On February 14, 2019, the Georgia House Ways and Means Committee voted in favor of House Bill 182. Effective for January 1, 2020, the bill would amend O.C.G.A. § 48-8-2(8)(M.1) to lower the sales threshold on the requirement to collect or report sales and use tax from $250,000 to $100,000 and would repeal subsection (c.2) of O.C.G.A. § 48-8-30 in its entirety to eliminate the option to provide notification to the purchaser and state in lieu of collecting and remitting tax.

O.C.G.A. § 48-8-2 currently requires out-of-state sellers to collect and remit sales tax if the seller obtains gross revenue of more than $250,000 from the retail sales of tangible personal property delivered within Georgia or if the seller conducts 200 or more separate retail sales of tangible personal property delivered within Georgia. Alternatively, O.C.G.A. § 48-8-30 currently gives retailers that reach that threshold the option to instead provide specified information and notification to the purchaser and to the Department of Revenue stating that sales or use tax may be due. House Bill 182 would remove the option for sellers to provide the required notification instead of collecting and remitting tax.

House Bill 182 adopts the same sales threshold used by the South Dakota statute at issue in South Dakota v. Wayfair, 138 S. Ct. 2080 (2018). If enacted, the legislation would be effective for sales made on or after January 1, 2020.

A Georgia marketplace bill has also been introduced, House Bill 276, that if enacted would also become effective January 1, 2020.

The Georgia Legislature has introduced its annual Internal Revenue Code (IRC) conformity bill—HB 821. Georgia conformity is typically updated annually to apply for the most recent tax year. In light of the recently enacted federal tax reform, this year’s conformity bill will receive particular attention because of what tax reform provisions Georgia chooses to adopt and not to adopt.

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The Georgia Senate Special Tax Exemption Study Committee held its initial meeting to plan evaluation of Georgia income and sales tax exemptions by December 1, 2017.

  • The special study committee was created by a Georgia Senate Resolution during the 2017 Legislative Session.
  • The Committee will prioritize exemptions to evaluate, and then recommend whether to continue, expand, reduce, or sunset each exemption.
  • The Committee scheduled dates for its next four meetings, which will take place throughout the state.

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By Chris Lutz and Andrew Appleby

In Georgia Letter Ruling SUT-2016-24, the Georgia Department of Revenue ruled that sales of software equipment delivered to a Georgia assembly facility on an out-of-state customer’s behalf were subject to Georgia sales and use tax. In the ruling, the taxpayer sold technology solutions, which were comprised of licenses of software, sales of hardware and the performance of services. The sales agreement between the parties reflected that title did not pass to the customer until payment was received in full by the seller. Nonetheless, prior to the passage of title, the seller would send the equipment to an assembly facility located in Georgia. The Department concluded that the assembly facility was accepting the equipment on the purchaser’s behalf notwithstanding the fact that unencumbered title had not yet passed to the purchaser. Because O.C.G.A. § 48-8-77(b)(1) provides that sales should be sourced to Georgia for sales tax purposes when the purchaser receives the item in Georgia, the sales were Georgia sales even where the customer was located outside the state. Georgia LR SUT-2016-24.

The Georgia General Assembly passed significant tax legislation impacting selected industries, but failed to pass a number of broader tax bills:

  • Passed legislation impacts telecommunications, film production and music production companies and causes the review of all income and sales and use tax exemptions.
  • Stalled legislation included the reduction of the individual income tax rate, remote sales tax collection, taxation of transportation companies, and the treatment of refunds for direct payment permit holders.

Taxpayers should expect any stalled legislation to be re-introduced in the next legislative session.

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The Georgia Tax Tribunal, in its first published decisions in more than a year, held that:

  • Scholastic Book Clubs has nexus in Georgia and must collect sales tax as a result of its relationship with teachers in the state; and
  • In a case affording significant deference to the Department’s regulations, a taxpayer that elects to claim one tax credit for creating jobs cannot change its election in later tax years and instead claim an alternative credit.

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By Nick Kump and Marc Simonetti

The Georgia Department of Revenue (Department) released a letter ruling stating that a taxpayer’s sales of computer software and related services were not subject to sales and use tax. The taxpayer sold bundled packages for a single price that included electronically transferred computer software with corresponding updates and upgrades, as well as professional services and technical support. The Department explained the state imposes a tax on the sale and use of tangible personal property and certain enumerated services. The taxpayer’s bundled packages were not subject to tax because the software was not tangible personal property, and the related services were not enumerated services. Ga. Letter Ruling SUT-2016-09, Ga. Dep’t of Revenue (issued March 30, 2016).

Georgia Governor Nathan Deal has signed into law several significant tax bills, affecting various Georgia tax matters, including sales and use taxes, property taxes, corporate income taxes and state tax credits, which:

  • Adjust Georgia’s statutory interest rates applicable for both assessments and refunds for all tax types, as well as create new procedural requirements for sales tax refund claims.
  • Address the calculation of both the Georgia Jobs Tax Credit and Quality Jobs Tax Credit.
  • Authorize counties to exempt inventory at e-commerce fulfillment centers under the freeport exemption and also allows the Department of Revenue greater oversight over a counties’ taxation of property.

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