Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Do you need to collect sales tax in Georgia?
You’ll need to collect sales tax in Georgia if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
The state sales tax rate of Georgia is 4%, but counties and cities may impose additional taxes. For example, as of December 2021, Fulton County has a 3% sales tax rate, and Atlanta has an additional 1.9% rate. Consult the Tax Jar sales tax calculator for more information on tax rates based on street address and zip code.
Do you have physical nexus in Georgia?
Georgia considers a seller to have physical nexus if you have any of the following in the state:
- An office or place of business
- An employee present
- Goods in a warehouse
- Ownership of real or personal property
- Delivery of merchandise in Georgia (specifically in the seller’s vehicle/fleet, etc.)
- Independent contractors or other representatives in Georgia
Read exactly what the Georgia Department of Revenue (Georgia’s taxing authority) has to say about what constitutes sales tax nexus in Georgia.
Do you have economic nexus in Georgia?
Effective January 1, 2020, Georgia considers vendors who make more than $100,000 in sales annually in the previous or current calendar year or more than 200 transactions in the state to have economic nexus. As a result, vendors are obligated to collect sales tax from buyers in the state. You can read Georgia’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here.
Is what you’re selling taxable?
Services in Georgia are generally not taxable.
Tangible products are taxable in Georgia, with a few exceptions. These exceptions include certain groceries, prescription medicine and medical devices, and machinery and chemicals used in research and development.
Use tax is applicable if an item was not taxed at the point-of-sale in Georgia, or if a non-exempt item was brought into the state. For further information on the use tax in Georgia, consult the Department of Revenue here.
Is SaaS taxable in Georgia?
SaaS is considered non-taxable in Georgia because it is not one of the services enumerated as taxable and is not available in tangible media. (Source)
How to get a sales tax permit in Georgia
You can register your business at the Georgia Tax Center. Just click “register your new Georgia business” to begin.
You need this information to register for a sales tax permit in Georgia:
- Business history including previous state IDs
- Entity type
- Basic info including business name, address, etc.
- Additional business ownership & relationships
- Business activity info
- Withholding information
- Additional personal identifying information for partners
There is no cost to apply for a sales tax permit in Georgia. Other business registration fees may apply. Contact each state’s individual department of revenue for more about registering your business.
How to Collect Sales Tax in Georgia
For many states, the sales tax rate you collect depends on whether you are based in-state or out-of-state.
How to Collect Sales Tax in Georgia if You are Based in Georgia
Georgia is a destination-based sales tax state. So if you live in Georgia, collect sales tax based on the sales tax rate at your buyer’s address.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator.
The Georgia sales tax rate is 4.00%
How to Collect Sales Tax in Georgia if you are Not Based in Georgia
Georgia wants sellers who made a sale into Georgia from outside the state to also charge sales tax based on the destination of the buyer.
Should you collect sales tax on shipping charges in Georgia?
The Department of Revenue had this to say on shipping taxability, “Where taxable tangible personal property is sold at retail and the seller makes a delivery charge, the charge is taxable regardless of whether the charge is optional (i.e., not required to complete the underlying sale of the tangible personal property) or separately stated.”
Therefore, you should collect tax on shipping charges if you are shipping a taxable item. it doesn’t matter if it’s separately stated or optional.
Read a full explanation of sales tax on shipping in Georgia here.
When are Returns Due?
When you file and pay Georgia sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Georgia?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Georgia, you will be required to file and remit sales tax either monthly, quarterly or annually.
Georgia sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Georgia you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Georgia
Calculating how much sales tax you should remit to the state of Georgia is easy with TaxJar’s Georgia state sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Georgia sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Georgia
You have two options for filing and paying your Georgia sales tax:
- File online File online at the Georgia Department of Revenue. You can remit your payment through their online system.
- File by mail You can use Form ST-3, and file and pay through the mail.