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School supplies (under $20 per item), clothing (not including accessories or sporting gear), and computer and computer equipment (first $1,500 of purchase) will all be included in the sales tax holiday running from July 31, 2003 through August 3, 2003. (H.B. 43, passed by the Georgia House of Representatives and Senate, April 25, 2003)


Amendments have been implemented regarding the sales and use tax exemption established for high tech companies purchasing or leasing over $15 million in computer equipment and using that equipment within the state. As of October 1, 2002 high tech companies associated with an "unqualified entity" must collect a majority of its gross revenues (50%) from unaffiliated businesses to qualify for the exemption. The fair market value of all leased equipment can be used towards the $15 million requirement during the first year of the lease. The remaining years of the lease cannot be applied towards the requirement. Also, the definition of "computer equipment" in the state of Georgia now includes "workstations connected to a farm server or main frame via high bandwidth connectivity". (Reg. Sec. 560-12-2-.107, effective September 20, 2002; HB 1441, Laws 2002, effective October 1, 2002)


The act declares an exemption for replacement or repair parts for manufacturing machinery. The amended regulation defines "replacement or repair parts" as including machinery, molds, clothing, dies and tooling used on existing machinery that is directly involved in manufacturing tangible personal property at an existing manufacturing plant. Parts that are to qualify must restore the machinery to its original condition and must be separately defined. Spare parts purchased with machinery incorporated into a new plant are not considered replacement or repair parts. The exemption applies to the portion of an item's sales price or value as follows: 20% for calendar year 2001; 40% for calendar year 2002; 60% for calendar year 2003; 80% for calendar year 2004; and 100% thereafter. Suppliers must collect the total tax on sales of repair or replacement parts unless a Certificate of Exemption is presented. (Form ST-5M)



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