Georgia Direct Pay Permit Applications Must Be Obtained Online, Effective January 1, 2017

The Georgia Department of Revenue has reminded taxpayers that as part of an amended regulation, sales and use tax direct payment permit applications are now available through the Georgia Tax Center (GTC) website, and that direct payment permits not issued through the GTC expire on December 31, 2016. To obtain a direct payment permit that is effective on or after January 1, 2017, a taxpayer must:

• complete a direct payment permit application online through the GTC website
• have purchased more than $2 million in tangible personal property in the 12 months before application or have purchased an annual average amount exceeding $2 million in tangible personal property during the 36 months before application
• agree to waive interest on refunds of sales and use tax remitted for purchases made on or after January 1, 2017, without the payment of tax to a vendor
• make specified attestations; and
• be classified on their previous year’s federal income tax return under one of a number of specified North American Industry Classification System (NAICS) codeswhich include Wired and Wireless Telecommunication and Satellite Providers; Air, Rail and Freight Transportation Providers; Mining, Quarrying and Oil and Gas Extraction; Utilities and Manufacturing.

All permits, letters, and certificates not issued through the GTC online application process expire December 31, 2016, and cannot be used to make tax exempt purchases after that date. Direct payment permits issued through the GTC online application process are effective the later of January 1, 2017, or the issuance date.

Effective January 1, 2017, a direct payment permit holder must furnish to every vendor from which it makes tax-exempt purchases a copy of the holder’s direct payment permit, unless the holder has previously furnished the permit to that vendor and that permit is valid at the time of re-application. Effective January 1, 2017, unless a vendor has received notice of the revocation or voluntary surrendering of a direct payment permit, the vendor is relieved of the duty of collecting sales tax on all permissible transactions for which the purchaser has provided a direct payment permit, even if the permit expired before January 1, 2017. Effective January 1, 2017, the Department can revoke a direct payment permit for violation of the regulation. The amended regulation no longer states that direct payment permit holders are not required to present an additional exemption certificate. (Notice, Georgia Department of Revenue, December 2, 2016; Reg. 560-12-1-.16, Georgia Department of Revenue, effective May 26, 2016, and applicable as noted)