement. It’s always good to keep a record of your efforts to replace the certificate, just in case of an audit. If you can't get a new one, contact the Georgia Department of Revenue for advice.
Did you know logo

Edible gourds are exempt from sales tax. Who decides which gourds are edible and which ones aren’t?

Steps for Filing a Georgia Sales Tax Return

Handling sales tax in Georgia involves a few key steps and deadlines to ensure you're playing by the rules. Let's break it down in a simple and relaxed way.
  • Monthly Filers: If your business is new, for the first six months from your registration date, you're expected to file sales tax returns every month. This starts from the month you registered or made your first sale, whichever is earlier.
  • Quarterly Filers: After six months, if your sales tax liability averages less than $200 a month, you can shift to quarterly filings.
  • Annual Filers: If your average monthly liability is below $50, you can file just once a year.

What If a Filing Date Falls on a Weekend or Holiday?

If a filing deadline falls on a weekend or a public holiday, you get a bit of extra time. The deadline extends to the next business day, giving you a small breather to get your tax affairs in order.

How to File a Georgia Sales Tax Return

  • First, gather all your sales data and tax info.
  • Head over to the Georgia Tax Center website and log in.
  • Find the section for sales tax filing, fill out your return, and submit it.
  • If you owe taxes, make your payment through the same portal.

Penalties for Late Filing in Georgia

  • Failure to File: If you don’t file, you’re looking at a 10% penalty on the tax due, up to a max of 50%.
  • Late Filing: For late filings, it’s a 5% penalty or $5 for every 30 days late, going up to 25% max.
  • Underpayment: If you underpay, you’re hit with a 1% penalty per month, capped at 25%.
  • Interest: If you’re late in paying, there's also an interest charge of 1% per month on the overdue tax.

Sales Tax Incentives in Georgia

Discount for Early Payment

Georgia offers a sweet deal for those who pay early. You can get a 3% discount on the first $3,000 of the tax due, and 0.5% on any additional amount. To grab this discount, file and pay electronically and do it on time.

Sales Tax Holidays

Georgia hosts two sales tax holidays. One is the Back-to-School holiday in late July for school supplies and clothes. The other is the Energy Star holiday in October for energy-efficient appliances and products. These holidays let shoppers buy certain items without paying sales tax, making it a great time to save some cash.

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Top 5 Tips for Filing Sales Tax in Georgia

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