| (1) |
The tax applies to sales of tickets,
fees, or charges, and voluntary contributions for admissions to places of
amusement, entertainment, exhibition, display and athletic contests, and to
charges made for participation in games and amusement activities. |
| (2) |
Admissions by free pass, which are not
subject to the Federal Admission Tax, are exempt from the sales tax. If a
service charge, donation, gratuity or any other charge is required or normally
expected for the issuance of the free admission pass, such charge, donation or
gratuity is subject to the tax. |
| (1) |
Advertising
Agencies. The tax does not apply to charges for professional services made by
an advertising agency for preparing and placing advertising in media such as
newspapers, magazines, radio, television, billboards, etc. |
| (2) |
The tax applies to purchases by an
advertising agency of tangible personal property to be used or consumed in
preparing and placing advertising in such media. For example, the tax applies
to ink, paper, paint, office supplies, art work purchased from independent
artists, engraver's charges for metal plates, electrotyper's charges for
electrotypes or matrices, tape recordings, television films and recordings,
billboard posters, etc. |
| (3) |
When an
agency goes beyond the rendition of professional services and sells tangible
personal property, it must register as a dealer in order to collect and remit
the tax on the sale of such property. Registered dealers may purchase tangible
personal property for resale by furnishing the seller with a Certificate of
Exemption. |
| (4) |
Property purchased
for resale must be billed to the person having the right of possession of such
property, the tax collected thereon and remitted to the State Revenue
Commissioner. |
| (5) |
Charges for
Advertising. The tax does not apply to charges for advertising in media such as
newspapers, magazines, radio, television and billboards. The tax applies to
purchases of tangible personal property for use or consumption in preparing,
publishing, broadcasting or displaying advertising matter, unless resold and
the sales tax thereon remitted to the State Revenue Commissioner. |
| (6) |
Persons engaged in the business of
painting signs or applying posters on a building, store front or other real
property shall pay the tax on all tangible personal property purchased for use
and consumption in preparing, maintaining, displaying and servicing such
signs. |
| (7) |
Commercial Advertising.
The tax applies to all sales at retail of tangible personal property commonly
known as commercial advertising, including but not limited to catalogs,
calendars, handbills, novelties, etc. |
| (8) |
Premiums and Gifts. The tax applies to
purchases of tangible personal property to be given away by persons in
advertising -their business or products, or given away as premiums, door
prizes, or for any other reasons. |
| (1) |
Purpose. This Rule addresses
the sales and use tax exemptions in O.C.G.A. § 48-8-3.3 for Agricultural
Production Inputs, Agricultural Machinery and Equipment, Energy Used in
Agriculture, and diesel exhaust fluid. |
| (2) |
Definitions. For purposes of
this Rule only:
| (a) |
"Agricultural Machinery
and Equipment" means:
| 1. |
Machinery and
Equipment used in Agricultural Operations, examples of which are provided in
paragraph (5); or |
| 2. |
Machinery or
Equipment expressly included in O.C.G.A. § 48-8-3.3(a)(1)(B):
| (i) |
Farm tractors and attachments to the
tractors used in Agricultural Operations; |
| (ii) |
Any off-road vehicle used in
Agricultural Operations; |
| (iii) |
Self-propelled fertilizer or chemical application Equipment sold to persons
engaged primarily in producing Agricultural Products for sale and that are used
exclusively in tilling, planting, cultivating, and harvesting Agricultural
Products; |
| (iv) |
Devices and
containers used in the transport and shipment of Agricultural
Products; |
| (v) |
Aircraft exclusively
used for spraying agricultural crops; |
| (vi) |
Pecan sprayers, pecan shakers, and other
Equipment used in harvesting pecans sold to persons engaged in the growing,
harvesting, and production of pecans; |
| (vii) |
Off-road Equipment and related
attachments that are sold to or used by persons engaged primarily in the
growing or harvesting of timber and that are used exclusively in site
preparation, planting, cultivating, or harvesting timber; |
| (viii) |
Grain bins and attachments to grain
bins that are used in Agricultural Operations regardless of whether such grain
bins or attachments become incorporated into Real Property; |
| (ix) |
Trailers used to transport Agricultural
Products; |
| (x) |
All-terrain vehicles
and multi-passenger rough-terrain vehicles that are used in Agricultural
Operations; and |
| (xi) |
Any Repair,
Replacement, or Component Parts installed on Agricultural Machinery and
Equipment. |
|
|
| (b) |
"Agricultural Operations" is used synonymously with the term "Agricultural
Purposes" and "Agricultural Uses".
| 1. |
Except
as otherwise provided in this Rule, "Agricultural Operations" means the
following activities:
| (i) |
Raising, growing,
harvesting, or storing of crops, including but not limited to soil preparation
and crop production services, such as plowing, fertilizing, seed bed
preparation, planting, cultivating, and crop protecting services; |
| (ii) |
Feeding, breeding, or managing
Livestock, equine, or poultry; |
| (iii) |
Producing or storing feed for use in
the production of Livestock, including but not limited to cattle, calves,
swine, hogs, goats, sheep, equine, and rabbits, or for use in the production of
poultry, including but not limited to chickens, hens, ratites, and
turkeys; |
| (iv) |
Producing plants,
trees, fowl, equine, or other Animals; |
| (v) |
Producing aquacultural, horticultural,
viticultural, silvicultural, grass sod, dairy, Livestock, poultry, egg, and
apiarian products; |
| (vii) |
Post-harvest
services on crops with the intent of preparing them for market or further
processing, including but not limited to crop cleaning, drying, shelling,
fumigating, curing, sorting, grading, packing, ginning, canning, pickling and
cooling. |
| (viii) |
Slaughtering
poultry and other Animals; and |
| (ix) |
Manufacturing dairy products. |
|
| 2. |
"Agricultural Operations" excludes
constructing, installing, altering, repairing, dismantling, or demolishing Real
Property structures or Fixtures, including but not limited to grain bins,
irrigation equipment, and fencing. |
|
| (c) |
"Agricultural Production Inputs" means
the following when used for Agricultural Purposes:
| 3. |
Plants grown from seed, cuttings, or
liners; |
| 6. |
Livestock and poultry feeds, drugs, and
instruments used for the administration of such drugs; |
| 7. |
Fencing products and materials regardless
of whether the fencing products or materials become incorporated into Real
Property; |
| 13. |
Plant growth regulating
chemicals; |
| 14. |
Desiccants,
including but not limited to shavings and sawdust from wood, peanut hulls,
fuller's earth, straw, and hay; |
| 15. |
Feed for Animals, including but not limited to Livestock, fish, equine, hogs,
or poultry; |
| 16. |
Sugar used as food
for honeybees kept for the commercial production of honey, beeswax, and
honeybees; |
| 17. |
Cattle, hogs, sheep,
equine, poultry, or bees when sold for breeding purposes; |
| 18. |
Ice or other refrigerants, including but
not limited to nitrogen, carbon dioxide, ammonia, and propylene glycol used in
the processing for market or the chilling of Agricultural Products in storage
facilities, rooms, compartments, or delivery trucks; |
| 19. |
Materials, containers, crates, boxes,
labels, sacks, bags, or bottles used for packaging Agricultural Products when
the product is either sold in the containers, sacks, bags, or bottles directly
to the consumer or when such use is incidental to the sale of the product for
resale; and |
| 20. |
Containers,
plastic, canvas, and other fabrics used in the care and raising of Agricultural
Products or canvas used in covering feed bins, silos, greenhouses, and other
similar storage structures. |
|
| (d) |
"Agricultural Products" means items
produced by Agricultural Operations. |
| (e) |
"Animals" is synonymous with "Livestock"
and means living organisms that are commonly regarded as farm animals,
organisms that produce tangible personal property for sale, or organisms that
are processed, manufactured, or converted into articles of tangible personal
property for sale. The term does not include living organisms that are commonly
regarded as domestic pets or companion animals. |
| (f) |
"Aquaculture" means an operation or
integrated series of operations in the growing of marine or freshwater
organisms for sale. Aquaculture involves the cultivating of aquatic populations
under controlled conditions, as contrasted with commercial fishing, where the
conditions are not controlled. |
| (g) |
"Consumable Supplies" means tangible personal property, other than Machinery,
Equipment, Agricultural Production Inputs, and energy, that is readily
disposable, or is immediately consumed or expended. |
| (h) |
"Energy Used in Agriculture" means fuels
used for Agricultural Purposes, other than fuels subject to prepaid tax as
defined in O.C.G.A. § 48-8-2. |
| (i) |
"Farm" means a parcel or tract of land or
contiguous tracts or parcels of land, or, for Aquaculture, an area of lake,
river or sea, devoted primarily to growing or raising, and actively
maintaining, plants and Animals for Agricultural Purposes. |
| (j) |
"Fixtures" means tangible personal
property that has been installed or attached to land or to any building thereon
and that is intended to remain permanently in its place. A consideration for
whether property is a Fixture is whether its removal would cause significant
damage to such property or to the Real Property to which it is attached.
Fixtures are classified as Real Property. Examples of Fixtures include but are
not limited to plumbing, lighting fixtures, slabs, and foundations. |
| (k) |
"Local Sales and Use Tax" means any sales
or use tax that is levied and imposed in an area consisting of less than the
entire state, however authorized. |
| (l) |
"Machinery" is used synonymously with
"Equipment" and means any device or apparatus other than Real Property,
Agricultural Production Inputs, energy, and Consumable Supplies. The terms
"Machinery" and "Equipment" include Repair, Replacement, or Component
Parts. |
| (m) |
"Motor Vehicle" means
any self-propelled vehicle designed for operation or required to be licensed
for operation upon the public highways. |
| (n) |
"Qualified Agricultural Producer" means a
person defined as such by the Georgia Department of Agriculture. |
| (o) |
"Real Property" means land, buildings, or
Fixtures attached to land or buildings. |
| (p) |
"Repair Part," "Replacement Part," or
"Component Part" means a part for Agricultural Machinery and Equipment. Repair,
Replacement, or Component Parts must be used to maintain, repair, restore,
install, or upgrade such Agricultural Machinery and Equipment. Examples of
Repair, Replacement, or Component Parts may include but are not limited to
oils, greases, hydraulic fluids, coolants, lubricants, and other
interchangeable tooling. |
|
| (3) |
Scope of exemptions: Activities
that are not Agricultural Operations. Except as otherwise provided in
this Rule, inputs, machinery, equipment, and energy used in the following
activities do not qualify for exemption:
| (a) |
Activities occurring after a finished product has been loaded in or on a truck
or other vehicle for transport for sale; |
| (b) |
Research and development
activities; |
| (c) |
Landscaping
activities for recreation or beautification, such as the maintenance of lawns
or golf courses; |
| (d) |
The operation
of a sales facility; |
| (e) |
Subsistence farming, hobby farming, and activities that will generate less than
$5,000.00 in sales annually; and |
| (f) |
Administrative activities, including but
not limited to sales promotion, general office work, credit and collection,
purchasing, and clerical work. |
|
| (4) |
Exemption for Agricultural
Production Inputs. Sales of Agricultural Production Inputs, as defined
in this Rule, to Qualified Agricultural Producers holding a Georgia Agriculture
Tax Exemption (GATE) Certificate issued by the Georgia Department of
Agriculture are exempt from state sales and use tax and all Local Sales and Use
Tax. |
| (5) |
Exemption for
Agricultural Machinery and Equipment. Sales (including leases) of
Agricultural Machinery and Equipment, as defined in this Rule, to Qualified
Agricultural Producers holding a GATE Certificate are exempt from state sales
and use tax and all Local Sales and Use Tax. The exemption includes Machinery
and Equipment expressly listed in O.C.G.A. § 48-8-3.3(a)(1)(B)
and Machinery and Equipment used in Agricultural Operations.
| (a) |
Machinery and Equipment used in
Agricultural Operations. Agricultural Operations can differ
significantly from one to another. Thus, when determining whether Machinery or
Equipment is used in Agricultural Operations, the Department of Revenue may
evaluate the facts and circumstances of each case.
| 1. |
Examples of Machinery or Equipment that
are not used in Agricultural Operations at any time generally include but are
not limited to:
| (ii) |
Power lines or transformers that provide
electricity to an agricultural operation; |
| (iii) |
Real Property, other than grain bins,
fencing, and irrigation equipment used in an Agricultural Operation, including
but not limited to concrete slabs and foundations, and structures or Fixtures
used for ventilation, heating, cooling, illumination, communications, plumbing,
or the personal comfort and convenience of employees; |
| (iv) |
Administrative Machinery or Equipment,
including computers, related computer peripherals, servers, copiers,
telephones, facsimile machines, office furniture, office furnishings, office
supplies such as paper and pencils, and educational materials used for
non-agricultural functions, including but not limited to sales, marketing,
research and development, accounting and payroll, and purchasing; |
| (v) |
Machinery or Equipment that is not
operated under the control of the Qualified Agricultural Producer's employees
or other persons under the Qualified Agricultural Producer's direction and
control; and |
| (vi) |
Living organisms
of any kind, including but not limited to people, Animals, and bacteria
utilized in irrigation. |
|
| 2. |
Except as otherwise provided in this Rule,
Machinery and Equipment used in Agricultural Operations generally include but
are not limited to Machinery and Equipment used:
| (i) |
In the production of poultry and eggs for
sale, including but not limited to brooder bulbs and Machinery and Equipment
used in the cleaning or maintenance of poultry houses; |
| (ii) |
In the hatching and breeding of poultry
and the breeding of Livestock and equine; |
| (iii) |
In the production, processing, and
storage of fluid milk for sale; |
| (iv) |
In the drying, ripening, cooking,
further processing, or storage of Agricultural Products; |
| (v) |
In the production of poultry, eggs, fluid
milk, equine, or Livestock for sale; |
| (vi) |
For the purpose of harvesting
Agricultural Products to be used on the Farm by that producer as feed for
poultry, equine, or Livestock; |
| (vii) |
In tilling the soil or in Animal
husbandry; |
| (viii) |
Exclusively for
irrigation of Agricultural Products, including but not limited to fruit,
vegetable, and nut crops regardless of whether the irrigation Machinery or
Equipment becomes incorporated into Real Property; |
| (ix) |
To cool Agricultural Products in storage
facilities; |
| (x) |
To produce
Aquacultural products; |
| (xi) |
To
maintain, clean, repair, restore, install, or upgrade Agricultural Machinery
and Equipment; |
| (xii) |
To provide
worker safety or to protect the quality of the Agricultural Product, including
but not limited to safety Machinery and Equipment required by federal or state
law, gloves, ear plugs, face masks, protective eyewear, hard hats or helmets,
and breathing apparatuses, regardless of whether the items would otherwise be
considered Consumable Supplies; and |
| (xiii) |
In harvesting timber, including all
off-road Equipment and related attachments used in every forestry procedure
starting with the severing of a tree from the ground until and including the
point at which the tree or its parts in any form has been loaded in the field
in or on a truck or other vehicle for transport to the place of use. Such
off-road Equipment includes but is not limited to skidders, feller bunchers,
debarkers, delimbers, chip harvesters, tub-grinders, woods cutters, chippers of
all types, loaders of all types, dozers, mid-motor graders, and the related
attachments. |
|
| 3. |
Primary
purpose. Except as otherwise provided in this Rule, an item of Machinery or
Equipment qualifies for exemption only if its primary purpose is for use in an
Agricultural Operation. "Primary purpose" means the purpose for which an item
of tangible personal property is used more than one-half of the total amount of
time that the item is in use. Alternatively, instead of time, the purpose may
be measured in terms of other applicable criteria such as the number of items
produced. The Department of Revenue may consider any reasonable methodology for
measuring the primary purpose of Machinery or Equipment for which the primary
purpose is not readily identifiable. |
|
| (b) |
Parts withdrawn from inventory.
