Burr & Forman

04.6.2018   |   Articles / Publications

Burr Alert: Georgia Poised to Require Out-of-State Online Retailers to Collect Georgia Sales Tax

Friday March 30th marked the end of Georgia’s 2018 Legislative Session. For out-of-state online retailers, though, the session lasted two (2) days too long. Thursday morning, March 29th, Georgia’s House and Senate passed HB 61 and sent it to Governor Nathan Deal. Should the Governor sign the legislation (and he is expected to do so), Georgia law will require certain out-of-state online retailers to collect Georgia sales tax on transactions with Georgia consumers beginning next January. That obligation will exist even if the retailer does not have a physical presence in the state.

Pursuant to HB 61, effective January 1, 2019, out-of-state online retailers which generate gross sales exceeding $250,000 from Georgia consumers or conduct 200 or more separate retail transactions with Georgia consumers will be required to collect and remit Georgia sales tax. HB 61 alternatively allows online retailers the option of sending a “tax due” notice (the “Tax Due Notice”) to its Georgia consumers who purchased $500 or more during the year. Exactly what must be included in the Tax Due Notice is yet to be determined; the Legislature instructed the Georgia Department of Revenue (“GDOR”) to set the standards for such notices by regulation.

Georgia’s new legislation begins by adding two (2) more definitions to the provisions describing which taxpayers are to be treated as “dealers” for sales and use tax purposes. Those definitions are added to paragraph 8 of O.C.G.A. § 48-8-2 and set forth the monetary threshold (in excess of $250,000 of gross sales) and volume of transactions threshold (200 or more separate retail transactions) which will apply next January for purposes of determining when an out-of-state retailer is deemed to be a “dealer” for Georgia sales and use tax purposes. If a “dealer,” that taxpayer is required to collect and remit sales tax on transactions with customers in the state of Georgia or to notify all potential Georgia customers that: “Sales or use tax may be due to the state of Georgia on [said] purchase. [Further,] Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the state of Georgia.” This is a separate obligation from the Tax Due Notice and it is not yet clear how that communication must be accomplished; will putting it up on the website when a Georgia address is entered as either the billing or shipping address be sufficient? Will a separate email to the Georgia consumer be required, or will the GDOR impose some other form of required notification?

Download the full article, “Burr Alert: Georgia Poised to Require Out-of-State Online Retailers to Collect Georgia Sales Tax” written by Jim McCarten.

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