Georgia Sales Tax on Home Contractors
With summertime around the corner, a lot of our clients have been asking us about the sales tax that they need to collect from their clients. For example, a client of ours that sells kitchen cabinets might want to know if they need to collect sales tax on the merchandise that they sell to their own clients.
The issue boils down to the difference between tangible personal property and real property improvement.
Any person engaged in the business of selling cabinets, fixtures and similar custom made or stock items shall register as a dealer, collect and remit the tax on the sales price of the finished items. Charges for labor in installing such tangible personal property is not subject to the tax when billed separately to the consumer.
Any person who contracts to furnish tangible personal property and perform services under the contract by building cabinets, fixtures and similar items at the job site and incorporating the same into real property construction shall be classified as a contractor and shall pay the tax on the cost price of all tangible personal property purchased or consumed in performing a contract.
Ga. Comp. R. & Regs. R. 560-12-2-.94
Call any of our offices to discuss your sales and use tax audit.
Georgia Sales Tax on Home Contractors