Miscellaneous parts for which the ultimate use is unknown at the time of
purchase are eligible for the exemption as Repair, Replacement, or Component
Parts. However, use tax must be accrued and remitted if parts are withdrawn
from the inventory of parts and used for any purpose other than to maintain,
repair, restore, install, or upgrade Agricultural Machinery and
Equipment. |
|
| (6) |
Exemption for Energy Used in Agriculture. Sales of Energy Used in
Agriculture, as defined in this Rule, to Qualified Agricultural Producers
holding a GATE Certificate are exempt from state sales and use tax and all
Local Sales and Use Tax.
| (a) |
Metered energy.
In order to purchase metered Energy Used in Agriculture without the payment of
tax, the energy must be metered separately from energy used for
non-agricultural purposes. Qualified Agricultural Producers must present to
their energy providers the GATE Certificate and the account numbers and service
addresses of meters to which the exemption applies.
| 1. |
De minimis use exception. If
a single meter supplies energy for Agricultural Purposes and energy for de
minimis non-agricultural purposes, a GATE Certificate holder is permitted to
purchase all of the energy supplied from the meter without the payment of tax,
so long as that meter does not supply energy for a personal residence. De
minimis use means use that represents ten (10) percent or less of the total
amount of energy supplied by a single meter. |
|
| (b) |
Non-metered energy. Qualified
Agricultural Producers holding the GATE Certificate are permitted to purchase
non-metered energy, such as propane and wood, tax exempt. Producers, however,
must accrue and remit use tax on any portion of the energy that is not used for
Agricultural Purposes. |
| (c) |
Examples
of Energy Used in Agriculture. Energy Used in Agriculture includes but is not
limited to:
| 1. |
Off-road diesel, propane,
butane, electricity, natural gas, wood, wood products, wood by-products and
liquefied petroleum gas; |
| 2. |
Fuel
used in structures in which broilers, pullets, or other poultry are raised, in
which swine are raised, in which dairy Animals are raised or milked or where
dairy products are stored on a Farm, in which Agricultural Products are stored,
and in which plants, seedlings, nursery stock, or floral products are raised
primarily for the purpose of making sales of such plants, seedlings, nursery
stock, or floral products for resale; |
| 3. |
Fuel for the operation of an irrigation
system which is used on a Farm exclusively for the irrigation of Agricultural
Products; and |
| 4. |
Fuel used in the
drying, cooking, or further processing of raw Agricultural Products. |
|
| (d) |
Examples of energy that is not
exempt under O.C.G.A. § 48-8-3.3.
| 1. |
Energy not used for Agricultural
Purposes; |
| 2. |
Gasoline, clear
diesel, and aviation gasoline; |
| 3. |
Liquefied petroleum gas and special fuel (including compressed natural gas)
when used to propel a Motor Vehicle on the public highways; |
| 4. |
Energy used for administrative activities;
and |
| 5. |
Energy used in a personal
residence. |
|
|
| (7) |
Exemption for diesel exhaust fluid. Effective July 1, 2024, sales
of diesel exhaust fluid to Qualified Agricultural Producers for Agricultural
Uses only are exempt from state sales and use tax and all Local Sales and Use
Taxes. The exemption is available only to Qualified Agricultural Producers
holding a GATE Certificate. |
| (8) |
Certificates of exemption. Department of Revenue Agricultural
Certificate of Exemption (Form ST-Al) is not valid for purchases occurring on
or after January 1, 2013.
| (a) |
GATE
Certificate. Any person making a sale or lease of Agricultural Production
Inputs, Agricultural Machinery and Equipment, or Energy Used in Agriculture
must collect sales and use tax unless such person, in good faith, takes from
the purchaser or lessee a GATE Certificate.
| 1. |
Qualified Agricultural Producers may obtain a GATE Certificate from the Georgia
Department of Agriculture. |
| 2. |
GATE
Certificate holders must meet the requirements of this Rule to qualify for the
exemptions in O.C.G.A. § 48-8-3.3. |
| 3. |
Effective May 3, 2018, GATE card
applicants are required by O.C.G.A. § 48-8-3.3(d)(2) to
provide to the Georgia Department of Agriculture a valid state taxpayer
identification number. For out-of-state GATE applicants that are not required
to file any Georgia tax returns, "a state taxpayer identification number"
means, for purposes of this Rule only, a social security number or a federal
employer identification number (FEIN or EIN). For all other applicants, "a
state taxpayer identification number" means, for purposes of this Rule only,
the applicant's Georgia sales and use tax account number, Georgia individual
income tax account number (social security number), or Georgia corporate income
tax account number (federal employer identification number). |
|
| (b) |
Refunds. When tax is remitted
on the purchase or lease of exempt Agricultural Production Inputs, Machinery,
Equipment, or Energy Used in Agriculture, Qualified Agricultural Producers
holding a GATE Certificate may apply to the Department of Revenue for a refund
pursuant to O.C.G.A. § 48-2-35. For purchases occurring
on or after January 1, 2013, tax will not be refunded unless the purchaser held
a GATE Certificate at the time of purchase. |
|
| (9) |
Non-transferability.
Exemptions under this Rule are non-transferable. |
| (10) |
Manufacturers. Every person
defined as a "dealer" in O.C.G.A. § 48-8-2 is required to file a sales
and use tax registration for each place of business in this state. A dealer
that qualifies for manufacturing exemptions under O.C.G.A. § 48-8-3.2 and agricultural
exemptions under O.C.G.A. § 48-8-3.3 at a single place of
business may avail itself of the exemptions under either O.C.G.A. § 48-8-3.2 or O.C.G.A. § 48-8-3.3, but not both, for that
place of business in any one calendar year. |
| (11) |
Contractors.
Notwithstanding subsection (c) of O.C.G.A. § 48-8-63, contractors will not
incur any use tax on:
| (a) |
Tangible personal
property that a Qualified Agricultural Producer purchases tax-exempt under
O.C.G.A. § 48-8-3.3 and furnishes to such
contractor for use in the performance of an agricultural operation, so long as
such property retains the character of tangible personal property and is
returned to the Qualified Agricultural Producer upon the completion of the
contract; or |
| (b) |
Grain bins,
irrigation equipment, and fencing or the Repair, Replacement, or Component
Parts to grain bins, irrigation equipment, or fencing that a Qualified
Agricultural Producer purchases tax-exempt under O.C.G.A. § 48-8-3.3 for use in an
agricultural operation and furnishes to such contractor for installation into
Real Property. |
|
| (1) |
Definitions.
| (a) |
Aircraft Sales and Service Dealers--An
aircraft sales and service dealer is engaged in the business of purchasing
aircraft and related property solely for resale or rental and not for use in
providing any services such as crop dusting. Such dealers should purchase tax
free such aircraft, accessories, tires, repair parts, fuels and lubricants for
resale under certificates of exemption. Such certificates do not include
property not purchased for resale, and such property is taxable at the time of
purchase. |
| (b) |
Aircraft Service
Operations--A person engaged in an aircraft service operation is engaged in the
business of using aircraft solely in providing services for their customers.
For example, a person employing an aircraft in a crop-dusting service business
is engaged in providing services. Similarly, a person purchasing aircraft to be
used by him solely in providing transportation services for hire is engaged in
an aircraft service operation. Purchases by persons engaged in aircraft service
operations are taxable at the time of purchase unless otherwise exempt under
the Sales and Use Tax Act. |
| (c) |
Dual
Operators--Dual operators are persons engaged both in sales or leases of
aircraft and in aircraft service operation, and who cannot determine at the
time of purchase whether the property is to be resold or is to be used by him
in providing services. Such dual operators may, upon approval by the
Commissioner, purchase such property tax free under certificates of exemption.
At the time such property is allocated to full time personal use or to full
time service operations, such as crop dusting or flight training, the dual
operator must -remit the tax on the purchase or cost price, as provided in the
Act. |
| (d) |
The term "charter" is
frequently used in the industry but is of little aid in determining the taxable
nature of the "charter" operations. The term is used to cover both transactions
involving a lease or rental of the entire aircraft and transactions involving
the furnishing of transportation services. However, leases and service
transactions are not identically treated under the Act. For purposes of
ascertaining tax liability, a "charter" transaction where the aircraft operator
is employed and paid directly by the aircraft owner will be presumed to be a
transportation service transaction unless the terms of the agreement or the
surrounding circumstances indicate a lease. A "charter" transaction where the
aircraft operator is employed and paid by the customer of the aircraft owner
will be considered a lease transaction, unless the terms of the agreement or
the surrounding circumstances indicate a service transaction. |
|
| (2) |
Use by dealers or dual
operators pending sales.
| (a) |
The Act provides
that if a purchaser who purchases under a certificate of resale makes any use
of the property other than retention, demonstration or display while holding it
for resale in the regular course of business, the use is taxable. Liability is
computed by applying the tax rate to the cost of the property except where the
dealer exercises the permitted options listed below under Section (3). Unless
the dealer exercises the options permitted, the tax computed on cost price will
accrue on the first use but not on any subsequent use. In addition, receipts
from such uses and any subsequent retail sale of the aircraft may also be
taxable. For example, if an aircraft dealer makes a personal or business use of
the aircraft, the dealer becomes liable for the tax on the cost of the
aircraft. If the aircraft cost the dealer $10,000, the dealer's liability would
be $400. If there is a subsequent use, no liability would accrue on the second
use. A subsequent retail sale of the aircraft, however, would be
taxable. |
| (b) |
A use of the aircraft
in providing a service, such as transporting persons or property for hire or in
flight instruction, is a use other than retention, demonstration and
display. |
| (c) |
If a dealer in all
cases makes a charge for the demonstration to the prospective customer of the
aircraft in flight, such use will not be considered by reason of such charges a
use other than demonstration. The charges, however, will be considered taxable
to the extent that they represent a lease or transportation of persons for hire
transaction, or otherwise represent the sale of tangible personal
property. |
|
| (3) |
Options
where use is solely rental or transportation service.
| (a) |
If the sole use by a dealer of aircraft
held for sale in the regular course of business is the lease or rental of such
aircraft or the use of such aircraft in providing transportation of persons for
hire, or both, then the following rules apply:
| 1. |
Rental. If the use by a dealer of aircraft
held for sale in the regular course of business is the lease or rental of the
aircraft, then such use will result in the liability computed on the dealer's
cost price, subject to the election described below under Section (3)(b) to
compute liability on the lease charges. |
| 2. |
Transportation of persons for hire. If a
dealer uses an aircraft in the transportation of persons for hire while holding
the aircraft for sale in the regular course of business, then such use will
result in liability computed on the dealer's cost price subject to the option
under Section (3)(b) to compute liability on the service charge. |
|
| (b) |
A dealer whose sole use is
such transportation services and rental may, after April 1, 1970, elect in
computing liability for such use to include in his gross sales charges made for
such transportation of persons for hire and such lease or rental and to pay tax
thereon rather than on the cost of the aircraft. Under such election, the
dealer for each use must include all lease receipts and all charges made for
transportation whether or not the dealer must also collect a tax on such
charges from his customer. The measure of the tax on the dealer's use is not
related to the taxability of the transaction itself. Such an election shall be
made within three months after the effective date of this Regulation and shall
govern all transactions after April 1, 1970. Such election shall be irrevocable
except upon application approved by the Commissioner. The election is not
available where the use is the transportation of property for hire.
| 1. |
The rules related to the dealer's option
in computing liability for rental use apply only while the aircraft is held for
sale in the regular course of business and there is no taxable use other than
such rental or isolated transportation service. However, if a dealer withdraws
an aircraft from sales inventory to use solely in rental operations, then no
liability would be incurred subsequently if a taxable use is made of the
aircraft while holding it for rental. Liability for use in transportation
service while holding the property for rental is computed as set forth
above. |
| 2. |
The rules related to the
dealer's liability for use in the transportation of persons for hire and the
options in computing liability for such use apply only while the aircraft is
held for sale in the regular course of business and there is no taxable use
other than such service or rental of the aircraft. Use in providing
transportation service must be isolated. If it is found that the dealer has
committed an aircraft to use in providing transportation service in competition
with persons regularly engaged in such business even though the dealer intends
to sell at a future date, the dealer's liability will be computed using his
cost price irrespective of a previous election. Commitment to service will be
presumed where the dealer advertises to the public the availability of such
aircraft for transportation service. |
|
|
The American Red Cross is an exempt instrumentality of the
Federal Government and its purchases of tangible personal property are not
subject to the tax.
| (1) |
Vending Machines in General. When
tangible personal property is sold by means of a vending machine, the person
owning the property contained in the machine is the retail seller and is liable
for the tax on the total gross receipts there from without any deduction for
commissions paid to the person on whose premises the machine is
located. |
| (2) |
Musical and Amusement
Machines in General. When charges are made for the operation of a coin-operated
musical or other amusement machine such charges are taxable and the person
furnishing and servicing the machine is liable for the tax on the total gross
receipts therefrom without any deduction for commissions paid to the person on
whose premises the machine is located. |
| (3) |
Rented Machines. When a vending, musical
or amusement machine is placed in an establishment and the person operating the
establishment rents the machine and, in the case of a vending machine, owns the
articles sold through it; the operator of the establishment is the retail
dealer and is liable for the tax on the total gross receipts therefrom without
any deduction for the cost of the articles sold, the rental of the machine, or
for services performed by the renter of the machine in connection therewith.
