TAXPAYER SERVICES DIVISION
SALES & USE TAX FREQUENTLY ASKED QUESTIONS

General Information

What is nexus?

How can I obtain the sales tax rate for a particular county?

Is there a statute of limitations on refunds?

Are churches exempt from sales tax?

Can a credit union purchase tangible personal property exempt from sales and use tax?

Is the sale of tangible personal property to a private college or university subject to Georgia sales and use tax?

Is the sale of tangible property to a private school subject to sales and use tax?

Are sales to a Georgia public school subject to sales and use tax?

What is the timeframe for notification of estimated taxes?

Is a foreign visitor (non-U.S. resident) exempt from sales and use tax on purchases of tangible personal property?

Can a foreign visitor (non-U.S. resident) apply for a refund of sales tax paid on purchases made while in Georgia?

Are greens fees subject to sales tax?

Computer Software

Is canned software taxable?

Is custom software taxable?

Is a computer software license agreement taxable?

Is load and leave software taxable?

Sales & Use Tax Forms

Where can I obtain Form ST-3?

Does DOR provide assistance with completing Form ST-3?

When is Form ST-3 due?

Can I file Form ST-3 electronically?

What is the purpose of Form ST-5?

Where can I obtain Form ST-5?

Is there an approval process for filing Form ST-5?

Does Form ST-5 expire?

How can I obtain the form to request a sales tax refund?

Rentals/Leases/Property Sales

Are leases/rentals of tangible personal property taxable?

How does common ownership apply to tangible personal property and sales and use tax?

Is the rental of a cabin subject to sales tax?

Is the rental of office space subject to sales tax?

Is a charge for meeting rooms taxable?

Is the property tax charged on a lease taxable to the lessee?

Is real property taxable?

Business/Manufacturing/Sales

How do I obtain a sales tax number?

How do I apply for a FEIN?

Why are corporate officers required to provide their social security numbers when applying for an account number?

Is a non-profit organization registered with the Internal Revenue Service (IRS) as a 501(c)(3) corporation exempt from Georgia sales and use tax?

What transactions are subject to the 1% Atlanta municipal sales and use tax?

How does sales tax apply to cable boxes?

Are items taken out of resale inventory and donated to a nonprofit organization subject to sales and use tax?

Is a manufacturer’s coupon applied before or after sales tax is calculated?

Is a retail dealer’s coupon applied before or after sales tax is calculated?

When is fabrication labor on metal taxable?

Is freight taxable?

Is installation labor taxable?

Is repair labor taxable?

Is a contractor responsible for payment of sales and use tax on items used in a State or Federal Government construction contract?

Are contractors liable for payment of tax on items that are given to them?

The county just voted to raise the local tax. How does this affect a contractor?

Is a restocking fee subject to sales and use tax?

Is sales tax calculated before or after the amount allowed for a trade-in?

Is tangible personal property purchased over the Internet subject to Georgia sales and use tax?

Is the purchase of tangible personal property from a mail order catalog subject to Georgia sales and use tax?

How do I obtain an exemption for machinery used in a manufacturing facility?

Are repair parts exempt from Georgia sales and use tax when used on exempt machinery?

Do I need a temporary sales and use tax account number to sell tangible personal property at a retail miscellaneous or one-time event?

What is the legal support for point of delivery?

An Arizona company delivers tangible personal property to a Georgia company. The bill is sent to a Florida company. To which state should sales be paid?

Company B, who is not registered in Georgia, orders goods from Company A who is registered in Georgia, who will ship them to Company C in Georgia. Is Georgia tax due?

On what amount is sales tax calculated in relation to a bingo session?

How can I obtain information about agricultural machinery and equipment?

Food Tax

Does the sales tax exemption apply to food bought at a restaurant?

Does sales tax apply to purchases of food for off-premises consumption?

Does the sales tax exemption apply to businesses buying "eligible food and beverages"?

Is a restaurant responsible for sales and use tax on a meal given to an employee?

Are gratuities paid with a meal subject to sales tax?

Contractors

If I am a subcontractor that has signed a contract with a general contractor, am I still considered a contractor?

What is a general contractor requesting when they ask me for an S&UT 214-5 or S&UT 214-6?

At what time will I be considered a resident contractor if I have an established main office within this state?

Why am I required to submit sales & use tax returns if I am not selling anything?

Do I still need to submit sales and use tax returns if I don’t owe the state any money?

Why am I required to register if I only have a one time job in Georgia?

When should a general contractor withhold retainage and how much should be withheld?

