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Effective January 1, 2011, Georgia will become an associate member of the Streamlined Sales and Use Tax (SST) Agreement, subject to the state’s completion of the required technology requirements by that date. Associate members are those that achieve substantial compliance with the Agreement, but not with all of its provisions. The state will become a full member only when it’s found in compliance with the Agreement and the necessary changes bringing it into compliance are in effect. Georgia’s representatives have said that the remaining changes needed for the state to be granted full membership will be introduced during the next legislative session. They are hoping to have the changes enacted and in effect by July 1, 2011. Sellers registered with SST can register with Georgia on January 1, 2011 but aren’t required to do so due to the state’s associate member status.

Under the rules of the Agreement, Georgia is required to grant an amnesty beginning January 1, 2011 until 12 months after it becomes a full member. The amnesty will apply to uncollected or unpaid sales and use tax for sellers that register to pay or collect sales or use tax on sales made to purchasers in Georgia in accordance with the Agreement’s terms. To be eligible, the seller must not have been registered in Georgia in the 12 months before the effective date of the state’s membership in the Agreement.

For an update to this information please see Georgia Becomes Full Member of Streamlined Sales and Use Tax Agreement. (Streamlined Sales Tax Governing Board Conference Call, November 1, 2010; Streamlined Sales and Use Tax Agreement, amended August 17, 2010).

(01/08/2011)

Georgia Governor Sonny Perdue recently signed legislation creating the Transportation Investment Act of 2010. The legislation allows voters in twelve new special districts to decide on a one-percent, ten year, regional sales tax for all types of transportation improvements. “Regional roundtables” are created in each special tax districts that decide on the projects to be funded. These special district transportation sales and use taxes will not apply to amounts over the first $5,000 of any motor vehicle purchase or lease, transactions to which a sales or use tax exemption applies (however, the tax will apply to sales and uses of food and beverages for off-premises human consumption), the sale or use of any type of fuel used for off-road heavy-duty equipment, off road farm or agricultural equipment, or locomotives, and several other items. The bill generally takes effect on June 2, 2010 (H.B. 277, Laws 2010, effective as noted, Press Release, Georgia Gov. Sonny Perdue, June 2, 2010).

(06/07/2010)

The State of Georgia enacted amended sales and use tax rules with respect to manufacturing equipment and machinery. The changes made include amending the definition of manufacturing to correlate with the definition of "manufacture of tangible personal property" and indicating that manufacturing begins when industrial materials are received at a plant and ends when the packaging operation is complete. The changes included amendments to the definition of repair parts and machinery clothing. These changes broaden the machinery exemption for these parts. Under the new rule, a taxpayer must have an exemption certificate to claim the broadened manufacturing and machinery exemptions. (Regulation Se. 560-12-2-.62, Effective January 1, 2009)

(12/31/2009)

The Georgia Department of Revenue has adopted a sales and use tax rule that relates to exemptions for manufacturing machinery and equipment. This new rule provides and exemption from sales tax for machinery and equipment, including repair and replacements parts, necessary and integral to the manufacture of tangible personal property in a manufacturing facility. The rule is effective December 9, 2009 and will apply to transactions that occur on or after January 1, 2009.

Under the new rule, the definition of "manufacture of tangible personal property" is amended to be used synonymously with "manufacturing" and means a manufacturing operation, series of continuous manufacturing operations, or series of integrated manufacturing operations, engaged in at a manufacturing plant or among manufacturing plants to change, process, transform, or convert industrial materials by physical or chemical means into articles of tangible personal property for sale, or further manufacturing, that have a different form, configuration, utility, composition, or character. The definition of “packaging operation” was also amended under the new rule. It is defined as bagging, boxing, crating, canning, containerizing, cutting, measuring, weighing, wrapping, labeling, palletizing, or other similar processes necessary to prepare or package manufactured products in a manner suitable for sale or delivery to customers as finished goods, or suitable for the transport of work in process within or among manufacturing plants for further manufacturing, and the movement of such finished goods or work in process to a storage or distribution area within a manufacturing plant. (Reg. Sec. 560-12-2-.62, Georgia Department of Revenue, effective and applicable as noted)

(12/10/2009)

Governor Sonny Perdue’s executive order was ratified by the General Assembly of Georgia to suspend the collection of sales and use tax on 1) prescription controlled substances and dangerous drugs distributed free of charge (prescription drug samples) on or after September 1, 2009, by pharmaceutical manufacturers or distributors to clinics, dentists, doctors, hospitals, or any person or entity located within Georgia; and 2) controlled substances and dangerous drugs distributed free of charge on or after September 1, 2008, for human clinical trials approved by an institutional review board accredited by the Association for the Accreditation of Human Research Protection Programs, effective July 1, 2009. Furthermore, the legislation amended the law to exempt sales and uses of controlled substances and dangerous drugs dispensed by prescription for the treatment of natural persons. Additional rules and regulations apply. (H.B. 59, Laws 2009)

(05/15/2009)

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