Georgia Expands “Dealer,” Adds Use Tax Notice Requirement

Enacted Georgia legislation expands the sales and use tax definition of “dealer” and imposes a new use tax notice requirement. The legislation is effective January 1, 2019, and applies to sales made on or after that date.

“Dealer” Expanded

“Dealer” is expanded to include those who in the previous or current calendar year from retail sales of tangible personal property (tpp):

– for electronic or physical delivery within Georgia, and

– for use, consumption, distribution, or storage in Georgia,

had:

– more than $250,000 in gross revenue, or

– conducted at least 200 separate retail sales of tpp.

To establish a collection obligation, the Georgia DOR can file a declaratory judgment action in superior court against those falling under either category. If there is a constitutional question concerning imposing taxes, the court can, upon motion, enjoin the state from enforcing the collection obligation.

Use Tax and Electronic Deliveries

Use tax liability is imposed with regard to property purchased from out-of-state delivered into Georgia electronically. It is prima facie evidence that such property is for use, consumption, distribution, or storage in Georgia if it is delivered electronically to an in-state location to the purchaser or purchaser’s agent.

Use Tax Notice Requirement

A use tax notice requirement is imposed on any “delivery retailer.” A “delivery retailer” is a non-collecting retailer who in the previous or current calendar year from retail sales of tpp:

– for electronic or physical delivery in Georgia, or

– for use, consumption, distribution, or storage in Georgia,

had:

– more than $250,000 in gross revenue, or

– conducted at least 200 separate retail sales of tpp.

A delivery retailer must collect and remit the tax or do all of the following:

– alert any potential “purchaser” immediately before the completion of a retail sale that “Sales or use tax may be due to the State of Georgia on this purchase. Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia;”

– by January 31 each year, send a sales and use tax statement to each of its purchasers who completed one or more retail sales that totaled at least $500 in the aggregate during the prior calendar year; and

– by January 31 each year, file a copy of each of the above statements with the DOR on a form prescribed by the DOR.

“Purchaser” means a person (or their agent) who gives consideration to a delivery retailer in exchange for:

– tpp for electronic or physical delivery to a Georgia location; or

– tpp used, consumed, distributed, or stored for use or consumption in Georgia.

Absent reasonable cause, delivery retailers are subject to a $10 penalty for each failure to send statements to purchasers or to file statements with the DOR.

Statements must:

– be in an envelope marked “IMPORTANT TAX DOCUMENT ENCLOSED;”

– be mailed first class mail and separate from any shipment;

– state the total amount the purchaser paid for retail sales from the delivery retailer during the previous calendar year;

– if available, list the dates of purchases, the amounts of each purchase, and the category of each purchase, including, if known by the retailer, whether the purchase is exempt; and

– include the notice: “Sales or use taxes may be due to the State of Georgia on the purchase(s) identified in this statement as Georgia taxes were not collected at the time of purchase. Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia.”

Absent reasonable cause, delivery retailers are subject to a $5 penalty per failure to include the above notice on the statement.

H.B. 61, Laws 2018, effective and applicable as noted

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AUTHOR

CCHTaxGroup

All stories by: CCHTaxGroup