When can a nonresident contractor file a blanket bond?

I am a contractor performing work for the Federal Government, am I tax exempt because this is a Federal entity?

What are use taxes and why am I required to pay use taxes?

If I perform work for a county, am I responsible for paying sales and use taxes?

General Information

Q. What is nexus?

A. Nexus means a business entity has established a direct or representational presence within a particular state or jurisdiction. This presence gives the state the right to require a company to pay or collect and remit certain taxes.

Q. How can I obtain the sales tax rate for a particular county?

A. Click here to view a list of sales tax rate by county.

Q. Is there a statute of limitations on refunds?

A. Yes. Refunds are limited to 3 years from the date payment is made to the state.

Q. Are churches exempt from sales tax?

A. No.

Q. Can a credit union purchase tangible personal property exempt from sales and use tax?

A. Yes. Federal law exempts the purchase of tangible personal property made by a Federal credit union. A state credit union is likewise exempt.

Q. Is the sale of tangible personal property to a private college or university subject to Georgia sales and use tax?

A. Sales of tangible personal property and services to be used exclusively for educational purposes by those private colleges and universities in this state whose academic credits are accepted as equivalents by the University System of Georgia, and its educational units, are exempt from the tax. A Letter of Authorization is issued by the Department to qualified institutions.

Q. Is the sale of tangible property to a private school subject to sales and use tax?

A. The exemption is limited to the sale of tangible personal property and services used exclusively for educational purposes by a bona fide private elementary and secondary school. Application is made by letter. The letter must include the following information: name and address of school, date opened, number of grades equivalent to public school, number of classrooms, number of teachers regularly employed, average number of students, number of months opened each year, and a copy of the IRS letter of determination. Letters can be faxed to (404) 417-6651. DOR issues a Letter of Authorization in lieu of a sales and use tax account number.

Q. Are sales to a Georgia public school subject to sales and use tax?

A. No. The sale of tangible personal property and services to a Georgia public school is not subject to Georgia sales and use tax. Payment must be made directly to the seller with appropriated funds and a valid Form ST-5 must be executed at the time of sale.

Q. What is the timeframe for notification of estimated taxes?

A. Notification coincides with DOR's fiscal year - 7/1-6/30 - unless the company's fiscal year is available.

Q. Is a foreign visitor (non-U.S. resident) exempt from sales and use tax on purchases of tangible personal property?

A. No. When possession and/or title occur in Georgia, sales tax is imposed on the purchase of tangible personal property regardless of the purchaser's country of residency.

Q. Can a foreign visitor (non-U.S. resident) apply for a refund of sales tax paid on purchases made while in Georgia?

A. No. When possession and/or title occur in Georgia, sales tax is imposed on the purchase of tangible personal property regardless of the purchaser's country of residency. However, if the tangible personal property is shipped by the retail dealer to the visitor's country of residence, the sale is exempt from Georgia sales tax.

Q. Are greens fees subject to sales tax?

A. Yes. A charge to play golf is considered a taxable amusement activity.

Computer Software

Q. Is canned software taxable?

A. Yes. Canned software is mass-produced pre-written software. Canned software is not designed or developed to the unique specifications of a purchaser. Only the sale or lease of canned software sold via disk or other tangible medium is subject to sales and use tax.

Q. Is custom software taxable?

A. No. Custom software is designed and developed by a person to the unique specifications of a purchaser. However, the software becomes taxable when sold to any person other than for whom it was originally designed.

Q. Is a computer software license agreement taxable?

A. Yes. It is treated as a lease.

Q. Is load and leave software taxable?

A. No. Load and leave software is installed on-site by the seller. The seller does not leave a tangible copy of the software with the purchaser.

Sales & Use Tax Forms

Q. Where can I obtain Form ST-3?

A. Click here or contact the Sales & Use Tax Unit at 404-417-6601.

Q. Does DOR provide assistance with completing Form ST-3?

A. Yes. You can obtain assistance by contacting the Sales & Use Tax Unit at 404-417-6601 or by visiting the Department of Revenue office nearest you. Click here for contact information.

Q. When is Form ST-3 due?

A. No later than the 20th day of the month following the end of the previous month.

Q. Can I file Form ST-3 electronically?

A. Yes, sales and use tax may be reported and paid electronically. You may visit our website at http://www.dor.ga.gov/busEfileEpay.aspx for information."

Q. What is the purpose of Form ST-5?

A. Form ST-5 is Georgia's reseller's exemption certificate. The form allows a retail dealer to purchase tangible personal property for purposes of resale tax exemption. The form must be completed in its entirety and presented at the time of sale to qualify as an exempt transaction.