Also in such cases the renter of the machine is liable for the tax on the gross
rent derived therefrom. |
| (4) |
Machines Under Concession. Paragraph (3) does not apply when a vending, musical
or amusement machine is placed in an establishment and the person operating the
establishment has no right of access into the machine or to the gross receipts
therein, and no right to remove such receipts without the consent or presence
of the person furnishing, stocking and servicing the machine. In such cases the
person furnishing, stocking and servicing the machine is the retail seller or
dealer and is liable for the tax on the gross receipts therefrom without any
deduction for commissions paid to the person in whose establishment the machine
is located. |
Auctioneers, agents, or factors selling tangible personal
property are liable for collection and payment of the sales tax. The tax
applies to the gross sales price of each single sale without deduction for
commissions, service charges or any other expenses.
Automobile refinishers and automobile painters are engaged
primarily in rendering personal services, and their gross receipts are not
subject to the tax. They are the consumers of the materials used in their
business and are required to pay tax on their purchases. When refinishers and
painters go beyond the rendition of services and sell tangible personal
property such as accessories, parts, seatcovers, etc., they are required to
register, collect and remit the tax on retail sales of such
items.
| (1) |
The tax applies to the retail sale of
automobiles, trucks, trailers, tractors, and other motor vehicles. The tax
applies to the sales price without any deduction for labor, freight, delivery,
manufacturer rebates, and other charges, except:
| (a) |
Allowance for another motor vehicle taken
in trade (without deduction for liens). |
| (b) |
Finance, insurance and interest charges
for deferred payments billed separately. |
| (c) |
Cash discounts provided by the selling
dealer and taken at the time of sale. |
|
| (2) |
The tax does not apply to:
| (a) |
Sales of motor vehicles to out-of-state
residents, provided delivery actually occurs in another state and is supported
by a valid Certificate of Exemption-Out Of State Delivery
(Form ST-6); or, |
| (b) |
Sales to
nonresident purchasers of motor vehicles, provided such vehicles are
immediately transported to and used in another state in which such vehicles are
required to be registered and supported by a valid Nonresident
Certificate of Exemption Purchase of Motor Vehicle (Form
ST-8). |
| (c) |
The dealer's purchase of
motor vehicles, parts, and other resale items sold by a motor vehicle dealer
when a properly executed Certificate of Exemption (Form ST-5)
is provided to the supplier or manufacturer. |
|
| (3) |
Loaner Vehicles.
| (a) |
Any dealer who withdraws a motor vehicle
from inventory for use as a loaner vehicle will be subject to use tax based
upon the daily lease value for each day the vehicle is loaned for no charge.
For purposes of this Rule, a loaner vehicle shall mean a motor vehicle
withdrawn from inventory or separately floor planned, for use by any one person
for a period of time not to exceed 30 days within a calendar year and for which
no charge is made for the use of the motor vehicle. Dealers are required to
maintain adequate records of a motor vehicle's use as a loaner vehicle. The
following table shall be used to determine the daily lease value for all loaner
vehicles. The first column represents the Manufacturer's Suggested Retail Price
(MSRP) including any dealer add-ons and mark-ups, and the second column
represents the corresponding daily lease value.
VEHICLE MSRP DAILY
(including any dealer LEASE
| (1) |
(2) |
| VEHICLE MSRP (including any dealer add-ons and
mark-ups) |
DAILY LEASE VALUE |
|
$0 - 999...
|
$ 1.64
|
|
1,000 - 1,999...
|
2.33
|
|
2,000 - 2,999...
|
3.01
|
|
3,000 - 3,999...
|
3.70
|
|
4,000 - 4,999...
|
4.38
|
|
5,000 - 5,999...
|
5.07
|
|
6,000 - 6,999...
|
5.75
|
|
7,000 - 7,999...
|
6.44
|
|
8,000 - 8,999...
|
7.12
|
|
9,000 - 9,999...
|
7.81
|
|
10,000 - 10,999...
|
8.49
|
|
11,000 - 11,999...
|
9.18
|
|
12,000 - 12,999...
|
9.86
|
|
13,000 - 13,999...
|
10.55
|
|
14,000 - 14,999...
|
11.23
|
|
15,000 - 15,999...
|
11.92
|
|
16,000 - 16,999...
|
12.60
|
|
17,000 - 17,999...
|
13.29
|
|
18,000 - 18,999...
|
13.97
|
|
19,000 - 19,999...
|
14.66
|
|
20,000 - 20,999...
|
15.34
|
|
21,000 - 21,999...
|
16.03
|
|
22,000 - 22,999...
|
16.71
|
|
23,000 - 23,999...
|
17.40
|
|
24,000 - 24,999...
|
18.08
|
|
25,000 - 25,999...
|
18.77
|
|
26,000 - 27,999...
|
19.86
|
|
28,000 - 29,999...
|
21.23
|
|
30,000 - 31,999...
|
22.60
|
|
32,000 - 33,999...
|
23.97
|
|
34,000 - 35,999...
|
25.34
|
|
36,000 - 37,999...
|
26.71
|
|
38,000 - 39,999...
|
28.08
|
|
40,000 - 41,999...
|
29.45
|
|
42,000 - 43,999...
|
30.82
|
|
44,000 - 45,999...
|
32.19
|
|
46,000 - 47,999...
|
33.56
|
|
48,000 - 49,999...
|
34.93
|
|
50,000 - 51,999...
|
36.30
|
|
52,000 - 53,999...
|
37.67
|
|
54,000 - 55,999...
|
39.04
|
|
56,000 - 57,999...
|
40.41
|
|
58,000 - 59,999...
|
41.78
|
For motor vehicles with an MSRP of greater than $59,999,
including any dealer add-ons and mark-ups, the daily lease value equals [(.25
times the MSRP of the vehicle including any dealer add-ons and mark-ups) +
$500] divided by 365.
|
| (b) |
If any single loaner vehicle is loaned to the same person for more than 30 days
within a calendar year, the dealer shall be liable for use tax based on the
cost price of the vehicle. |
| (c) |
The
subsequent sale at retail of such loaner vehicles is taxable based upon the
sales price of the loaner vehicle(s). |
|
| (4) |
When a dealer sets aside a motor vehicle
for demonstration or display purposes, the tax does not apply unless the motor
vehicle is used for more than six months. If used for more than six months, use
tax will apply based upon the cost price of the demonstration or display
vehicle.
| (a) |
The following is a non-exclusive
list of activities that are deemed to be for demonstration or display purposes:
| 1. |
The placement of motor vehicles at
shopping malls or other consumer marketplaces to promote the sale of
vehicles. |
| 2. |
The use of motor
vehicles in parades and at other public events when used to promote the sale of
vehicles. |
| 3. |
Motor vehicles used by
customers for test drives. |
| 4. |
The
assigning of motor vehicles to race tracks for display and use as an official
car or pace car, for the purpose of promoting the sale of vehicles. |
|
| (b) |
Motor vehicles used for
demonstration or display purposes may be assigned to an employee that is a bona
fide full-time employee of the dealer when such person works a minimum of
thirty-six (36) hours per week and when such motor vehicle is available for
customer test drives during the dealer's hours of operation. |
| (c) |
A dealer who withdraws a motor vehicle
from inventory for demonstration or display purposes must maintain adequate
books and records that reflect the date the motor vehicle was withdrawn from
inventory, the vehicle identification information (VIN#, stock#, etc.), the
cost price of such vehicle, the name(s) of the person or persons assigned to
the vehicle, the employee's position within the organization, the date the
demonstration or display vehicle was taken out of service, and the date the
vehicle was placed back into inventory. |
| (d) |
The subsequent sale at retail of such
demonstration or display vehicles is taxable based upon the sales price of the
motor vehicle(s). |
|
| (5) |
Motor vehicles withdrawn from inventory by a dealer for use as a shuttle or
delivery vehicle, or for personal or company use other than as a loaner
vehicle, as provided for under subparagraph (3)(a), or for demonstration or
display purposes as provided for under paragraph (4), are subject to use tax
based upon the cost price of the motor vehicle at the time the motor vehicle is
removed from inventory. |
| (6) |
Repairs
and Maintenance.
| (a) |
When parts or
accessories are installed in a motor vehicle owned by the customer, and the
charge for installation or repair labor is itemized on the dealer's invoice
separately from the charge(s) for the parts or accessories, the charge(s) for
labor are not subject to sales and use tax. If charges for labor and parts or
accessories are not itemized on the dealer's invoice, the entire amount charged
to the customer is taxable. |
| (b) |
Parts used to repair or restore a used motor vehicle to a salable condition are
not subject to sales and use tax when purchased by the dealer, since they are
purchased for resale. The tax collected at the time the used motor vehicle is
sold will include the value of parts installed. However, consumable supplies,
such as cleaners and waxes used in the reconditioning of a motor vehicle for
sale, are subject to sales and use tax. |
| (c) |
Manufacturer or Retail Dealer Warranty.
When a motor vehicle is sold at retail, a warranty from the manufacturer or
retail dealer is often included in the selling price. The warranty generally
obligates the manufacturer or retail dealer to correct defects in materials and
workmanship during a specified time frame or after such time frame in certain
instances, such as safety-related recalls, voluntary recalls, and certain
goodwill transactions. When repairs are made under such warranty, no tax is due
since a manufacturer's or retail dealer's warranty was part of the sales price
of the motor vehicle when originally sold. This is true whether the
manufacturer or retail dealer makes the repairs or whether the manufacturer or
retail dealer pays someone else to make the repairs. |
| (d) |
Extended Warranty or Maintenance
Agreement. Generally, an extended warranty or maintenance agreement is a
contract to provide repairs or maintenance for a particular item for a stated
period of time after a manufacturer's warranty has expired. The sale of an
extended warranty or maintenance agreement is not taxable provided the charge
for such warranty or maintenance agreement is itemized on the dealer's invoice
to the customer. Parts associated with repairs pursuant to such agreements are
subject to sales and use tax. The dealer is liable for use tax on the repair
parts based on the dealer's cost. However, in the event the dealer charges any
third party for the repair, the dealer must charge sales tax to the third party
as provided for under subparagraph (5)(a) of this Rule and as would apply to
any other retail sale. |
| (e) |
Repairs
Made Under Customer Loyalty, Marketing, or other Promotional Programs. Except
as provided for under subparagraph (5)(c) of this Rule, a dealer shall be
liable for use tax at cost price for any part used in a repair, when made at no
charge to the customer, under any loyalty, marketing, or other promotional
program. Examples of such programs include "free tires for life," "free oil
changes for life," and other similar dealer programs. |
| (f) |
Tools and Equipment. Tools and equipment
used in the repair of a motor vehicle are subject to sales and use tax when
purchased by the dealer. |
| (g) |
Shop
supplies. Most motor vehicle dealers that have a service or repair shop
included in their business usually maintain an inventory of "shop supplies." A
single charge for shop supplies, when separately stated on a dealer's invoice
to the customer, is subject to sales and use tax. Therefore, a dealer may
purchase these items under terms of resale through the issuance of a properly
executed Certificate of Exemption (Form ST-5). However, in the
event a dealer does not separately itemize and charge customers for shop
supplies, a dealer must pay tax on the purchase of such supplies or accrue use
tax on such items. |
|
| (7) |
The tax does not apply to sales for resale made to out-of-state dealers who
properly execute a Certificate of Exemption-Out Of State
Dealer (Form ST-4). |
| (8) |
Effective Date. This rule shall become effective twenty (20) days after the
Rule is filed in the office of the Secretary of State. |
| (1) |
Any person leasing or renting motor
vehicles in this State shall register as a dealer, collect and remit the tax on
the gross lease or rental charges, including service charges. |
| (2) |
Such dealers purchase automobiles,
trucks, trailers, repair parts, tires and accessories which become a part of
the vehicles to be leased or rented to other persons tax exempt. |
| (3) |
Such dealers are required to pay the tax
on purchases of gasoline, fuel, oil, grease, soaps, tools and other tangible
personal property used in connection with their operations. |
| (4) |
When an automobile, truck, trailer and
other tangible personal property is sold at retail, the dealer shall collect
and remit the tax on the sales price. |
| (5) |
Charges for additional insurance which is
not required by the dealer are not subject to the tax when billed separately to
the lessee. |
| (1) |
Effective December 24, 1969, all national
and state banks, and savings and loan associations are subject to the tax.
However, sales and use within the State of tangible personal property which is
the subject matter of a written contract of purchase entered into prior to
September 1, 1969 shall not be subject to the tax. |
| (2) |
The gross lease or rental charge for
tangible personal property which is the subject matter of a written lease or
rental contract entered into prior to September 1, 1969, shall not be subject
to the tax for the term of such lease or until January 1, 1972, whichever comes
first. |
| (3) |
Banks and savings and
loan associations should pay the tax to suppliers of tangible personal property
and services purchased, leased, used or consumed in their operations. However,
if a seller fails to add the tax, the purchaser must remit the amount due to
the State Revenue Commissioner. Such institutions regularly accruing sales and
use tax should make application for Certificate of Registration and regularly
file sales and use tax reports. |
| (4) |
Taxable purchases and leases include automobiles, checks, checkbooks,
silverware, savings or piggy banks, office and maintenance supplies, furniture,
equipment, advertising matter, etc., and the services described in the
Act. |
| (5) |
Retail sales of
repossessed and other tangible personal property, leases and rentals of
tangible personal property are subject to the tax. When an institution engages
in such activities, it must register as a dealer, collect and remit the
tax. |
| (6) |
When a bank or savings and
loan association purchases checks and other items for a customer and pays the
tax at the time of purchase, the subsequent sale would not be deemed a taxable
transaction. |
| (7) |
The rental of
safety deposit boxes is not subject to the tax. |
Barber and beauty shop operators are engaged primarily in
rendering personal services, and their gross receipts are not subject to sales
tax. They are the consumers of the materials used in their business and are
required to pay the tax on all their purchases. When barber and beauty shop
operators go beyond the rendition of personal services and sell tangible
personal property such as wigs, toupees, tonics, etc., they are required to
register, collect and remit the tax on such sales.
| (1) |
Persons or organizations sponsoring
bazaars, school carnivals and other such amusement activities, whether
charitable, eleemosynary, fraternal, or not, are liable for the collection and
payment of the tax on sales of tickets, fees or charges for admission, and
voluntary contributions made in lieu of such admission charges. |
| (2) |
Additionally, such persons are liable for
the tax on charges for participation in games, amusement activities and sales
of tangible personal property, notwithstanding the property sold may have been
donated by individuals or business establishments. |
| (3) |
Persons or organizations not regularly
engaged in sponsoring bazaars or carnivals are required to file Sales Tax
Returns immediately following the close of each activity. |
The tax applies to charges for bindery work as fabrication.
