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)