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In order to resolve disputes between the Georgia Department of Revenue and taxpayers, a Georgia Tax Tribunal will be established. On or after January 1, 2013, any person may petition the tribunal for relief as set forth in revenue and taxation provisions dealing with the following: the duties of the State Board of Equalization; refunds of taxes or fees determined to have been erroneously or illegally assessed and collected; appeals from any order, ruling, or finding of the state revenue commissioner to the superior court of the county of the residence of the taxpayer; an execution for the collection of any tax, fee, license, penalty, interest, or collection costs due the state; taxation of railroad equipment companies doing business in the state; the procedure for filing a claim for a refund of erroneously or illegally collected tax; the procedure for protesting the intangible recording tax; and the right of a business taxpayer to petition the state revenue commissioner, if the allocation and apportionment provisions do not fairly represent the extent of the taxpayer's business activity in the state, to allow separate accounting, to exclude any one or more of the apportionment factors, to include one or more additional factors that will fairly represent the taxpayer's business activity within the state, or to employ any other method to effectuate an equitable allocation and apportionment of the taxpayer's income. The tribunal will have jurisdiction over an action for a declaratory judgment on the validity of a rule of the state revenue commissioner that applies to taxes administered by the state revenue commissioner. Actions before the tribunal must begin by filing a petition with the tribunal and naming the state revenue commissioner as the respondent. Specific filing and response rules must be filed. The commissioner and any other respondents must file a response to the petitioner’s statement of facts and law that constitutes his or her answer with the tribunal no later than 30 days after the petition is served. If a response is not filed within the time required, the case automatically becomes in default unless the time for filing is extended by agreement of the parties for a period of up to 30 days or by the judge of the tribunal. Except in cases involving jeopardy assessments, the filing of a petition with the tribunal will operate as a stay of any enforcement or collection action by the commissioner with respect to any tax, penalty, interest, or any collection costs that are disputed in the petition until the tribunal decision is finalized. This includes appeals to the superior court or to any appellate court. The tribunal judge may lift the stay upon petition by the commissioner if good cause is shown. Within 90 days of filing a petition with the tribunal, a taxpayer can elect to give the tribunal’s small claims division jurisdiction over any proceeding with respect to which the amount of tax and penalties in controversy, excluding interest, is less than a threshold amount determined by the tribunal. A taxpayer cannot revoke the election to proceed in the small claims division after this 90 day period. The tribunal judge may on his or her own motion or on the motion of a party to the case remove a case from the small claims division for good cause. Any party may appeal a final judgment of the tribunal, except for judgments of the small claims division, to the reviewing court. Proceedings for judicial review must be instituted by filing a petition with the reviewing court within 30 days after the service of the tribunal’s final judgment or within 30 days after the decision if a rehearing is requested. (Act 609 (H.B. 100), Laws 2012, effective July 1, 2012, applicable as noted)

(08/17/2012)

Georgia has enacted legislation that decreases the withholding requirement for general and prime contractors entering into contracts with nonresident subcontractors from 4% to 2%. Effective July 1, 2012, the withholding requirement is 2% of the payments due the nonresident subcontractor in satisfaction of any sales or use tax owed to Georgia. The withholding is required when a contract between a prime or general contractor and a nonresident subcontractor involves a project of $250,000 or greater. If the prime or general contractor fails to withhold the required amount, that contractor becomes liable for any sales or use tax that the nonresident subcontractor owes to Georgia. (H.B. 932, Laws 2012, effective as noted)

(06/22/2012)

The Georgia Department of Revenue has repealed a sales and use tax rule on employees’ meals and beverages and amended sales and use tax rules on meals and food exemptions to conform with the Streamlined Sales and Use Tax (SST) Agreement, effective April 4, 2012. The rule on meals has been amended to include the phrase “food and food ingredients” as used in the SST Agreement. Employers are now liable for use tax on food and food ingredients that they provide to employees free of charge. If the exact cost of the food and food ingredients provided to an employee is not represented in the employer’s records, the cost is deemed to be 50% of the retail sales price of the food and food ingredients. The rule on food exemptions has been amended to remove references to “eligible food and beverages” and to add SST food-related definitions such as “alcoholic beverages,” “dietary supplement,” and “food and food ingredients.” As of January 1, 2011, sales of food and food ingredients to persons for consumption off premises are not subject to state sales and use tax. Rather, they are subject to local sales and use tax. Other amendments include sales and use tax exemptions for transactions such as food purchases using food stamps and sales of food to public school pupils. (Reg. §560-12-2-.34, Georgia Department of Revenue, repealed as noted; Reg. §§60-12-2-.65 and 560-12-2-.104, Georgia Department of Revenue, effective as noted)