However, the tax does not apply to the following service transactions:
| (a) |
Folding, when the customer provides the
complete job to be folded, |
| (b) |
Trimming and paper cutting, when the customer provides the complete job to be
trimmed or cut, |
| (c) |
Application of
stickers to paper envelopes, when the customer provides stickers and the items
to which they are to be applied. |
| (1) |
Sales of books to a rental library for
rental to its customers are sales for resale not subject to the tax. |
| (2) |
Persons engaged in the business of
renting or selling books are required to register as dealers, collect and remit
the tax on charges made for such rentals or sales. |
| (1) |
The tax applies to each charge for
participation in bowling games and must be collected and remitted by the
operator. No deduction for rental charges paid to lessors of pin spotters will
be allowed in computing the taxable charge for participation in the games.
Bowling balls, shoes, and other equipment purchased for resale may be purchased
under Certificates of Resale. The tax applies to sales at retail and rentals of
such property and must be collected and remitted by the operator. |
| (2) |
Operators of bowling alleys are required
to pay the tax on purchases and rentals of equipment and supplies, including
automatic pin spotters, used in the operations of the business. |
| (1) |
Radio,
Television and Cable Broadcasters or Distributors are primarily engaged in the
business of broadcasting or distributing radio or television signals over the
free airwaves or by satellite or cable. These activities constitute a service
that is not subject to sales and use tax. Such broadcasters and distributors
are subject to sales and use tax on all purchases or leases unless otherwise
exempt within the Act and this Regulation. |
| (2) |
Definitions. For purposes of qualifying
for the exemption provided for by O.C.G.A. § 48-8-3(74), and
as used in this Regulation, the following definitions and explanation of terms
shall apply.
| (a) |
The term "cable distributor"
means any entity or enterprise, public or commercial, primarily engaged in
providing broadcast programming over a cable system for purchase by subscribers
or customers. Such entity delivers visual, aural, and textual programming
received from cable networks, federally licensed commercial or public radio or
television stations to consumers via a cable system or a direct-to-home
satellite system on a subscription or fee basis. |
| (b) |
The term "cable network" means any entity
or enterprise, public or commercial, primarily engaged in operating studios and
facilities for the broadcasting of programs on a subscription or fee basis.
These companies produce programming in their facilities or acquire programming
from other sources that are usually delivered to a third party for cable or
satellite transmission to viewers. |
| (c) |
The term "digital broadcast equipment"
means, equipment purchased, leased, or used for the origination or integration
of program materials for broadcast over the airwaves or transmission by cable,
satellite, or fiber optic line which uses or produces an electronic signal
where the signal carries data generated, stored, and processed as strings of
binary data. Data transmitted or stored as digital data consists of strings of
positive or nonpositive elements of a transmission expressed in strings of 0's
and 1's which a computer or processor can reconstruct as an electronic
signal. |
| (d) |
The term "diskettes"
means any blank recordable digital audio storage media used to record digital
signals in the broadcast operations. |
| (e) |
The term "federally licensed commercial
or public radio or television station" means any entity or enterprise, either
commercial or noncommercial, which operates under a license granted by the
Federal Communications Commission for the purposes of free distribution of
audio and video services when the distribution occurs by means of transmission
over the public airwaves. |
|
| (3) |
Purchases. Except as provided for in
paragraph (4) the tax applies to all equipment, and other tangible personal
property purchased, leased, or rented for use in producing and broadcasting
radio, television and cable signals. Such purchases or leases include but are
not limited to recordings, costumes, make-up materials, lumber, and other
materials used in construction of stage property and scenery, transistors,
condensers, transformers, tubes for lighting control, slides, and other
non-digital broadcast equipment. |
| (4) |
Digital Broadcast Equipment Exemption.
| (a) |
In accordance with O.C.G.A. § 48-8-3(74),
transactions occurring on or after July 1, 2001, which involve the purchase or
lease of digital broadcasting equipment, not otherwise exempt under Chapter 8
of Title 48 of the Official Code of Georgia Annotated, will be exempt from
sales and use tax up to the specific purchase or lease dates as provided for in
this Regulation. |
| (b) |
Purchases or
leases made by a federally licensed commercial or public radio broadcaster on
or after July 1, 2001 through the last date of analog transmission or November
1, 2008, whichever occurs first, shall be exempt from the tax upon the issuance
of the Certificate of Exemption. |
| (c) |
Purchases or leases made by a federally
licensed commercial or public television, or cable distributor or cable network
on or after July 1, 2001 through the last date of analog transmission or
November 1, 2004, whichever occurs first, shall be exempt from the tax upon the
issuance of the Certificate of Exemption. |
| (d) |
General Requirements for the
Digital Broadcasting Equipment Exemption. In order to qualify for the
digital broadcast equipment exemption provided for in O.C.G.A. § 48-8-3(74) and
this Regulation, the following conditions must be met:
| 1. |
The qualified purchasers or lessees of
such digital broadcast equipment must obtain a Certificate of Exemption from
the commissioner as provided in paragraph (4)(e) of this Regulation. The
application for such Certificate must contain a schedule of planned purchases
or leases of qualified equipment for which the application is filed. |
| 2. |
The equipment must be purchased or leased
exclusively for installation and operational use in this State by a qualified
entity or enterprise as designated in O.C.G.A. § 48-8-3(74). |
| 3. |
The exemption is limited to the original
purchase or lease of such eligible digital broadcast equipment and shall not
extend to digital equipment purchased or leased to replace equipment previously
extended exemption. |
|
| (e) |
Application and Certificate of Exemption.
| 1. |
Any purchasers or lessees desiring to
secure the benefits of the exemption provided by O.C.G.A. § 48-8-3(74) must
file an Application for Certificate of Exemption (Form ST-BE1). The application
shall include the business name, address, physical location, anticipated dates
of purchase or lease, and a schedule of the anticipated digital broadcast
equipment to be purchased or leased including sales price, manufacturer,
supplier, and a description of the digital equipment's function. In addition
thereto, the commissioner may require such other information as deemed
necessary for the determination of the claim for exemption. This requirement is
also applicable to holders of direct payment permits granted under Regulation
. |
| 2. |
Upon approval of an application, the
commissioner will issue a Certificate of Exemption (Form ST-BE2) for
presentation by the purchaser or lessee to the equipment suppliers, whereupon
the purchaser or lessee shall be relieved from the payment of the tax and the
equipment suppliers shall be relieved from the collection of the tax. |
| 3. |
Where the Certificate of Exemption (Form
ST-BE2) has not previously been obtained and tax is collected or accrued on the
purchase or lease of digital broadcast equipment which may qualify for
exemption, the purchaser or lessee may apply for a refund of such tax. The
Claim for Refund (Form ST-12) shall be accompanied by an Application for
Exemption (Form ST-BE1) and any other documentation deemed necessary by the
commissioner. |
|
| (f) |
Specific Applications; Exemptions and Exceptions Relating Thereto.
| 1. |
For the purposes of federally
licensed commercial or public television broadcasters and cable distributors,
the term digital broad- cast equipment shall be limited to antennas,
transmission lines, towers, digital transmitters, studio to transmitter links,
digital routing switches, character generators, Advanced Television Systems
Committee video encoders and multiplexers, monitoring facilities, cameras,
terminal equipment, tape recorders, and file servers. |
| 2. |
For the purposes of federally licensed
commercial or public radio broadcasters, the term digital broadcast equipment
shall be limited to transmitters, digital audio processors and
diskettes. |
| 3. |
For the purposes of
cable networks, the exemption will apply to all digital broadcast equipment as
defined in paragraph (2)(c) of this Regulation. |
| 4. |
If, after obtaining the Certificate of
Exemption required under paragraph (4)(e) of this Regulation, the actual
purchase(s) or lease(s) fails to meet the requirements of this exemption, the
purchaser or lessee will be liable for tax and, if applicable, penalty and
interest on the purchase(s) or lease(s). |
| 5. |
In cases where equipment has multiple uses
(digital and analog), the taxability or exemption will be determined by the
equipment's use. The equipment's use must meet the following requirements in
order to be eligible for the exemption:
| (i) |
The equipment must use a digital signal; and |
| (ii) |
The equipment is used as an essential
part of a process to originate or integrate a digital signal for transmission
or broadcast.
| (I) |
The equipment's use
requirements as set forth under paragraph (4)(f)5. may be illustrated through
the following examples:
| I. |
A piece of
equipment used to convert analog signals to digital would qualify for the
exemption. |
| II. |
A piece of equipment
that uses a digital signal but that is not used as part of a process that
originates or integrates a digital signal for transmission or broadcast would
not qualify for the exemption. |
| III. |
A piece of equipment that converts a digital signal to analog as part of a
process that originates or integrates a digital signal for transmission or
broadcast purposes would qualify. |
| IV. |
An antenna used to simulcast broadcast
digital and analog signals would qualify for the exemption when purchased or
leased with the ultimate purpose of exclusively broadcasting digital
signals. |
|
|
|
| 6. |
The exemption provided for under O.C.G.A.
§ 48-8-3(74) shall
only extend to the original purchase or lease of eligible digital broadcast
equipment and shall not extend to the replacement of such equipment or to the
repair or upgrading of the equipment. |
| 7. |
For the purposes of determining whether
diskettes are original or replacement purchases for radio broadcasters and
cable networks, it shall be presumed that diskettes purchased twelve months
after the date of the first application for exemption are
replacements. |
| 8. |
The exemption
provided for under O.C.G.A. § 48-8-3(74) shall
not extend to any person who contracts to furnish tangible personal property
and perform services under a real property contract. Contractors are deemed to
be the consumer of all tangible personal property used in a real property
contract and shall pay the tax at the time of purchase. |
| 9. |
Examples of items that do not qualify for
the exemption include, but are not limited to, real property improvements,
lighting equipment, power supplies, analog broadcast equipment, diskettes or
video tapes containing audio or video recordings purchased for broadcast,
converter boxes, repairs to equipment, replacement of digital broadcast
equipment where the exemption has previously been granted or the replacement of
any other equipment and spare equipment. |
|
|
| (5) |
Sales.
| (a) |
Charges for services rendered by radio,
television broadcasters and cable network or cable distributors, including
advertising, line charges, talent fees or other such charges are not subject to
the tax. |
| (b) |
The sale or rental of
prerecorded video tape or motion picture film by federally licensed radio and
television broadcasters or cable network or distributors for broadcast would be
subject to the tax unless purchased or leased by a dealer charging admission to
view the production. |
| (c) |
Video tape
or motion picture film recorded onto a radio or television broadcaster's or
cable network's or distributor's own tapes, reels, or other storage medium at
its own premises for later broadcast shall not be considered the sale or rental
of video tape or motion picture film. |
| (d) |
A transaction which involves only a
charge for a copyright license and does not involve a sale, lease, or rental of
video tape or motion picture film would not be considered taxable. |
| (e) |
The sale of cable broadcasting through a
cable distributor through a subscription or fee basis is not considered a
taxable transaction. The lease or rental of a converter box or other tangible
personal property to a cable subscriber is considered a taxable
transaction. |
| (f) |
If a television or
radio broadcasting station, cable distributor or cable network makes retail
sales of tangible personal property, the tax must be collected and remitted on
such sales to the commissioner. |
|
Operators of summer camps, including Scout, Y.M.C.A., Church
and School camps, are consumers of all tangible personal property used in their
operations and their purchases are subject to the tax. Fees charged for
attendance are not taxable.
| (1) |
Common carriers
purchasing tangible personal property which comes within the exemption
authorized by Section
48-8-3(33)(A) of
the Act, as amended, must register the file Sales and Use Tax Reports as
required under these Regulations. |
| (2) |
A common carrier must furnish each
suppliers of exempt tangible personal property with a Certificate of Exemption
(Form ST-5, as revised). |
| (3) |
The
tax does not apply to aircraft, watercraft, railroad locomotives and rolling
stock, motor vehicles, and major components of each, which will be used
principally to cross the borders of the State of Georgia in the service of
transporting passengers or cargo by common carriers in interstate or foreign
commerce under authority granted by the Federal Government, or to replacement
parts installed by such carriers in such aircraft, watercraft, railroad
locomotives and rolling stock and motor vehicles which becomes an integral part
thereof. |
| (4) |
The tax applies to
aircraft, watercraft, railroad locomotives and rolling stock, motor vehicles
and components of each and replacement parts installed by common carriers in
such craft, locomotives, rolling stock and motor vehicles which will not be
used principally to cross the borders of the State of Georgia in transporting
passengers or cargo in interstate or foreign commerce under authority granted
by the Federal Government. |
| (5) |
Common carriers operating craft or vehicles, some of which qualify for
exemption and some of which are subject to the tax, may purchase major
components and replacement parts for inventory under a Certificate of
Exemption, Form ST-5. When such components or parts are withdrawn from
inventory and first applied to taxable vehicles, the cost price thereof must be
included in the carrier's Sales and Use Tax Report. |
| (6) |
Contract, private and other carriers must
pay the tax on all tangible personal property used or consumed in their
operations, irrespective of the fact that its craft or vehicles may cross the
borders of the State of Georgia. |
| (7) |
Carriers, including common carriers,
shall pay the tax on all fuels purchased and delivered in this State and all
fuels purchased outside this State and stored in this State irrespective, in
either case, of the place of subsequent use. |
| (8) |
The tax applies to purchases for use,
consumption or storage within this State of tangible personal property used in
constructing, repairing or maintaining permanent structures, including, but not
limited to garages, repair shops, hangers, railroad bridges, railroad tracks,
landing and communication equipment, tools and equipment, handling equipment
and other tangible personal property not specifically exempt under paragraph
three (3) of this regulation. |
| (9) |
The tax applies to charges for the transportation of persons between two points
in Georgia. Such tax must be collected and remitted by the carrier. The tax
does not apply to charges for transportation of persons between a point in
Georgia and a point in another state. |
| (10) |
As set out in this section, the tax
applies to meals, snacks, and all other food and beverage items which are
purchased by a carrier or which are sold, dispensed or otherwise provided,
during or in conjunction with a transportation service, to passengers
purchasing transportation services.
| (a) |
Carriers that provide complimentary meals, snacks, or other food or beverage
items to passengers incidental to the primary service of transportation are the
consumers of such items and shall pay the tax to the carrier's suppliers of all
such items which are purchased by or delivered to the carrier's suppliers of
all such items which are purchased by or delivered to the carrier in Georgia,
regardless of where the meals, snacks, or other food or beverage items are
served. Meals, snacks, and other food and beverage items provided to passengers
by carriers are considered to be complimentary and are taxable under this
paragraph when:
| 1. |
No separately stated charge
for such items is made to the passenger in addition to the charge for the
transportation, or when: |
| 2. |
It is
the carriers' normal business practice not to reduce the price of the
transportation for passengers electing not to have food and beverage
service. |
|
| (b) |
Carriers
that sell meals, snacks, or other food or beverage items to passengers, and the
charge for such items is collected with the ticket price for transportation,
shall collect and remit the tax on the charge for the meals, snacks, or other
food or beverage items, on all sales of such tickets which occur in Georgia and
regardless of where the meals, snacks, or other food or beverage items are
served. |
| (c) |
Carriers that sell
meals, snacks, or other food or beverage items to passengers, and the charge
for such items is collected from the passenger at the time the food or beverage
item is served to the passenger, shall collect and remit the tax on the sales
price of all such items sold or served in Georgia, on trips or flights either
arriving in or departing from the State of Georgia. When not otherwise
reasonably determinable, the portion of such items which are sold or served in
Georgia shall be determined by the ratio of miles traveled in Georgia during
such trips or flights, to the total number of miles (both within and without
the State of Georgia) traveled by the carrier during such trips or flights,
multiplied by the carrier's total sales receipts for all such items sold (both
within and without the State of Georgia) during such trips or flights.
