Since 2001, Georgia has provided a sales and use tax exemption for high-technology companies that invest at least $15 million in eligible computer equipment (including hardware and software) in a calendar year. O.C.G.A. § 48-8-3(68). During the 2021 legislative session, the Georgia General Assembly passed SB 6, which included significant changes the High-Tech Exemption. See prior coverage here.

One of the new provisions requires companies that use an exemption certificate to purchase computer equipment tax-exempt to annually report the amount of sales tax exempted to the Georgia Department of Revenue. This report is due 90 days after the end of the calendar year in which the exemption is claimed. Accordingly, reporting for 2021 exemptions is due by March 31, 2022. The Department issued Policy Bulletin SUT-2021-03 with additional information on the reporting requirement. There is no particular form or portal for this reporting, but we expect that it will be similar to the reporting requirement for the high technology data center exemption found in O.C.G.A. § 48-8-3(68.1). If any taxpayer fails to timely file this report, the Department will not issue an exemption certificate for this exemption in the subsequent calendar year. Thus, taxpayers that held an exemption certificate for 2021 that fail to timely file the report would be ineligible to receive an exemption certificate in 2023 to claim the exemption at the time of purchase (and could only claim the exemption via refund claim).

SB 6 also added a complete sunset of the exemption on June 30, 2023. As the exemption is measured by calendar year purchases, the sunset of the exemption during the middle of a calendar year is peculiar. We are hopeful that the General Assembly will revisit the sunset of the exemption, as well as the exclusion of “wireline and wireless telecommunications systems” from the exemption during the 2022 legislative session which convened January 10, 2022 and runs for 40 legislative days.

For more information regarding this exemption please contact any member of the Eversheds Sutherland State and Local tax team.