Overview of Georgia Sales Tax
In general, Georgia imposes tax on the retail sales price of tangible personal property and certain services. While most services are exempt from tax, Georgia does tax:
- The sale of accommodations
- In-state transportation of individuals (e.g., taxis, limos)
- Sales of admissions
- Charges for participation in games and amusement activities
Legal References:
O.C.G.A. §§ 48-8-2(31), 48-8-30(f)(1)
Additionally, Georgia imposes tax on charges by the seller that are necessary to complete the sale of taxable property.
Example:
If a seller charges $20 for a shirt and $5 to deliver the shirt, sales tax is imposed on $25 ($20 for the shirt plus $5 for delivery).
Legal Reference: O.C.G.A. § 48-8-2(34)(A)
Service Providers and Sales Tax
If a provider of a nontaxable service makes sales of tangible personal property, the service provider must collect and remit sales tax as appropriate.
Key Points for Service Providers:
- Service providers are, in most instances, considered end users.
- They are liable for sales or use tax on all tangible personal property used by them to provide their service.
Legal Reference: O.C.G.A. § 48-8-63
What is Use Tax?
Definition of Use Tax
Use tax is 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.
When Use Tax Applies
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.
Frequently Asked Questions
What types of services are taxed in Georgia?
Georgia generally exempts most services from sales tax. However, certain services such as accommodations, in-state transportation of individuals (e.g., taxis, limousines), admission sales, and charges for participation in games or amusement activities are taxable.
Is delivery subject to sales tax in Georgia?
Yes, if the delivery charge is necessary to complete the sale of taxable tangible personal property, it is included in the taxable amount. For example, if a shirt costs $20 and delivery is $5, sales tax applies to the full $25.
Do service providers have to pay sales tax in Georgia?
Service providers are usually considered end users of the tangible personal property they use. They must pay sales or use tax on such property and collect sales tax if they also sell tangible personal property to customers.
What is the difference between sales tax and use tax?
Sales tax is collected at the point of sale within Georgia, while use tax applies to taxable items brought into Georgia that were not taxed at the time of purchase, such as items bought out of state or online.
Are personal belongings brought into Georgia taxable?
No, personal property brought into Georgia due to a change of domicile is typically exempt from use tax, provided it is not intended for use in a trade, business, or profession.