|
|
| (1) |
Purpose. This Rule only
addresses sales of tangible personal property used for and in the construction
of a Competitive Project of Regional Significance. |
| (2) |
Definitions. For purposes of
this Rule only,
| (a) |
"Competitive Project of
Regional Significance" (hereinafter "Project") means the location or expansion
of some or all of a business enterprise's operations in Georgia where the
commissioner of economic development determines that the Project would have a
significant regional impact. |
| (b) |
"Energy" means natural or artificial gas, oil, gasoline, electricity, solid
fuel, wood, waste, ice, steam, water, and other materials necessary and
integral for heat, light, power, refrigeration, climate control, processing, or
any other use in any phase of the manufacture of tangible personal
property. |
|
| (3) |
Construction exemption. To qualify for exemption, property must be:
| (a) |
used exclusively for and in the
construction of a Project; and |
| (b) |
purchased prior to completion of the construction of the
Project. |
|
| (4) |
Property
used exclusively for and in the construction of a Project.
| (a) |
Property used exclusively for and in the
construction of a Project excludes:
| 1. |
Property brought onto the construction site, but not used in furtherance of the
completion of a Project, such as a wrench used only to repair a worker's
personal vehicle or nails that remain in the original store
packaging; |
| 2. |
Property used for
administrative activities on the construction site, such as sales promotion,
general office work, credit and collection, purchasing, and clerical
work; |
| 3. |
Power lines or
transformers that bring electricity into the construction site; |
| 4. |
Property used for personal comfort or
convenience at the construction site, such as portable toilets, food, heaters,
and air conditioning units; |
| 7. |
Property that is
owned or possessed by a contractor or a related party after completion of the
Project's construction. |
|
| (b) |
Property used exclusively for and in the
construction of a Project includes only tangible personal property that:
| 1. |
remains tangible personal property at a
Project's location after the completion of construction; |
| 2. |
is incorporated into the real property
structures at a Project's location; or |
| 3. |
is used by contractors for the sole
purpose of constructing a Project's real property structures. |
|
| (c) |
Energy.
| 1. |
Energy used in construction. Sales of
Energy used for and in the construction of a Project are exempt from all state
and local sales and use taxes pursuant to O.C.G.A. § 48-8-3(93),
including sales and use taxes for educational purposes. |
| 2. |
Energy necessary and integral to
manufacturing. Beginning April 19, 2012, manufacturers that qualify as a
Project and qualify for the manufacturing exemption in O.C.G.A § 48-8-3.2 are exempt from all state
and local sales and use taxes on the sale and use of Energy that is necessary
and integral to the manufacture of tangible personal property, except:
| (i) |
Sales and use tax for educational
purposes. Energy otherwise exempt under O.C.G.A § 48-8-3.2 is not exempt from the
sales and use tax for educational purposes levied pursuant to Part 2 of Article
3 of Chapter 8 and Article VIII, Section VI, Paragraph IV of the Constitution
or from local sales and use taxes for educational purposes authorized by or
pursuant to local constitutional amendment. |
| (ii) |
Energy used to produce electricity. The
exemption in O.C.G.A § 48-8-3.2 for the sale and use of
Energy that is necessary and integral to the manufacture of tangible personal
property does not apply to Energy purchased by a manufacturer that is primarily
engaged in producing electricity for resale. |
|
|
|
| (5) |
Letter of authorization.
Following notification from the commissioner of economic development that a
Project has been certified, the Department of Revenue may issue a letter of
authorization to each location within the Project. Sellers are required to
collect sales tax unless they take in good faith a letter of
authorization. |
| (6) |
Expiration of
letters of authorization. A letter of authorization expires with respect to a
location within a Project when that location commences business
operations. |
| (7) |
Contractor
purchases. A Project may authorize contractors to use the letter of
authorization to make exempt purchases. By January 31 of each year, a Project
must provide to the Department of Revenue a list of all contractors authorized
in the previous calendar year and include for each contractor the business
name, address, telephone number, and Georgia sales tax number. |
| (8) |
Contractors' use tax liability.
Notwithstanding O.C.G.A. § 48-8-63(b) and
(c), contractors will not incur use tax on
tangible personal property qualifying for exemption under this Rule that is
purchased by or furnished to the contractor, regardless of whether the property
retains the character of tangible personal property or becomes incorporated
into real property. |
| (1) |
Each retailer must add all applicable
sales and use taxes at the appropriate rate to the sales price unless he or she
absorbs the tax in compliance with O.C.G.A. § 48-8-36 and paragraph (2) below.
The retailer may add the tax to the sales price by either separately itemizing
the sales price and the tax or including the tax in the total charge.
| (a) |
Separately itemizing the sales price and
the tax.
| 1. |
Example: Retailer sells a $200.00
widget to a purchaser. The applicable sales tax rate is 7%. The retailer may
separately itemize the $200.00 sales price and $14.00 tax, charging a total
amount of $214.00 to the customer and remitting $14.00 in tax to the
Department. |
|
| (b) |
Including the tax in the total charge.
| 1. |
Retailers desiring to include the sales tax in the total charge to the customer
must provide written notification to each customer that the charge includes
sales tax. The notice requirement in this subparagraph does not apply to sales
made from a vending machine. |
| 2. |
Example: Retailer sells a $200.00 widget to a purchaser. The applicable sales
tax rate is 7%. If the retailer provides written notification to the purchaser,
the retailer may include the tax in the total charge of $214.00 and remit
$14.00 of tax to the Department. |
|
|
| (2) |
Tax absorption under O.C.G.A. § 48-8-36.
| (a) |
No retailer engaged in making retail
sales is permitted to advertise or represent to the public in any manner
directly or indirectly that he or she will absorb all or any part of the taxes
imposed by Chapter 8 of Title 48 or that he or she will relieve the purchaser
of the payment of all or any part of such taxes, unless
| 1.
|
the retailer includes in the advertisement that any portion of
the tax not paid by the purchaser will be remitted on behalf of the purchaser
by the retailer; and |
| 2. |
the
retailer furnishes the purchaser with written notification that the retailer
will be liable for and pay any tax the purchaser was relieved from paying under
this Rule. |
|
| (b) |
If a
retailer advertises that any portion of the tax not paid by the purchaser will
be remitted on the purchaser's behalf by the retailer, the retailer will be
solely liable for and must pay that portion of the tax. |
| (c) |
Examples.
| 1.
|
Retailer sells a $200.00 widget to a purchaser. The applicable
sales tax rate is 7%. If the retailer follows the tax absorption rules set
forth in this paragraph (2) and the retailer charges a sales price of $200.00
to the customer, the retailer must absorb the tax and remit $14.00 in tax to
the Department. The tax is calculated by multiplying the sales price of $200.00
by the tax rate of .07. |
| 2. |
Retailer sells a $214.00 widget to a purchaser. The applicable sales tax rate
is 7%. If the retailer follows the tax absorption rules set forth in this
paragraph (2) and the retailer charges a sales price of $214.00 to the
customer, the retailer must absorb the tax and remit $14.98 in tax to the
Department. The tax is calculated by multiplying the sales price of $214.00 by
the tax rate of .07. |
|
|
No exemption is granted to churches, religious, charitable,
civic and other non-profit organizations. They are required to pay the tax on
all purchases of tangible personal property. Further, when such organizations
engage in selling tangible personal property at retail, they are required to
comply with provisions of the Act relating to collection and remittance of the
tax.
| (1) |
The tax does not apply to sales of
tangible personal property and services to the University System of Georgia and
its educational units. |
| (2) |
The tax
does not apply to sales of tangible personal property and services to be used
exclusively for educational purposes by those private colleges and universities
in this State whose academic credits are accepted as equivalents by the
University System of Georgia and its educational units. However, such private
college or university must furnish each supplier of exempt tangible personal
property or services with a copy of "Letter of Authorization", (Form STUSC- 1)
issued by the Sales and Use Tax Unit. |
| (3) |
The following are examples of tangible
personal property and services which are exempt when sold to such private
colleges and universities for use in their academic and educational facilities:
| (a) |
Books purchased for library. |
| (b) |
Books purchased for teachers. |
| (c) |
Maintenance supplies. |
| (d) |
Instructional supplies. |
| (e) |
Athletic equipment and supplies, except
when purchased by an independent athletic association. |
| (f) |
Electricity and fuel. |
| (g) |
Furniture and fixtures. |
| (h) |
Office supplies and equipment. |
| (j) |
Laboratory equipment. |
| (k) |
Food purchased by the college or
university and furnished to its students as a part of a single charge for room,
board and tuition. |
|
| (4) |
The following are examples of tangible personal property and services which are
not exempt when sold to such colleges and universities:
| (a) |
Motel charges for school conferences when
paid for by individual students. |
| (b) |
College yearbook when payment is not
included in tuition fees and charges. |
| (c) |
In event such colleges and universities
sell meals to students and others, wherein the meal is paid for by means other
than the charge for such meals having been included in room, board and tuition
fees and charges, the colleges and universities shall collect the tax from such
students and other persons as a retail sale. |
|
| (1) |
Communication Services. The
tax applies to charges made for local exchange telephone services, for cellular
telephone services, and for the amount of the guaranteed charges for
semi-public coin-box telephone services. The tax does not apply to other
communication services. Installation and service establishment charges are not
taxable if separately stated on the customer's bill. However, the tax applies
to all tangible personal property purchased or used in this State in connection
with rendering interstate or intrastate communication (telephone)
services. |
| (2) |
Cellular
Telephone Services.
| (a) |
Taxable
Charges:
| 1. |
The monthly access charge (charge
for the right to access the cellular system) in the amount as set forth on each
cellular telephone provider's statement or bill to its customer or subscriber.
However, should the monthly charge include both access and a stated allowed
airtime usage in a combined or bundled amount, tax will be due on the entire
combined or bundled amount, unless, on the bill or statement, the amount is
broken out as between the various charges. When unbundling the taxable amount,
the minimum ascribed to monthly access must be no less than the minimum monthly
access charge made by the cellular telephone provider to the general public for
access to the cellular system (when no calls are placed by the customer and no
airtime is utilized by the customer) that is in effect during the billing
period. |
| 2. |
All vertical services
for special features, including, but not limited to, call waiting, call
forwarding, speed calling, three-way calling. |
| 3. |
The daily access portion of the "roaming"
charge made by the serving cellular provider serving the area within this State
in which the customer call is placed ("serving cellular provider") to the
billing cellular provider, for customer access to the serving cellular
provider's service area. |
|
| (b) |
Non Taxable Charges:
| 1. |
Airtime usage, if listed separately on the
customer's bill or statement. |
|
| (c) |
Situs for Determining Tax Rates. The situs for determining tax rates for
taxable cellular telephone services is the customer's garage or billing
address. However, if both addresses are outside this State, then the situs is
the location of the Serving Cellular Provider's serving switch. For billing
roamer access charges, calls are considered to be placed and shall be taxed at
the tax rate prevalent at the situs of the Serving Cellular Provider's serving
switch. In the event a cellular telephone provider has a cellular system that
traverses state lines and has cells and customers located in states traversed
by such system, the situs, for the purpose of collection and remittance of
taxes for taxable cellular services, as between the states traversed by such
system, shall be the customer's garage or billing address. |
| (d) |
Interconnection Services. With respect to
and for that portion of taxes otherwise subject to collection from a cellular
telephone provider by its local exchange telephone carrier(s), for the
provision of access or interconnection services that are resold by any such
cellular provider, a cellular provider may either (i) take a credit, equal to
the taxes collected by its local exchange telephone carrier(s) on access or
interconnection services, against taxes due by the cellular provider to the
Department, or (ii) execute a valid Certificate of Exemption (Form ST-5) for
exemption from payment of taxes on access or interconnection services that are
resold by the cellular provider. No credit may be taken for that portion of
taxes collected from any cellular telephone provider by its local exchange
telephone carrier(s) for the provision of local telephone measured usage
services. (No credit or refund shall be given by the Department to any cellular
telephone provider for taxes collected from any cellular telephone provider on
the provision of local exchange telephone services to such cellular telephone
provider by its local exchange telephone carrier prior to December 1,
1992.) |
|
| (1) |
Purpose. This Rule explains
the sales and use tax exemption in O.C.G.A. § 48-8-3(94) for
materials used to package tangible personal property for shipment or sale. This
Rule does not address the exemptions for packaging supplies used in
manufacturing and agriculture. |
| (2) |
Single-use Containers and Packaging Materials. Sales and use tax
does not apply to containers and packaging materials used in a trade or
business for packaging tangible personal property for shipment or sale if such
items are used solely for packaging and are not purchased for reuse by the
seller or shipper of the tangible personal property. Exempt items include but
are not limited to cans, boxes, and bottles in which goods are contained; boxes
in which goods are delivered to customers; materials used to make containers;
wrapping paper, plastic, wire, foam, twine, bottle caps, excelsior insulating
material, crates, grocery bags, take-out boxes, shipping labels, packing
peanuts, and tape. Invoices, packing slips, labels, tags, and plates are exempt
from sales and use tax if affixed to the product or affixed to or inserted into
the product packaging. |
| (3) |
Reusable Containers and Packaging Materials. Sales and use tax
applies to containers and packaging materials purchased for reuse by the seller
or shipper of tangible personal property, including containers and packaging
materials that temporarily pass to the purchaser until they are returned to the
seller or shipper for reuse or returned to a pool of substantially identical
items for the seller's or shipper's reuse. Examples of such items include but
are not limited to pallets, storage tanks, truck bodies, shopping carts and
baskets, delivery crates, dispensers, measures, dishes, and beverage
glasses. |
| (4) |
Promotional
Materials. Sales and use tax applies to advertising inserts, catalogs,
and other similar promotional materials. |
| (5) |
Trade or Business Use Only.
The exemption in O.C.G.A. § 48-8-3(94)
applies only to containers and packaging materials used in a trade or business.
