Georgia Enacts Economic Nexus and Reporting Requirements Legislation
Effective January 1, 2019, Georgia has enacted economic nexus and reporting requirements legislation. This is in addition to the Click-Through and Affiliate Nexus enacted in 2012. The legislation creates a bright-line nexus rule for any seller who:
- Has gross revenue exceeding $250,000 in the previous or current calendar year from sales of tangible personal property delivered electronically or physically in Georgia, or
- Makes 200 or more sales of tangible personal property delivered electronically or physically in Georgia in the previous or current calendar year.
Sellers meeting one of the above requirements are required to register to collect and remit sales tax in Georgia or comply with the following reporting requirements:
- Notify each potential purchaser immediately prior to the completion of each sale with the following statement: “Sales or use tax may be due to the State of Georgia on this purchase. Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia.”
- On or before January 31 of each year, send a sales and use tax statement to each purchaser who completed one or more retail sales that totaled $500 or more in aggregate during the prior calendar year containing the words ‘IMPORTANT TAX DOCUMENT ENCLOSED’ on the exterior of the mailing by first class mail and separate from any other shipment, and
- On or before January 31 of each year, file a copy of each purchaser sales and use tax statement with the Georgia Department of Revenue (DOR).
The sales and use tax statement must:
- Be on a form prescribed by the DOR;
- Contain the total amount paid by the purchaser during the previous calendar year, as well as, if available, the dates of purchases, the amounts of each purchase, and the category of each purchase, including, if known by the seller, whether the purchase is exempt; and
- Include the following statement: “Sales or use taxes may be due to the State of Georgia on the purchase(s) identified in this statement as Georgia taxes were not collected at the time of purchase. Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia.”
Failure to provide the notice required at the time of sale will subject the seller to a penalty of $5.00 for each failure. Failure to send a sales and use tax statement to a purchaser will subject the seller to a penalty of $10.00 for each failure. Failure to file a copy of a sales and use tax statement with the DOR will subject the seller to a penalty of $10.00 for each failure.
The legislation also states that the DOR may bring an action for a declaratory judgment in any superior court against any person it believes meets the definition of dealer provided in the legislation in order to establish that the collection obligation is applicable and valid. If such action presents a question for judicial determination related to the constitutionality of the imposition of taxes upon such a dealer, the court shall, upon motion, enjoin the state from enforcing the collection obligation against such a dealer. The superior court shall act on such declaratory judgment action and issue a final decision in an expeditious manner. (H.B. 61, effective January 1, 2019)