Q. Where can I obtain Form ST-5?

A. Click here or contact the Sales & Use Tax Unit at 404-417-6601.

Q. Is there an approval process for filing Form ST-5?

A. No. The form is presented to the seller in good faith.

Q. Does Form ST-5 expire?

A. No. The form remains in effect until revoked in writing by the issuer or until there is a change in ownership.

Q. How can I obtain the form to request a sales tax refund?

A. Click here or contact the Sales & Use Tax Unit at 404-417-6601.

Rentals/Leases

Q. Are leases/rentals of tangible personal property taxable?

A. Yes, total gross proceeds are taxable.

Q. How does common ownership apply to tangible personal property and sales and use tax?

A. When an owner owns one or more companies and leases tangible personal property to a commonly owned company, Georgia sales tax is not due on the leased item if the company making the lease of the tangible personal property paid sales tax on the item at the time of purchase.

Q. Is the rental of a cabin subject to sales tax?

A. Yes. The rental of a cabin is considered accommodations and therefore subject to sales tax unless rented for 90 continuous days or more.

Q. Is the rental of office space subject to sales tax?

A. No. The rental of real property is not considered a retail sale.

Q. Is a charge for meeting rooms taxable?

A. An itemized charge for a meeting room is not subject to sales tax. If the charge is bundled together with other items, the tax would apply to the total invoice amount.

Q. Is the property tax charged on a lease taxable to the lessee?

A. Yes. It is considered a component of gross proceeds and therefore taxable.

Q. Is real property taxable?

A. No. Sales tax is imposed on tangible personal property, not real property.

Business/Manufacturing/Sales

Q. How do I obtain a sales tax number?

A. Taxpayers should complete Form CRF-002. Contact the Registration & Licensing Unit at 404-417-4490 for additional registration assistance or information.

Q. How do I apply for a FEIN?

A. A FEIN is issued by the Internal Revenue Service. The application, Form SS-4, can be downloaded from the IRS's website, www.irs.gov.

Q. Why are corporate officers required to provide their social security numbers when applying for an account number?

A. Sales and use tax is classified as a trust fund for taxes collected on behalf of the state. Therefore, corporate officers are held liable in the event of default.

Q. Is a nonprofit organization registered with the Internal Revenue Service (IRS) as a 501(c)(3) corporation exempt from Georgia sales and use tax?

A. Unless specifically exempt under Georgia law, nonprofit organizations are subject to Georgia sales and use tax. See O.C.G.A. § 48-8-3 for a list of qualifying exemptions.

Q. What transactions are subject to the 1% Atlanta municipal sales and use tax?

A. The 1% City of Atlanta municipal sales and use tax is collectable on transactions where the customer takes delivery of the item being sold or an item is used within the incorporated city limits of Atlanta. It generally applies to all sales that are subject to the 4% State Tax except motor vehicle sales. You may use the City of Atlanta's Address Locator to determine if an address is located in the incorporated City of Atlanta. For more information, contact the Atlanta Mayor’s Office at 404-330-6100 or by e-mail to rrivers@atlantaga.gov.

Q. How does sales tax apply to cable boxes?

A. If the cable company itemizes the charge for the cable box, sales tax applies to the charge. If it is bundled in with the service, the cable company is liable for use tax on the cost price.

Q. Are items taken out of resale inventory and donated to a nonprofit organization subject to sales and use tax?

A. Yes. The tax is required to be paid on the cost price of the donated item. If the item is donated by a manufacturer, the tax must be paid on the fair market value.

Q. Is a manufacturer’s coupon applied toward the total sales price before or after sales tax is calculated?

A. After. A retail dealer's acceptance of a manufacturer's coupon represents a promise by the manufacturer to compensate the dealer at a future date. Since consideration is paid in exchange for accepting the coupon and compensation by the manufacturer occurs after the sale is completed, the coupon is applied after sales tax is calculated.

Q. Is a retail dealer’s coupon applied before or after sales tax is calculated?

A. Before. A retail dealer's coupon is considered a price adjustment that occurs at the time of sale. As a result, the coupon is applied before sales tax is calculated.

Q. When is fabrication labor on metal taxable?

A. A fabrication company that fills a customer's order by fabrication metal is required to tax the fabrication labor associated with creating the metal. A real property construction contractor that fabricates and installs the metal is deemed the end consumer and generally pays sales and use tax on the metal only. Consequently, fabrication labor in this example is taxable to the contractor and not the consumer or the person who places the order with the contractor.