A purchaser must present a properly completed certificate of exemption in order
to qualify for the exemption. |
| (1) |
Any person who
contracts to furnish tangible personal property and perform services thereunder
in constructing, altering, repairing or improving real property in this State
is deemed to be the consumer of all tangible personal property used or consumed
in performing such contract and shall pay the tax thereon at the time of
purchase, use, storage or consumption in this State, whichever occurs
first. |
| (2) |
General or Prime
Contractor Defined.
| (a) |
A general or
prime contractor shall include but not be limited to any person, partnership,
limited liability partnership, corporation or limited liability company who
shall contract with the owner, lessee or other person having authority to enter
into a contract involving the premises or property as designated by said
contract, to perform services and/or furnish materials for the construction,
alteration, or improvement of any real property or project. |
| (b) |
A general or prime contractor shall also
include any person, partnership, limited liability partnership, corporation or
limited liability company who owns or leases real estate for the purpose of
developing said real estate other than for his or her own occupancy, and in the
development thereof, contracts, alters, or makes improvements
thereon. |
| (c) |
A general or prime
contractor shall also include any person, partnership, limited liability
partnership, corporation or limited liability company who owns or leases real
estate and in the development, alteration, or improvement thereof, or
construction thereon, contracts with another person, partnership, or
corporation to furnish tangible personal property and perform
services. |
|
| (3) |
Subcontractor Defined. A subcontractor shall include any person,
partnership, limited liability partnership, corporation or limited liability
company who contracts with the prime or general contractor to perform all or
any part of the contract of the prime or general contractor or who shall
contract with a subcontractor who has contracted to perform any part of the
contract entered into by the prime or general contractor. |
| (4) |
Sales and Use Tax Registration and
Filing Requirements.
| (a) |
Every
contractor or subcontractor improving real property in this State shall file an
application for a Certificate of Registration (CRF-002) as a contractor prior
to his first construction activity in this State. |
| (b) |
Sales and use tax returns shall be made
by general or prime contractors and by subcontractors on a monthly basis,
unless otherwise authorized, for such taxes owed by each respectively. The
returns are to be made on Form ST-3 as prescribed by the
commissioner. |
| (c) |
Every general or
prime contractor and every subcontractor shall have 20 days from the last day
of the reporting period in which to file their sales and use tax returns and
remit the tax to the commissioner, as is provided in these Rules and
Regulations. |
|
| (5) |
Initial General or Prime Contractor Notice. Each general or prime
contractor shall within thirty (30) days after the execution of a contract with
a subcontractor whose aggregate contract(s) amount(s) on any single project is
equal to or exceeds $250,000 file with the commissioner a notice, Form S &
U T 214-1, that identifies each applicable subcontractor and contract amount.
If a general or prime contractor has filed a notice (Form S & U T 214-1) as
a result of a previous contract entered during the calendar year and is
subsequently provided a notice (Form S & U T 214-5) from the commissioner
concerning the subcontractor, then the general or prime shall be relieved from
submitting any additional notices (Form S & U T 214-1) on any future
contracts with such subcontractors during that calendar year. |
| (6) |
Withholding and Remittance
Requirements.
| (a) |
Each general or
prime contractor whose aggregate contract(s) amount(s) on any single project is
equal to or exceeds $250,000 with a single subcontractor is required to
withhold 2% of the payments due the subcontractor, arising out of such
contract(s), unless said contractor has filed an approved surety bond with the
commissioner in accordance with the Act. |
| (b) |
Upon receipt of the written report from
the subcontractor showing the amount of work completed on the contract and that
all sales and use taxes due the State have been paid by the subcontractor, the
Department of Revenue, Sales and Use Tax Division, shall send a written notice
(Form S & U T 214-6) to the general or prime contractor and subcontractor.
The general or prime contractor shall be authorized to pay the subcontractor
all amounts withheld for the payment of sales and use tax during the period
covered on the written notice (Form S & U T 214-6). |
| (c) |
Each general or prime contractor shall
send a written notice (Form S & U T 214-7) to the commissioner identifying
the total amount withheld after such amount has been held for a period of 60
days following the subcontractor's sales and use tax return reporting
period. |
| (d) |
General or prime
contractors must remit retainage withheld from payments to subcontractors upon
notice of demand for payment (Form S & U T 214-8). |
|
| (7) |
Sales and Use Tax Surety Bond.
| (a) |
In lieu of the retention of the
two percent (2%) by the general or prime contractor of the amounts due the
subcontractor, the subcontractor may provide an annual or continuous surety
bond (Forms S & U T 214-3 or Form S & U T 214-3C) approved by the
commissioner as to form, sufficiency, value, amount, stability, and other
features necessary to provide a guarantee of payment of tax due under the
Act. |
| (b) |
The bond shall be made to
the Department of Revenue, Sales and Use Tax Division, by the subcontractor on
the application (Form S & U T 214-2). The annual surety bond shall cover a
calendar year and shall expire on December 31 of each year, and a new bond, if
needed, shall be filed with the commissioner. The continuous bond shall
continue without interruption until notification has been received from the
surety company that the subcontractor has not renewed the bond or that the bond
has been cancelled. |
| (c) |
Each
subcontractor who shall desire to make a bond in accordance with O.C.G.A.
§ 48-8-63 shall be required to have
as surety on said bond a surety corporation authorized to do business in the
State of Georgia. The amount of the bond shall be based on the following
schedule:
| 1. |
Subcontractors whose anticipated
annual gross receipts from subcontracting in Georgia for the year is less than
$250,000 shall not be required to have a bond; |
| 2. |
Anticipated annual gross receipts $250,000
to $500,000 - Bond in sum of $5,000. |
| 3. |
Anticipated annual gross receipts $500,000
to $750,000 - Bond in sum of $20,000. |
| 4. |
Anticipated annual gross receipts $750,000
to $1,000,000 - Bond in sum of $30,000. |
| 5. |
Anticipated annual gross receipts over
$1,000,000 - Bond in sum of $50,000. |
|
| (d) |
At any time while the bond is in force,
the commissioner may within his discretion increase or decrease the amount of
an individual bond or establish a new schedule for all bonds. |
| (e) |
The amount of bond required of a new
subcontracting business with no prior history of business in Georgia shall be
determined at the commissioner's discretion. |
| (f) |
When a subcontractor's bond is filed and
approved by the commissioner, the Department of Revenue, Sales and Use Tax
Division, shall promptly prepare a certificate (Form S & U T 214-4) and
forward the original of such certificate as notice to the subcontractor. Upon
the subcontractor's written request the Department of Revenue, Sales and Use
Tax Division, shall send a notice of the subcontractor's surety bond approval
(Form S & U T 214-5) to each general or prime contractor in order to be
relieved from withholding the two percent (2%) retainage. The subcontractor's
bond approval notice (Form S & U T 214-5) issued on a subcontractor's
continuous surety bond shall be valid until the Department of Revenue, Sales
and Use Tax Division, notifies the general or prime contractor and
subcontractor that the bond has not been renewed or that the bond has been
cancelled. |
| (g) |
In the absence of
the subcontractor's surety bond approval notice (Form S & U T 214-5) to the
general or prime contractor, the contractor must withhold the two percent (2%)
retainage of the subcontractor's receipts due on any given project that equals
or exceeds $250,000. |
|
| (8) |
Foreign and Non-Resident Contractors. A foreign or nonresident
subcontractor applicant shall be required to submit a sales and use tax bond to
authorize release from withholding provisions of the Act in addition to the
foreign and non-resident bonding requirements provided for under O.C.G.A.
§ 48-13-32(See Revenue Rule
entitled Foreign and
Non-Resident Contractors and Subcontractors. Amended). |
(Also see Rule
).
| (1) |
The tax applies to purchases of tangible
personal property by homes for the care and maintenance of children, the aged
or other persons, whether or not operated for profit. |
| (2) |
The tax does not apply to receipts for
the care and maintenance of such persons. |
Charges to participate in a 10k, half-marathon, marathon,
"fun run", walk, wheelchair race, bicycle race, triathlon, or any other similar
non-motorized race are not considered to be charges for participation in games
or amusement activities and are therefore not subject to tax.
| (1) |
Dies, patterns, tools, castings or other
tangible personal property made by machinists, foundrymen, pattern makers and
others for their own use are subject to the tax, based upon the cost price of
materials used. |
| (2) |
When such
property is made to order for a customer, the tax applies to the total charge
therefor, without deduction for fabrication labor. |
| (3) |
Retail sales of dies, patterns, tools and
castings are taxable based upon the sales price thereof. |
| (1) |
Purpose. This Rule sets
forth the application of sales and use tax to certain drugs, durable medical
equipment, prosthetic devices, and other medical items. |
| (2) |
Definitions. For the
purposes of this Rule, the following definitions and explanations of terms
shall apply:
| (a) |
"Drug" means a compound,
substance, or preparation, and any component of a compound, substance, or
preparation, other than "food and food ingredients," "dietary supplements," or
"alcoholic beverages":
| 1. |
Recognized in the
official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the
United States, or official National Formulary, or supplement to any of them;
or |
| 2. |
Intended for use in the
diagnosis, cure, mitigation, treatment, or prevention of disease; or |
| 3. |
Intended to affect the structure or any
function of the body. |
|
| (b) |
Durable medical equipment.
| 1. |
"Durable medical equipment" means
equipment, including repair and replacement parts for the same, that:
| i. |
Can withstand repeated use; |
| ii. |
Is primarily and customarily used to serve
a medical purpose; |
| iii. |
Generally is
not useful to a person in the absence of illness or injury; |
| iv. |
Is not worn in or on the body;
and |
| v. |
Is not "mobility enhancing
equipment." |
|
| 2. |
Examples
of durable medical equipment include but are not limited to:
| i. |
Hospital beds, mattresses, and
bedding-related attachments; |
| ii. |
Drug infusion equipment (non-implanted),
nebulizers, vaporizers, oxygen concentrators, infant apnea monitors, and
ventilators; |
| iii. |
Sitz bath chairs,
bed pans, urinals; |
| iv. |
Heat lamps,
heat pads, and hot water bottles; and |
| v. |
Blood glucose monitors, electronic nerve
stimulators (non-implanted), breast pumps, and insulin infusion pumps
(non-implanted). |
|
|
| (c) |
Mobility enhancing equipment.
| 1. |
"Mobility enhancing equipment" means
equipment, including repair and replacement parts to the same, that:
| i. |
Primarily and customarily is used to
provide or increase the ability to move from one place to another and that is
appropriate for use either in a home or a motor vehicle; and |
| ii. |
Generally is not used by persons with
normal mobility; and |
| iii. |
Does not
include any motor vehicle or equipment on a motor vehicle normally provided by
a motor vehicle manufacturer. |
|
| 2. |
"Mobility enhancing equipment" does not
include "durable medical equipment." |
| 3. |
Examples of mobility enhancing equipment
include but are not limited to:
| i. |
Adjustable
or raised toilet seats; |
| ii. |
Tub and
shower stools or benches; |
| vi. |
Grab bars and hand rails; |
| ix. |
Scooters and transporters for disabled
persons; |
| xi. |
Transfer belts and
benches; |
| xiii. |
Wheelchairs and
ramps. |
|
|
| (d) |
"Natural person" means an individual human being. |
| (e) |
"Over-the-counter drug" means a drug that
contains a label identifying the product as a drug as required by
21 C.F.R. § 201.66. The "over-the-counter drug" label
includes:
| 1. |
A "Drug Facts" panel;
or |
| 2. |
A statement of the "active
ingredient(s)" with a list of those ingredients contained in the compound,
substance, or preparation. |
|
| (f) |
"Physician" means a person licensed to
practice medicine pursuant to Article 2, Chapter 34 of Title 43. |
| (g) |
"Prescription" means an order, formula,
or recipe issued in any form of oral, written, electronic, or other means of
transmission by a duly licensed practitioner authorized by the laws of this
state. |
| (h) |
Prosthetic device.
| 1. |
"Prosthetic device" means a replacement,
corrective, or supportive device including repair and replacement parts for the
same worn on or in the body to:
| i. |
Artificially replace a missing portion of the body; or |
| ii. |
Prevent or correct physical deformity or
malfunction; or |
| iii. |
Support a weak
or deformed portion of the body. |
|
| 2. |
"Prosthetic device" does not include
hearing aids and eyeglasses. |
| 3. |
Examples of prosthetic devices include but are not limited to:
| i. |
Artificial implants such as artificial
arteries (e.g., vascular grafts, stents), hearts and valves (e.g., atrial,
mitral, annuloplasty rings), ears, nose, eyes (e.g., intraocular lenses), skin
and other tissues (e.g., collagen, hyaluronic acid), larynx, or any other
implant that replaces, in whole or part, a part of the human body; |
| ii. |
Bone nails, pins, screws, plates, fixation
devices, bone cement, wax, fillers, or other items surgically implanted into
the body used to correct deformities, or to preserve and restore the function
of the human skeletal system; |
| iv. |
Breast prostheses, including surgical
brassieres for post- mastectomy patients; |
| v. |
Cardiac pacemakers and implanted
cardioverter defibrillators; |
| vi. |
Implanted nerve stimulators; |
| vii. |
Implanted tissue expanders; |
| viii. |
Implanted devices used for
hydrocephalus; |
| x. |
Gastric bands and
intragastric balloons; |
| xi. |
Colostomy, ileostomy and urostomy
appliances, including bags and necessary equipment required for attachment,
such as tubing; |
| xii. |
Electronic
speech aids if the patient had a laryngectomy or if the larynx is
inoperative; |
| xiii. |
Urinary
collection systems, including Foley catheters, when replacing bladder function
in cases of urinary incontinence; |
| xiv. |
Enteral or parenteral feeding systems and
their individual components (e.g., catheters, filters, extension tubing,
infusion pumps); |
| xv. |
Artificial
legs, arms and eyes, including terminal devices such as artificial
hands; |
| xvi. |
Braces, cervical
collars, abdominal belts, anti-embolism stockings, pressure/compression
garments, trusses, supports, suspensories, and similar devices worn on the body
to correct or alleviate a physical incapacity or injury; |
| xvii. |
Hoods and space shoes that replace part
of a foot; |
| xviii. |
Stump stockings
and harnesses essential to the effective use of an artificial limb,
and |
| xix. |
Dental crowns, implants,
complete and partial dentures, obturators and fillings. |
|
|
|
| (3) |
Drugs.
| (a) |
The sale or use of drugs
that are lawfully dispensable only by prescription for the treatment of natural
persons is exempt from Georgia sales and use tax. This exemption applies to all
purchasers including but not limited to individual consumers, hospitals,
clinics, and medical practice groups. |
| (b) |
Unless otherwise exempt, all sales of
over-the-counter drugs are subject to Georgia sales and use tax regardless of
whether they are dispensed under a prescription, even if the over-the-counter
drug is purchased on the advice or recommendation of a physician. Examples of
over-the-counter drugs include but are not limited to aspirin, acetaminophen,
ibuprofen, cold remedies, antacids, laxatives, and cold sore gels. |
| (c) |
Dealers must maintain sufficient
prescription documentation to support exempt sales. |
|
| (4) |
Durable Medical Equipment.
| (a) |
Purchases for resale.
