Wayfair Decision and Georgia Sales Tax
If you are a vendor in Georgia or doing business in Georgia online, you are probably wondering how all of this effects you. Not to bore you with tax and constitutional jargon, but it is important to know why and how none of this truly does not make any legal sense.
The short answer is Yes. Yes, you have an obligation to collect sales tax and remit it to the state of Georgia even if you have no physical presence in the state.
The formula to collect GA sales tax: You either have:
- Over 200 transactions per year with GA residents, and/or
- You have transacted over $250,000.00 worth of business with GA residents including businesses
Now that we have that out of the way, let’s talk about a case called Quill Corp. v. North Dakota and the Dormant Commerce Clause. First off, the Dormant Commerce Clause is a law that states that states could not collect sales taxes from purchases made by their residents from out of state vendors that did not have a physical presence within that state. In Quill, the Dormant Commerce Clause was upheld. In essence, businesses without a physical presence could conduct as much business as they wanted without any sales tax obligations.
However, the Wayfair decision came along and does exactly the opposite of what we have known to be law and the constitution. In Wayfair, the Court ruled 5-4 that the physical presence rule decided from Quill was “unsound and incorrect” in the current age of internet services.
Wayfair Decision and Georgia Sales Tax
The latest Bill to pass the House in Georgia is Bill 61. The most notable change is the expansion of the term “dealer” to include persons:
- obtaining more than $250,000.00 of gross revenue in the previous or current calendar year from retail sales of tangible persona property to be delivered electronically or physically to a location within GA to be used, consumed, distributed, or stored in GA, or
- conducting 200 or more separate retail sales int eh previous or current calendar year of tangible personal property to be delivered electronically or physically to location within GA for use, consumption, distribution, or storage within GA.
Note: Bill 61 states that every dealer making a retail sale of tangible personal property into GA is liable for a tax equal to the greater of 4% of the sales price or the amount of the tax actually collected by the dealer.
Another notable change is to delivery retailers. Delivery retailers must collect and GA sales tax or provide sales and use tax statements to each person purchasing $500 or more in the aggregate from the delivery retailer during the prior calendar year and file copes of the sales and use tax statements with the GDOR. They must also provide a warning to their customers to remit taxes to the GDOR.
Wayfair Decision and Georgia Sales Tax
