What is Georgia Use Tax?
Use tax is a tax imposed on non-exempt items brought into Georgia. “Use tax” is also a term commonly used to refer to the tax imposed on taxable goods and services that were not taxed at the point of sale.
Tax Imposed on Non-Exempt Items Brought into Georgia
Use tax is imposed upon the first instance of use, consumption, distribution, or storage in Georgia of non-exempt tangible personal property purchased at retail outside of Georgia.
Note: Property brought into Georgia as a result of a change of domicile is generally exempt as long as the property is not brought into Georgia for use in a trade, business, or profession.
Application of the Tax
- Used Less Than Six Months Outside Georgia:
If the property was used for six months or less outside of Georgia prior to its first use inside Georgia, then use tax is imposed upon the purchase price of the property at the state and local sales tax rate.
Citations:
O.C.G.A. §§ 48-8-30(c)(1), 48-8-30(e), 48-8-82(a), 48-8-102(b)(1), 48-8-109.3(b), 48-8-110.1(c), 48-8-201(b), 48-8-241(d), 48-8-269(a). - Used More Than Six Months Outside Georgia:
Property used longer than six months outside of Georgia prior to its first use inside Georgia is taxed at the state and local sales tax rate on the lesser of the purchase price or the fair market value of the property.
Citations:
O.C.G.A. §§ 48-8-30(c)(2), 48-8-82(a), 48-8-102(b)(1), 48-8-109.3(b), 48-8-110.1(c), 48-8-201(b), 48-8-241(d), 48-8-269(a).
Local Sales Tax Rates
Generally, the applicable local sales tax rate is the rate imposed in the county where the buyer receives the goods.
Citation: O.C.G.A. § 48-8-77.
A taxpayer’s use tax liability will be reduced by like taxes previously paid in another state.
Citations:
O.C.G.A. §§ 48-8-30(c)(3), 48-8-30(e), 48-8-42(a).
Example Scenario
Example:
A contractor buys a bulldozer in another state and pays state sales tax but no local sales tax. The following week, the contractor transports the bulldozer into Georgia and performs a job in Hall County.
- The contractor now owes Georgia state use tax on the purchase price of the bulldozer at a rate of 4%.
- The Georgia state use tax liability will be reduced by the sales tax previously paid in the other state.
- In addition, the contractor owes Hall County use tax on the purchase price of the bulldozer at the Hall County sales tax rate.