Durable medical equipment may be purchased tax exempt for resale only if
title and possession will be permanently transferred to a natural person to
whom a prescription for the equipment is issued or if full possession, control
and use will be transferred, pursuant to a bona fide lease agreement, to a
natural person to whom a prescription for the equipment is issued.
| 1. |
Durable medical equipment that can be sold
or used only pursuant to a prescription under federal or state law may be
purchased tax exempt for resale pursuant to this subparagraph without
furnishing form ST-5 (Sales and Use Tax Certificate of Exemption). |
| 2. |
If an item of durable medical equipment
may lawfully be sold without a prescription, the purchaser must furnish form
ST-5 to its vendor in order to purchase the item tax free for resale. |
|
| (b) |
Transfers to patients.
Pursuant to O.C.G.A. § 48-8-3(54)
durable medical equipment may be transferred tax exempt to a natural person to
whom a prescription for the equipment is issued. |
| (c) |
Use by service providers.
If a service provider uses, possesses or controls an item of durable
medical equipment at any time in providing a medical service (including but not
limited to diagnostic, treatment, or rehabilitative services), the item is not
considered to have been sold or used pursuant to a prescription and the service
provider is liable for sales or use tax on the service provider's cost price of
the item. |
|
| (5) |
Prosthetic Devices.
| (a) |
If a
prosthetic device can be sold or used only pursuant to a prescription under
federal or state law, and title and possession will be permanently transferred
to a natural person to whom a prescription for the device is issued, the entity
(including hospitals, clinics, and medical practice groups) transferring the
device may purchase the item tax exempt without furnishing form ST-5 (Sales and
Use Tax Certificate of Exemption). The entity subsequently may transfer the
device tax exempt pursuant to O.C.G.A. § 48-8-3(54) to a
natural person to whom a prescription for the device is issued. |
| (b) |
If a prosthetic device may lawfully be
sold without a prescription, and title and possession will in fact be
permanently transferred to a natural person pursuant to a prescription issued
to that person, the entity transferring the device must furnish an ST-5 to its
vendor in order to purchase the item tax free for resale. The transferring
entity may then transfer the item tax exempt pursuant to O.C.G.A. § 48-8-3(54) when
the transfer is made to a natural person pursuant to a prescription issued to
that person. |
|
| (6) |
Mobility Enhancing Equipment.
| (a) |
Purchases for resale. Mobility enhancing equipment may be
purchased tax exempt for resale only if title and possession will be
permanently transferred to a natural person to whom a prescription for the
equipment is issued by a physician or if full possession, control and use will
be transferred, pursuant to a bona fide lease agreement, to a natural person to
whom a prescription for the equipment is issued by a physician.
| 1. |
Mobility enhancing equipment that can be
sold or used only pursuant to a prescription under federal or state law may be
purchased tax exempt for resale pursuant to this subparagraph without
furnishing form ST-5 (Sales and Use Tax Certificate of Exemption). |
| 2. |
If an item of mobility enhancing equipment
may lawfully be sold without a prescription, the purchaser must furnish form
ST-5 to its vendor in order to purchase the item tax free for resale. |
|
| (b) |
Transfers or sales to
patients. Pursuant to O.C.G.A. § 48-8-3(72)
mobility enhancing equipment may be transferred tax exempt to a natural person
to whom a prescription for the equipment is issued by a physician. |
| (c) |
Use by service providers.
If a service provider uses, possesses or controls an item of mobility
enhancing equipment at any time in providing a medical service (including but
not limited to diagnostic, treatment, or rehabilitative services), the item is
not considered to have been sold or used pursuant to a prescription and the
service provider is liable for sales or use tax on the service provider's cost
price of the item. |
|
| (7) |
Other Medical Items.
| (a) |
Eyeglasses and contact lenses.
| 1. |
The sale of
eyeglasses and contact lenses is exempt from sales and use tax when the sale is
made to a natural person pursuant to a prescription issued to that
person. |
| 2. |
The distribution of
prescription contact lenses by the manufacturer to licensed dispensers, that
are free samples not intended for resale and labeled as such, are exempt from
sales and use tax. |
|
| (b) |
The sale of oxygen is exempt from sales and use tax when the sale is made to a
natural person pursuant to a prescription issued to that person by a licensed
physician.
For example, a medical service provider purchases oxygen from
a seller and then sells the oxygen to a patient pursuant to a prescription
issued to that patient by a licensed physician. The service provider's purchase
is taxable unless the provider presents a resale certificate to the seller. The
service provider's sale of oxygen to the patient is exempt under O.C.G.A.
§ 48-8-3(51).
|
| (c) |
The sale of hearing aids is exempt from
sales and use tax. This exemption applies to all purchasers including but not
limited to individual consumers, hospitals, clinics, and medical practice
groups. |
| (d) |
The sale of insulin
syringes, insulin, and blood measuring strips is exempt from sales and use tax.
This exemption applies to all purchasers including but not limited to
individual consumers, hospitals, clinics, and medical practice
groups. |
| (e) |
Enteral nutrition and
parenteral nutrition are exempt from sales and use tax when sold to a natural
person pursuant to a prescription issued to that person. |
|
The tax applies to sales of dunnage and other shoring
materials.
| (1) |
Electricity, steam, gas, and fuels. Unless a specific exemption
applies, sales and use tax applies to sales of electricity, steam, natural gas,
artificial gas, fuel, and other energy-providing materials, including mandatory
service charges, when sold for any purpose other than for resale in its
original form by a qualified reseller. The tax does not apply to deposits used
to guarantee payment of utility services. |
| (2) |
Water. Sales and use tax
does not apply to water delivered to consumers through water mains, lines, or
pipes. |
Organizations of employees which sell tangible personal
property to members or others are required to collect and remit the tax. It is
the responsibility of all such organizations to request from the Commissioner a
determination as to the necessity for registration with the Sales and Use Tax
Unit.
The tax applies to dynamite, black powder and other
explosives when purchased for mining, quarrying, construction work or for any
purposes other than resale.
| (1) |
An operation which restores a used or
worn piece of tangible personal property to its original state is a service and
charges for labor in repairing such property are not taxable when billed
separately to the customer. An operation which changes the form or state of the
property is one of fabrication. |
| (2) |
Persons regularly engaged in the fabrication or production of tangible personal
property for sale at retail shall collect and remit the tax on the sales price
of such property. When the fabricator converts such property to his own use, he
shall remit the tax based on the fair market value thereof at the time of its
first use by him. |
| (3) |
The tax
applies to the total charge for the fabrication or production of tangible
personal property on a special order for a consideration. For example, if a
manufacturer orders a part for machinery from a machine shop, the tax shall be
collected on the total charge for the part, including labor, although charges
for labor may be segregated from the cost of the materials. |
| (4) |
The tax applies to the charges for the
fabrication of tangible personal property for users or consumers who furnish,
either directly or indirectly, the materials used in the fabrication work. For
example, the tax would apply to charges made by a tailor who makes an article
of wearing apparel from material furnished by the customer. (Also see Rule
) |
| (1) |
Every person making an admission charge
of more than 10c to any place of amusement shall collect the tax in accordance
with the authorized bracket system. (See Rule
). |
| (2) |
All charges of more than 10c made at
carnivals, fairs, amusement parks, and similar places for rides on
merry-go-rounds, roller coasters, ferris wheels and the like, and the
participation in games are subject to the tax. For the purpose of collecting
this tax, each admission or other charge shall be deemed a single sale unless
the books and records of the dealer accurately reflect amounts of each
combination or multiple sale. |
| (3) |
The tax does not apply to admissions by free pass. If a service charge or
donation in excess of 10c is required for the issuance of an admission pass,
the tax applies to the charge or donation. |
| (4) |
Tangible personal property used or
consumed in the operations of fairs, circuses, carnivals, amusement parks,
etc., is taxable, based on the sales price if purchased in Georgia. If
purchased outside of Georgia, the tax shall be based on the cost price or fair
market value at the time of first use in this State, whichever is the lesser,
and subject to credit for sales or use taxes legally imposed and paid to a
reciprocating state. |
| (5) |
Itinerant
operators of fairs, circuses, or any other amusement or entertainment activity
in this State shall furnish this Department with a complete itinerary prior to
his first showing or activity herein. Such operators and concessionaires shall
collect the tax as set out hereinabove and pay the same to the State Revenue
Commissioner or as directed by an authorized agent of the Revenue
Department. |
| (1) |
Farmers, market masters, and other
persons engaged in selling tangible personal property, whether at retail or for
resale, must register as a dealer. |
| (2) |
The tax applies to retail sales of farm
products, whether sold by peddlers or at a public market, roadside stand, farm,
or any other place, irrespective of whether the place of business is located on
private, state, county, or municipal property. |
| (3) |
All sales are subject to the tax until
the contrary is established. The burden of proving that a sale of tangible
personal property is not a sale at retail is on the seller unless the seller
takes in good faith from the purchaser a certificate stating that the property
is purchased for resale or is otherwise tax exempt. |
| (1) |
The tax applies to all retail sales by
private concessionaires in Federal areas to servicemen, Federal employees and
other persons to the same extent that it applies with respect to retail sales
elsewhere within the State. |
| (2) |
The
use tax applies to the cost price or fair market value, whichever is the
lesser, of automobiles imported into the State by military personnel and other
persons. However, credit shall be allowed for sales or use tax legally imposed
and paid to a reciprocating State. |
| (1) |
The tax does not apply to sales to the
Federal Government, the State of Georgia, or any county or municipality of the
State of Georgia or any bona fide department of such government when paid for
directly to the seller by warrant on appropriated government funds; provided
that any hospital authority created by Chapter 8818 of the Code of Georgia is
exempt from the tax. |
| (2) |
Sales to
governmental employees for their own consumption or use are taxable. |
| (3) |
The tax applies to sales on Federal
Property, i,e., sales to persons in the armed services of the United States and
to civilian employees of such services, except when such sales are made to them
as authorized purchasers for a service organization operating exclusively
within a United States Military Reservation and authorized by the Secretary of
Defense. The tax does not apply to sales to officers clubs, non-commissioned
officers clubs and post exchanges organized, operated and controlled under
regulations promulgated by the departmental Secretary of the Department of
Defense having jurisdiction thereof, and operated exclusively in a functional
area of the command of which they are a part. The exemption from the collection
or the payment of sales and use tax does not cover individuals or organizations
operating on a military reservation in their own right. No person shall be
relieved from liability for payment of, collection of, or accounting for the
tax on the ground that the sales or use, with respect to which the tax is
levied, occurred in whole or in part within a Federal area. |
| (1) |
The tax applies to retail sales of
flowers, potted plants, shrubbery, nursery stock, wreaths, bouquets, and
similar items. |
| (2) |
When a
nurseryman, florist, or other person makes retail sales of shrubbery and
similar items, and as a part of the transaction agrees to transplant them on
the land of the purchaser for a lump sum, the tax applies to the total charge
therefor, except in those cases where installation is billed
separately. |
| (3) |
Where florists sell
through telegraphic delivery association the following rules will apply:
| (a) |
On all orders taken by a Georgia florist
and telegraphed to a second florist in Georgia for delivery in this State, the
sending florist will be held liable for tax on the total amounts collected from
the customer. |
| (b) |
In cases where a
Georgia florist receives an order pursuant to which he gives telegraphic
instructions to a second florist located outside Georgia for delivery of
flowers to a point outside Georgia, tax will likewise be owing with respect to
the total receipts of the sending florist from the customer who placed the
order. |
| (c) |
In cases where a Georgia
florist receives telegraphic instructions from other florists located either
within or outside of Georgia for the delivery of flowers, the receiving florist
will not be held liable for the tax with respect to any receipts which he may
realize from the transaction. In this instance, if the order originated in
Georgia, the tax will be payable by the Georgia florist who first received the
order and gave the telegraphic instructions to the second florist. |
| (d) |
Charges for telegraphic messages are not
taxable when billed separately to the customer. |
|
| (4) |
Where a florist directs a wedding,
furnishes flowers, decorations, refreshments, etc. for a flat charge, the total
charge is subject to the tax. However, if a separate charge is made for
professional services, such charge may be excluded from the sales tax
base. |
| (1) |
"Contractor"
includes nonresident individuals, partnerships, firms or corporations, or
associations engaged in the business of the construction, alteration,
repairing, dismantling or demolition of buildings, roads, bridges, viaducts,
sewers, water and gas mains, streets, disposal plants, water filters, tanks and
towers, airports, dams, water wells, pipe lines, and every other type of
structure, project, development or improvement coming within the definition of
real property and personal property, including such construction, alteration,
or repairing of such property to be held either for sale or rental, and further
including all subcontractors so engaged. |
| (2) |
Application for Authorization to Perform
Contract (Form S&UT-348-1) must be filed for each contract amounting to
more than $10,000.00 and a fee paid in the sum of $10.00 for each such
contract. A good and valid bond shall be executed by a Surety Company
authorized to do business in this State in the amount of 10% of the contract
price or the compensation to be received for each contract. Nonresident
contractors engaging in multiple contracts, contingent or unit basis where the
compensation to be received cannot be determined, a blanket bond may be
executed in a sufficient amount, within the discretion of the Commissioner of
Revenue but under no circumstances to be less than $10,000.00. Contractors so
engaged must report each such contract on or by the first day of March of the
subsequent calendar year and pay a fee of $10.00 for each such contract.
