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Georgia has several sales and uses taxes in addition to the regular state sales tax rate of 4 percent. The state also has jurisdictional taxes that it adds on top of the state sales and use tax rate. When determining what tax rate to charge customers, check with the Georgia Department of Revenue for taxes related to the business industry.
Types of taxes
Georgia has several taxes for various industries. Be sure to look for taxes for your industry before selling tangible personal property and services. If you overcharge for taxes, you’ll have to return the overage to the customer. And, if you undercharge, you will end up paying the tax on the sale.
Sales and use tax
Georgia’s state sales tax is 4 percent. However, your customers will rarely pay 4 percent. Most will pay more because of the jurisdictional taxes added to the state’s tax rate. The use tax is also 4 percent.
If a business purchases tangible personal property for resale and uses the property instead of selling it, the business must pay the use tax on the property. A business must pay the use tax if it purchases non-exempt tangible personal property outside of Georgia and brings that property into the state.
Additionally, if the property was used for six or fewer months outside of the state before the business buys it, the use tax is based on the purchase price. If the property is older than six months, the tax is based on the fair market value of the property. Businesses do not have to file a separate use tax return.
Short term rental tax
Georgia charges a short-term rental tax. If any stay in any hotel is less than 30 days, the business owner must charge a state hotel-motel fee of $5 per night.
The statutes define a “hotel” as a building that has five or more rooms under common ownership. Single cabins owned by the same business do not count as hotels as long as they have less than five rooms. As long as the hotel-motel fee is itemized separately, it is not subject to sales and uses tax.
Exemptions for sales of goods include:
- Rooms are rented by the federal government by check drawn on a federal government account, a credit card billed to the federal government, or a government purchase order.
- Foreign diplomats, missions and their members, and dependents of foreign diplomats.
- Any facility provides student housing as long as it has a contract with the school, and as long as the facility does not provide linen, housekeeping and other customary hotel services.
- Special care facilities, including those that provide special care for age, mental incapacity, illness, or physical incapacity.
If the room becomes an extended rental for more than 30 days, the short-term taxes and fees are not refundable.
Fireworks excise tax
If a business sells consumer fireworks in Georgia, it must pay a fireworks excise tax on the gross receipts of the sale. Gross receipts do not include taxes.
The excise tax is 5 percent of the gross receipts of all:
- Consumer fireworks,
- Wood or wire sparklers with 100 grams or less of the chemical compound,
- Snake and glow worms,
- Smoke devices,
- Nonexplosive sparkling items that are nonaerial and have less than 75 grams of chemical compound per tube,
- Trick noise-makers, including string and party poppers, drop pops, and snappers.
The fireworks excise tax is included on the sales tax return the business files online.
Motor fuel tax
Businesses that sell motor fuel for highway use must pay a sales tax based on local rates and the average retail price per gallon. The rates vary from county to county, though most are 3 percent. The rate table changes every six months on January 1 and July 1.
To figure the motor fuel tax, multiply the business’s jurisdiction tax rate by the average retail sales prices for the type of motor fuel by the number of gallons sold or used.
Georgia’s various counties and cities can add a discretionary tax percentage onto the state sales tax. Most areas charge a local sales tax rate from 3 percent to 4.9 percent for a total of 7 percent to 8.9 percent sales and use tax. Counties and cities could change their tax rates more often than the state sales tax rate; thus, you should check your local jurisdiction’s rate and other tax information frequently.
Businesses that do not have a physical presence in Georgia must collect the state’s sales and use tax at the state and local rates or notify customers that they will have to pay the use tax on products and services. Most businesses charge the tax as a convenience for the buyer.
If a business buys items from out of state with a tax exemption certificate with the intention of reselling them, the out-of-state business does not have to collect sales tax. However, if the business uses the items instead of reselling them, it must pay the use tax.
Remote sellers include marketplace sellers that do not have a physical presence in Georgia.
Registering for Georgia’s taxes
Business filers can register to pay Georgia taxes online. Registering to pay taxes also creates an account for:
- Sales and use taxes.
- Motor fuel taxes.
- Fireworks excise taxes.
You can also use this method for various other taxes and obtaining licenses, including:
- Adult entertainment tax.
- Transportation services tax.
- Obtaining an alcohol license.
- Obtaining a tobacco license.
- Paying non-prepaid 911 charges.
- Paying prepaid wireless 911 charges.
To create an account and start paying taxes, you will need:
- Federal Employer Identification Number
- Social Security Number for businesses created as sole proprietors
- Registered business name
- Business location address
- Business mailing address.
You can also add additional accounts that are related to the business once you create the initial account.
Due dates are monthly or quarterly. If a business’s tax account is due monthly, the payments are due on the 20th of the next month, unless the 20th is on a weekend or holiday, in which case, the payment and reports are due the next business day – either the 21st or the 22nd.
If taxes are due quarterly, businesses must remit reports and payments by the 20th of the month after the quarter ends. For example, the first quarter’s taxes and reports are due April 20.
Georgia tax exemptions
Georgia has several sales and uses tax exemptions. Not all are listed here. Some exemptions include:
- Sale to the State of Georgia, Federal Government, and any municipality or county in Georgia.
- Fire districts with elected governing bodies that are supported by ad valorem taxes.
- Sales to authorities are created by local law if those authorities provide public water or sewer service.
- Sales to Hospital Authorities created by Article 4 of Chapter 7 of Title 31 of the Georgia Code.
- Sales to Housing Authorities created by Article 1 of Chapter 3 of Title 8 of the Georgia Code.
- Sales to agricultural commodities commissions created and regulated by Chapter 8 of Title to of the Georgia Code.
- Sales of tangible personal property to nonprofit nursing homes, general hospitals, mental hospitals, in-patient hospice, and certain other tax-exempt organizations.
- Food and food ingredients, including prepared food sold and served to students and employees of public schools for school lunch programs.
- Sales of fuel and consumables used on ships that are engaged in intercoastal trade between Georgia ports and other US ports and foreign ports.
- Sales of water if it is delivered through water mains, pipes, or lines.
- Sales of vehicles to service-connected disabled veterans if the Department of Veterans Affairs supplies a grant to purchase and especially adapt the vehicle (usually with hand controls).
Calculating Georgia’s sales and use tax rates
Georgia makes it simple to calculate sales tax. Look up the business location and charge the tax per dollar. Georgia combines the discretionary sales and use tax rates with the state’s rates. For example, Chatham has a 7 percent rate, which includes the state’s 4 percent. Multiply the total by 0.07 then add the result to the total (10 x .07 = $0.70 for a total amount due of $10.70).
Georgia’s sales and use tax is 4 percent plus the local jurisdiction rate.
A business does not have to collect that state’s taxes, but as a courtesy, most businesses do. Warn customers that they must pay the use tax to their state.
Yes. Some states do not consider taxes submitted on the same day as timely, but Georgia does. However, we recommend filing reports and remitting payments on or before the 19th to ensure the state processes your return on time.
Yes. A business taxpayer must file a tax return, even when no taxes are due for the reporting period.
If the business’s previous calendar year tax liability is more than $60,000 for state sales tax only, the business must prepay 50 percent of the current year’s estimated tax.