Q. Is freight taxable?

A. Yes. When arranged by the seller, freight is considered to be a component of a taxable transaction and therefore subject to sales tax.

Q. Is installation labor taxable?

A. When separately stated on a customer's invoice, installation labor is not taxable. If bundled together on an invoice with the sale of tangible personal property, the entire sale is subject to sales and use tax.

Q. Is repair labor taxable?

A. When separately stated on a customer's invoice, repair labor is not taxable. If repair labor is combined on an invoice with the retail sale of tangible personal property, the entire transaction/sale is subject to sales tax.

Q. Is a contractor responsible for payment of sales and use tax on items used in a State or Federal Government construction contract?

A. A contractor is responsible for the tax on all items used in a real property construction contract.

Q. Are contractors liable for payment of tax on items that are given to them?

A. A contractor is responsible for payment of the tax on any item given to them when Georgia sales tax was not paid at the time of purchase.

Q. The county just voted to raise the local tax. How does this affect a contractor?

A. Any new MARTA, Special, Education, Local Option, or Municipal Special Option Tax would not apply to construction materials sold or used as a result of a bid actually submitted in response to a bid advertisement before the election date of the new tax.

Q. Is a restocking fee subject to sales and use tax?

A. If the sale is fully refunded to the purchaser/customer, the restocking fee is not taxable.

Q. Is sales tax calculated before or after the amount allowed for a trade-in?

A. After. The tax is calculated after deducting the trade-in amount that the dealer is allowing as credit on a purchase.

Q. Is tangible personal property purchased over the Internet subject to Georgia sales and use tax?

A. Yes. Tangible personal property purchased via the Internet and delivered to a Georgia address by a vendor based in Georgia is subject to Georgia sales and use tax. Tangible personal property purchased via the Internet and delivered to a Georgia address by a non-Georgia based vendor is also subject to Georgia use tax. Taxpayers are required to report and remit use tax on Form ST-3USE. The tax rate is based on the county where delivery takes place.

Q. Is the purchase of tangible personal property from a mail order catalog subject to Georgia sales and use tax?

A. Yes. Mail order or catalog sales delivered to a Georgia address by a vendor based in Georgia are subject to Georgia sales tax. Mail order or catalog sales delivered to a Georgia address by a vendor located outside Georgia is subject to Georgia use tax. Taxpayers are required to report and remit use tax on Form ST-3USE. The tax rate is based on the county where delivery takes place.

Q. How do I obtain an exemption for machinery used in a manufacturing facility?

A. New manufacturing facilities must apply for the exemption by filing Form ST-M1. Existing manufacturing facilities may use Form ST-5M. See the Manufacturing Machinery Exemptions Guide for additional information.

Q. Are repair parts exempt from Georgia sales and use tax when used on exempt machinery?

A. Yes. The exemption is 100% phased in as of January 1, 2005. Manufacturers must retain documentation of the parts used on exempt machinery.

Q. Do I need a temporary sales and use tax account number to sell tangible personal property at a retail miscellaneous or one-time event?

A. No. File Form FS-32, Miscellaneous Events. You may also report the sale on Form ST-3, Sales and Use Tax Report, and check the "One-Time Only Sale" box. This box is located on the upper right-hand side of the form.

Q. What is the legal support for point of delivery?

A. This law defines a sale as occurring where possession, title, or both are transferred to the end consumer.

Q. An Arizona company delivers tangible personal property to a Georgia company. The bill is sent to a Florida company. To which state should sales be paid?

A. Sales and use tax is due to the state of Georgia. Sales tax is collected at the point of delivery to the end consumer.

Q. Company B, who is not registered in Georgia, orders goods from Company A who is registered in Georgia, who will ship them to Company C in Georgia. Is Georgia tax due?

A. Company B can give a resale certificate to Company A. B may give the home state certificate of exemption to A. To see a more detailed explanation go to (www.etax.dor.ga.gov or other link here).

Q. On what amount is sales tax calculated in relation to a bingo session?

A. Gross receipts. This figure represents the revenue derived from the sale of bingo cards.

Q. How can I obtain information about agricultural machinery and equipment?

A. See the Agricultural Machinery and Exemptions Guide for information.

Food Tax

Q. Does the sales tax exemption apply to food bought at a restaurant?

A. No. The purchase of food at places of accommodation, snack bars in public places, newsstands, theaters, sporting and entertainment facilities, lunch wagons, and food consumed at restaurants with seating on the premises to include parking areas, is excluded from the off-premises food consumption exemption. State and local taxes are due.

