In response to a request from an anonymous taxpayer, the Georgia Department of Revenue (DOR) issued a letter ruling addressing the sales tax treatment of DNA testing services in the state. The taxpayer provides customers with ancestry and health reports based on the company’s analysis of DNA obtained from saliva samples. Customers collect saliva using a kit mailed to them from a distribution center outside Georgia. Once the sample is ready, customers return the kit to the company-owned laboratory in Georgia for processing and analysis. Completed customized reports are then made available through the company’s website. The taxpayer argued that the sale should be sourced to the customer’s ship-to location, where the customer presumably uses the sample kit and accesses the results. The taxpayer also asserted that the kit’s cost is minimal compared with the cost of the service and that use of the kit is necessary to receive the service. Because the sale is sourced to the customer’s ship-to address, the taxpayer argued that Georgia use tax should not apply to their use of the kits when sales tax was paid at the time the kit was shipped to the customers.
After reviewing the taxpayer provided facts, the DOR reached a mixed result. The DNA analysis service was not subject to sales and use tax because DNA testing is not one of the services specifically taxed in Georgia. However, the sample kits are subject to sales and use tax and may be treated as separate elements of the transaction for taxability purposes. Because the taxpayer is considered the consumer of the kits, the taxpayer is responsible for Georgia use tax. For kits shipped outside Georgia, the taxpayer may claim a credit for any sales or use tax lawfully imposed by another state.
This Letter Ruling underscores the need to evaluate each component of a transaction separately for sales tax purposes and highlights the importance of strong recordkeeping. Although the primary component of the transaction—the DNA testing service—is not taxable, the sample kit is tangible personal property and therefore may be taxed separately. While the company remains liable for Georgia use tax on the kits, maintaining adequate records may allow it to claim credits for taxes paid to other states. (Letter Ruling LR SUT-2026-02, Georgia Department of Revenue, June 22, 2026)