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Georgia sales tax audit on food

Georgia sales tax audit on food
If your store or restaurant is being audited by the state of Georgia Department of Revenue, then, you should know a few things about cooked food, uncooked food, and grocery items. If you are in the business of selling all of three of things, then, you clearly need to separate these transactions on your sale invoices and on your cash register. Otherwise, under audit, the auditor will group all of the sales into taxable sales and then apply the sales tax to the entire gross sales of your business. Add penalties and interest to the equation and now you are looking at your entire sales tax liability bill.
Georgia does not require sales tax on food, but this exemption does not hold for any local (county, city, etc.) taxes.  Further, the exemption for “food and food ingredients” does not include prepared food, alcoholic beverages, dietary supplements, drugs, over-the-counter drugs, or tobacco.
Our audit story:
We have a client that runs a meat market and recently opened a restaurant in the back of his meat market. The food is absolutely amazing. However, the DOR is now auditing his books and records but the client did not separate his cooked food receipts from the meat market receipts. He called our office and now we are breaking down and defending his sales tax audit.
Cooked food is subject to the regular sales tax rate of the state plus that of the locality. The important thing to consider is that the state does not sway in your favor.
Sales tax is charged on purchases of goods and services, and the amount charged will vary from state to state.  Money collected in this manner is known as a consumption tax.  In retail stores, prices appearing on merchandise are typically quoted before applying a sales tax.
Georgia sales tax audit on food

Ansari Law Firm

Author Ansari Law Firm

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