Q. Does sales tax apply to purchases of food for off-premises consumption?

"Eligible food and beverages" mean any food item found in the federal Food Stamp Act of 1977, as amended, 7 U.S.C.A. 2012 (g), as such Act existed on January 1, 1996, whether or not the food was prepared for off-premises consumption. State tax and local option taxes are not due on these transactions EXCEPT any local option tax with an effective date before October 1, 1996 (MARTA, SPLOST, LOST). The local option tax(es) under Article 2A (Homestead Local Option Tax) is exempt. The City of Atlanta municipal is collected on the sale of eligible food.

Q. Does the sales tax exemption apply to businesses buying "eligible food and beverages"?

A. No. The business can buy food tax free for resale under a certificate of exemption. Food bought for a break room is subject to state and local tax.

Q. Is a restaurant responsible for sales and use tax on a meal given to an employee?

A. Yes. The restaurant is responsible for payment of the tax on the food that is taken out of resale inventory and given to an employee.

Q. Are gratuities paid with a meal subject to sales tax?

A. If the gratuity is mandatory, the charge is taxable. If the gratuity is not mandatory, it is not taxable unless not itemized on the customer’s bill.

Contractors

Q. If I am a subcontractor that has signed a contract with a general contractor, am I still considered a contractor?

A. Yes. A person is a contractor whether he is a general contractor or a subcontractor, or whether he is a resident or a non-resident contractor.

Q. What is a general contractor requesting when they ask me for an S&UT 214-5 or S&UT 214-6?

A. The general contractor is requesting a retainage release notice that states that there are no sales and use taxes due to this state so that they can release monies withheld from the contract. This form is issued by the Department of Revenue.

Q. At what time will I be considered a resident contractor if I have an established main office within this state?

A. You are considered a resident contractor when you regularly maintain a place of business in Georgia for at least a year (must provide proof when requested). Not to be construed to mean that a post office box, site trailer, or similar temporary structure constitutes a “main office”.

Q. Why am I required to submit sales & use tax returns if I am not selling anything?

A. Per law, sales and use tax returns shall be made by general or prime contractors and by subcontractors on a monthly basis, unless otherwise authorized, for such taxes owed by each respectively.

Q. Do I still need to submit sales and use tax returns if I don’t owe the state any money?

A. Sales tax returns should be filed for all appropriate periods even though no taxes may be due. Failure to file returns as required may result in assessments against the taxpayer until such time as all delinquent returns are filed and all taxes due are paid. Release of retainage depends on submission of all appropriate tax returns.

Q. Why am I required to register if I only have a one time job in Georgia?

A. All general or prime contractors and subcontractors improving real property in the State of Georgia are required to obtain a Sales and Use Tax Certificate of Registration for the remittance of any sales and use taxes that may be due, regardless of the number of jobs they are performing.

Q. When should a general contractor withhold retainage and how much should be withheld?

A. A general contractor should only withhold retainage (2% up to 4% of the total contract amount) when a single contract with a resident contractor equals or exceeds $250,000, or when a contract with a nonresident contractor equals or exceeds $10,000. This is necessary to satisfy sales & use taxes.

Q. When can a nonresident contractor file a blanket bond?

A. Nonresident contractors engaging in multiple contracts, contingent or unit basis where the compensation to be received cannot be determined, a blanket bond may be executed in a sufficient amount, within the discretion of the Commissioner of Revenue but under no circumstances to be less than $10,000.00. Contractors so engaged must report each such contract on or by the first day of March of the subsequent calendar year and pay a fee of $10.00 for each such contract.

Q. I am a contractor performing work for the Federal Government, am I tax exempt because this is a Federal entity?

A. No. The contractor is the consumer regardless of who the real property contract is for.

Q. What are use taxes and why am I required to pay use taxes?

A. A contractor that perform services in this state and who is furnished tangible personal property for use under a contract when a sales or use tax has not been paid to this state by the person supplying the tangible personal property, shall be deemed to be the consumer of the tangible personal property so used and shall pay a use tax based on the fair market value of the tangible personal property. Persons who buy equipment in other states are liable for the payment of a use tax at the same rate and on the same basis as the sales tax, with proper credit allowed for another state’s tax.

Q. If I perform work for a county, am I responsible for paying sales and use taxes?

A. Yes. A contractor that performs work for a county is liable for sales and use taxes paid in fulfillment of the contract because Georgia treats contractors as consumers liable for taxes – even if the state or governmental entity is the actual consumer.