(05/21/2012)

Georgia Governor Nathan Deal has signed legislation enacting click-through nexus provisions for remote sellers. Effective July 18, 2012, a “dealer” required to collect and remit Georgia sales tax includes any person who enters into an agreement with a Georgia resident in which the resident, for a commission or other consideration based on completed sales, refers potential customers to the person, whether by a web link, an in-person oral presentation, telemarketing, or otherwise. Cumulative gross receipts from sales by the person to Georgia customers referred to the person by all residents under this type of agreement must exceed $50,000 during the preceding 12 months in order for the person to qualify. The presumption that a person qualifies as a dealer in Georgia can be rebutted by submitting proof that the in-state residents with whom the person has an agreement did not engage in activity in Georgia that was significantly associated with the person’s ability to establish or maintain a market in the state during the preceding 12 months.

Effective October 1, 2012, a dealer required to collect and remit Georgia sales tax includes individuals who make sales of tangible personal property (TPP) or services subject to sales and use tax if a “related member” (other than a common carrier acting in its capacity as such) that has substantial nexus in Georgia sells a similar line of products as the person and does so under the same or a similar business name or uses trademarks, service marks, or trade names in Georgia that are the same or substantially similar to those used by the person. A “related member” means any person, with respect to the taxpayer during all or a portion of the tax year, that is a related person; is a component member as defined under the Internal Revenue Code; to or from whom there would be required an attribution of stock ownership under the Internal Revenue Code; or despite the form of its organization, has the same relationship to the taxpayer as a person described in the above three attributes. The presumption that a person is a “dealer” is rebuttable by showing that the person does not have a physical presence in Georgia and that any in-state activities conducted on its behalf are not significantly associated with the person’s ability to establish and maintain a market in Georgia.

Effective October 1, 2012, the definition of “dealer” is also expanded to include any person who makes sales of TPP or services that are subject to sales and use tax if any other person (other than a common carrier acting in its capacity as such) who has substantial nexus in Georgia delivers, installs, assembles, or performs maintenance services for the person’s customers in Georgia; facilitates the person’s delivery of property to customers in Georgia by allowing the person’s customers to pick up property sold by the person at an office, distribution facility, warehouse, storage place, or similar place of business maintained by the person in Georgia; or conducts any other in-state activities significantly associated with the person’s ability to establish and maintain a market in the state for the person’s sales. The presumption that a person is a “dealer” is rebuttable as per the paragraph above.

Effective October 1, 2012, the definition of “dealer” for sales and use tax purposes expressly excludes a person whose only activity in Georgia is to engage in convention and trade show activities as described in the Internal Revenue Code, so long as these activities are the dealer’s sole physical presence in Georgia and the dealer (including any representatives, agents, salespersons, canvassers, independent contractors, or solicitors) does not engage in the convention and trade show activities more than 5 days in Georgia during any 12 month period and did not derive more than $100,000 of net income from the activities in the state during the prior calendar year.

Effective October 1, 2012, the definition of “dealer” for sales and use tax purposes is amended to mean a person who maintains or utilizes an office, distribution center, salesroom or sales office, warehouse, service enterprise, or any other place of business, whether owned by that person or any other person (other than a common carrier acting in its capacity as such). Effective October 1, 2012, any verbal or written (or express or implied) ruling, agreement, or contract between a person and Georgia’s executive branch or any other state agency or department stating, agreeing, or ruling that a person is not a “dealer” required to collect Georgia sales and use tax despite the presence of a warehouse, distribution center, or fulfillment center in the state that is owned or operated by the person or a related member is null and void unless specifically approved by a majority vote of each body of the general assembly. (H.B. 386, Laws 2012, effective as noted; Press Release, Gov. Nathan Deal, April 19, 2012)

(05/21/2012)

Georgia became a full member of the Streamlined Sales and Use Tax (SST) Agreement on August 1, 2011. They had been an associate member of the Agreement since January 1, 2011. As a full member state, Georgia can now vote on amendments to or interpretations of the Agreement. They can also vote on whether a petitioning state is in compliance with the Agreement. The state is also eligible to have a representative serve on the SST Compliance Review and Interpretations Committee. Click here for more details on Georgia’s path to full SST Membership.

(Streamlined Sales Tax Governing Board Website, August 1, 2011)

(09/12/2011)

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