Nonresident contractors and subcontractors must file a "Consent to Service of
Process" appointing the Secretary of State of Georgia as the true and lawful
agent upon whom may be served any summons or other lawful process. |
| (3) |
Upon posting the required bond and
payment of the registration fee, nonresident contractors and subcontractors
shall be furnished a "Qualification Acknowledgement", Form S&UT-348-2,
which shall be maintained by a person in authority at the job site for
inspection by any duly authorized officer or agent of the State of Georgia, or
any political subdivision thereof, to evidence payment of the required fee and
posting of the Surety Bond for the contract so indicated. |
| (4) |
A contract in accordance with the terms
of this Act shall not be deemed to be completed until such time as a written
notice of contract completion has been furnished to the Revenue Department by
the contractor, accompanied by an affidavit that all fees and taxes incurred in
connection with the contract have been paid to the State of Georgia and all
political subdivisions thereof. |
| (5) |
Upon completion of every contract amounting to more than ten thousand dollars
($10,000), the contractor or subcontractor shall furnish to the Commissioner of
Revenue a written notice of contract completion, together with an affidavit
that all fees and taxes incurred in connection with the contract have been paid
to the State of Georgia and all political subdivisions thereof. A contract is
not deemed to be completed in accordance with the terms of said Act until such
time as the contract completion has been reported in the aforementioned manner,
nor shall the provision for automatic bond release apply until two (2) years
after the receipt of such notice by the Commissioner. |
Every person outside this State who engages in business in
this State as a dealer as defined in the Act, is required to register, collect
and remit the tax on all taxable tangible personal property sold or delivered
for storage, use or consumption in this State. Such dealers must file monthly
sales and use tax reports, unless otherwise authorized, and perform all other
duties required of dealers in this State.
| (1) |
"Delivery charges" means charges by the
seller of tangible personal property or services for preparation and delivery
to a location designated by the purchaser of the tangible personal property or
services, including but not limited to charges for transportation, shipping,
postage, handling services, crating, and packing; fuel surcharges; split
shipment charges; small order charges; and other similar charges. The term
"delivery charges" does not include postage charges for the delivery of direct
mail when the postage charge is passed on dollar-for-dollar without being
marked up to the purchaser of the direct mail and separately stated on an
invoice or other similar billing document given to the purchaser. |
| (2) |
Where taxable tangible personal property
is sold at retail and the seller makes a delivery charge, the charge is taxable
regardless of whether the charge is optional (i.e., not required to complete
the underlying sale of the tangible personal property) or separately
stated. |
| (3) |
Where taxable tangible
personal property is sold at retail and the seller handles the shipping
transaction as agent for the purchaser, the delivery charge is not taxable so
long as:
| (a) |
the seller maintains an escrow
account on behalf of the purchaser for delivery charges; |
| (b) |
the seller maintains separate invoicing
for delivery charges, reflecting escrow deposits and withdrawals; |
| (c) |
the seller maintains books and records
reflecting the deposits, withdrawals, and the balance of the delivery escrow
accounts maintained for each customer; |
| (d) |
the contract between the seller and the
purchaser prohibits the seller from financing or marking up the delivery
charges; |
| (e) |
the contract between
the seller and the purchaser requires the purchaser to deposit funds for
delivery charges into the escrow account in advance of delivery; and |
| (f) |
the contract between the seller and the
purchaser states that the purchaser pays shipping cost and takes responsibility
for the property when it leaves the seller's premises. |
|
| (4) |
Charges made for the transportation of
tangible personal property are not subject to sales tax when the transportation
charges are not associated with a taxable sale of tangible personal
property. |
| (5) |
If a transaction
between a dealer and a customer includes both taxable items and nontaxable
items, the dealer may either charge and collect tax on the entire delivery
charge or charge tax on a portion of the delivery charge based on either (i)
the percentage of the sales price of the taxable property compared to the total
sales price of all property in the shipment, or (ii) the percentage of the
total weight of the taxable property compared to the total weight of all
property in the shipment. The dealer must maintain records supporting the
calculation of taxes on delivery charges. |
| (6) |
Examples:
| (a) |
A seller of taxable tangible personal
property arranges for a third party carrier to deliver items to the purchaser.
The seller charges the purchaser the actual cost of delivery that the third
party carrier charges the seller. The delivery charge from the seller to the
purchaser is a taxable charge. |
| (b) |
A seller of taxable tangible personal property arranges for a third party
carrier to deliver items to the purchaser. The carrier bills the purchaser
directly, and the purchaser pays the carrier directly. The delivery charge is
not taxable. |
| (c) |
An individual pays
a moving company to move his furniture from his home to a storage facility. The
charge made by the moving company for the transportation of tangible personal
property is not taxable because it is not associated with the taxable sale of
tangible personal property. Charges made by the moving company for moving
boxes, packing paper, and other tangible personal property are subject to sales
tax. |
| (d) |
The purchaser of taxable
tangible personal property arranges with a third party carrier to pick up items
at the seller's location and deliver the items to the purchaser. As in examples
(b) and (c), the delivery charge is not taxable because the carrier, rather
than a seller of tangible personal property, is making the charge. |
| (e) |
A retailer purchases inventory for resale
and pays a delivery charge to the vendor. Because the purchase is a nontaxable
purchase for resale, the delivery charge is not taxable. |
| (f) |
A retailer purchases tax exempt inventory
for resale and taxable items for use in the retailer's business. The tax exempt
property is $75 and 75 pounds, and the taxable property is $25 and 25 pounds.
The seller delivers the items in one shipment for a fee of $6. The seller may
either charge tax on the entire $6 delivery fee or charge tax on 25% ($1.50) of
the delivery fee based on either (i) the percentage of the sales price of the
taxable property compared to the total sales price of all property in the
shipment (25%), or (ii) the percentage of the total weight of the taxable
property compared to the total weight of all property in the shipment
(25%). |
|
| (1) |
Funeral directors and undertakers are
considered to be in the dual capacity of rendering services and selling
tangible personal property. Their sales are taxable as follows:
| (a) |
Except as provided for in paragraph (b)
of this regulation, the tax applies to the retail sales price of all tangible
personal property furnished in a funeral service. |
| (b) |
Funeral merchandise, outer burial
containers and cemetery markers as defined in O.C.G.A. § 43-18-1 are exempt when purchased
with funds received from the Georgia Crime Victims Emergency Fund under Chapter
15 of Title 17 of the Official Code of Georgia Annotated. This includes but is
not limited to caskets or alternative containers, vaults, crypts and wooden
enclosures. Funeral directors, undertakers, cemeteries and crematoriums must
maintain sufficient documentation that the purchases are made with funds
received from the Georgia Crime Victims Emergency Fund. |
| (c) |
Equipment and supplies, including but not
limited to ambulances, hearses, embalming materials, and chapel furnishings are
deemed purchases for use or consumption by undertakers and funeral directors
and are taxable at the time of purchase. |
| (d) |
When a funeral director or undertaker
conducts a funeral in Georgia and furnishes tangible personal property, the
delivery of which takes place in this State, the tax applies notwithstanding
interment occurring in another State. |
|
| (2) |
Cemeteries and Crematoriums.
| (a) |
The tax applies to all sales of tangible
personal property by cemeteries and crematoriums, including boxes, urns,
markers, vases and flowers. |
| (b) |
The
tax applies to purchases of equipment and supplies for use and consumption by
cemeteries and crematoriums. Such purchases include, but are not limited to,
materials and supplies used in construction, maintenance, improvement or
alteration of buildings and grounds; also seeds, insecticides, plants and
fertilizers. |
|
| (3) |
The
sale of lots, crypts and niches are real property transactions not subject to
the tax. |
Furniture and storage warehousemen are primarily engaged in
the business of moving, storing, packing, and delivering tangible personal
property belonging to other persons. These activities constitute services and
proceeds therefrom are not subject to the tax. Crating, boxing, packing
materials, etc., purchased by warehousemen for use in the performance of such
services are taxable. Warehousemen are required to collect and remit the tax on
retail sales of furniture or other tangible personal
property.
Golf, country and other social clubs are required to register
as dealers and to collect and remit the tax on all sales at retail, including
separate charges for swimming, green fees and the like. The tax applies to
purchases of tangible personal property by such clubs for use or consumption,
including, but not limited to, equipment, seeds, plants, fertilizer, etc., for
improvement and beautification.
| (1) |
Hospitals, sanitariums and nursing homes
are primarily engaged in the business of rendering services and are deemed
users or consumers of all tangible personal property purchased for use or
consumption in connection with the operation of the institution. They are
required to pay the tax at the time of purchase, unless specifically exempt by
law. They shall pay the tax to registered vendors; however, if a vendor fails
to charge the tax, the purchaser shall be liable for the payment of the tax
directly to the State. |
| (2) |
Sales of
tangible personal property to hospitals, sanitariums and nursing homes owned
and operated by the Federal government, the State of Georgia, any county or
municipality of the state of Georgia, and hospital authorities created under
the provisions of Section 88-1803, Georgia Health Code, are exempt. |
| (3) |
When a hospital, hospital authority,
sanitarium or hospital organization, through any division or department,
engages in selling tangible personal property, it must register as a dealer,
collect, report and remit the tax. |
| (4) |
Private nonprofit licensed nursing homes,
general hospitals and mental hospitals coming within the provisions of Rule
may apply for an
exemption. |
| (1) |
The tax applies to charges for rooms,
lodgings or accommodations furnished to transients by hotels, motels, tourist
camps, or any other place in which such accommodations are furnished. However,
the tax shall not apply to rooms, lodgings or accommodations supplied for a
period of 90 continuous days or more. |
| (2) |
The tax applies to sales or rentals of
tangible personal property by such businesses, including food, beverage, radio
and television. |
| (3) |
Purchases of
furniture, linens, carpeting, drapes, and other tangible personal property by
such businesses are taxable at the time of purchase. |
| (4) |
Charges for parking spaces in trailer
parks are not subject to the tax. |
The tax does not apply to charges for professional services
rendered by an interior decorator. When a decorator goes beyond the rendition
of services and sells tangible personal property, the decorator shall register
as a dealer, collect and remit the tax on retail sales. When a decorator makes
a lump sum charge for professional services and furnishes tangible personal
property, the tax applies to the total charge, unless the charge for
professional services is billed separately from the tangible personal
property.
| (1) |
The tax applies to:
| (a) |
All sales at retail of tangible personal
property, the delivery of which takes place in Georgia, regardless of any
subsequent employment or use thereof in interstate commerce; and |
| (b) |
The first use in Georgia of tangible
personal property bought elsewhere in a transaction which would have been taxed
had the transaction occurred in Georgia, provided such property has become a
part of the mass of the property in this State, irrespective of the fact that
such property may have been, or may be used in interstate commerce. |
| (c) |
The tax due under (b) above is subject to
the credit for like taxes paid elsewhere, if under reverse circumstances the
other state would grant credit for like taxes paid to the State of
Georgia. |
|
| (2) |
The tax
does not apply to:
| (a) |
Deliveries of tangible
personal property outside the State in the seller's vehicle when a valid
Certificate of Exemption (Form ST-6) is secured; |
| (b) |
Deliveries of tangible personal property
outside the State by use of an independent trucker hired by the seller when a
valid Certificate of Exemption (Form ST-6) is secured; |
| (c) |
Deliveries of tangible personal property
to a common carrier or to the U.S. Post Office for transportation outside the
State; |
| (d) |
Purchases for resale and
immediate transportation out of this State by a dealer properly registered in
another state, provided a valid Certificate of Exemption (Form ST-4) is secured
by the Georgia seller; |
| (e) |
Purchases of aircraft, watercraft, motor vehicles and other transportation
equipment manufactured or assembled in this State if sold by the manufacturer
or assembler for use exclusively outside this State and if possession is taken
from the manufacturer or assembler by the purchaser within this State for the
sole purpose of removing the same from this State under its own power when it
does not lend itself more reasonably to removal by other means. |
| (f) |
Purchases of aircraft parts (other than
parts and materials described below which are consumed or installed on aircraft
while in Georgia) when (1) the delivery terms are "F.O.B. buyer's aircraft,
(City), Georgia," or terms with the same meaning, and
(2) the parts are delivered by the seller directly on board the foreign
purchaser's aircraft (3) for immediate exportation outside the United States
(4) pursuant to an export license issued by the federal government and (5) such
parts are actually transported outside the United States as soon as practicable
after loading onto the aircraft without any use in Georgia or diversion to any
other state. The tax shall apply to parts and materials which are installed on
or in an aircraft while in Georgia or used or consumed in repairing or
servicing an aircraft when the aircraft is repaired or serviced in
Georgia. |
|
The tax does not apply to charges for the keep of pets.
Operators of kennels, stables and pet shops are required to pay the tax on
purchases of tangible personal property used in such operations. Sales of
horses, dogs, animals, goldfish and other pets are subject to the tax, unless
purchased for resale or otherwise exempt.
| (1) |
The tax applies to all tangible personal
property purchased by laundries and dry cleaners to be used in the furnishing
of services, including machinery, equipment, repair parts, materials and
supplies. Services rendered by such persons are not taxable. However, when such
operators go beyond the rendition of services and make sales of clothing or
other articles of tangible personal property, they must register as dealers,
collect and remit the applicable tax. |
| (2) |
The tax does not apply to receipts from
coin operated laundry and dry cleaning devices. The tax does apply to all
tangible personal property purchased by coin operated laundries to be used in
the furnishing of laundry services, including machinery, equipment, repair
parts, materials and supplies. |
Persons engaged in the business of furnishing coats, caps,
aprons, dresses, uniforms, smocks, towels, linens, diapers and similar articles
to barber shops, beauty parlors work shops, and other establishments and to
individuals under agreements which provide for a service to be rendered in the
periodic cleaning or laundering of such articles, are lessors of tangible
personal property and are required to collect the tax upon the gross rental
receipts. Items which are used exclusively for rental purposes are purchased
tax exempt. All other purchases of tangible personal property for use in
connection with these rentals are taxable.
Loan companies, finance companies and others making sales of
tangible personal property are required to collect and remit the applicable tax
as dealers irrespective of the fact that such property may have been
repossessed or obtained by default of borrowers.
The tax does not apply to compensation paid by common
carriers to their customers for tangible personal property which is lost or
damaged while in possession of such carriers. However, if a common carrier
retains such property and converts it to its own use, the carrier shall pay the
tax on the salvage value. When a common carrier sells damaged or unclaimed
property, it must collect and remit the applicable tax.
| (1) |
Purpose. This Rule explains
the sales and use tax exemptions in O.C.G.A § 48-8-3.2 for machinery and
equipment necessary and integral to the manufacture of tangible personal
property in a manufacturing plant, for repair and replacement parts associated
with such machinery and equipment, and for industrial materials and packaging
supplies. |
| (2) |
Definitions. For purposes of this Rule, the following definitions
and explanations apply:
| (a) |
"Consumable
supplies" means tangible personal property, other than machinery, industrial
materials, packaging supplies, and energy, that is consumed or expended during
the manufacture of tangible personal property. The term includes but is not
limited to water treatment chemicals for use in, on, or in conjunction with
machinery or equipment and items that are readily disposable. |
| (b) |
"Energy" means natural or artificial gas,
oil, gasoline, electricity, solid fuel, wood, waste, ice, steam, water, and
other materials necessary and integral for heat, light, power, refrigeration,
climate control, processing, or any other use in any phase of the manufacture
of tangible personal property. The term excludes energy purchased by a
manufacturer that is primarily engaged in producing electricity for
resale. |
| (c) |
"Equipment" means
tangible personal property, other than machinery, industrial materials, and
energy. The term "equipment" includes durable devices and apparatuses that are
generally designed for long-term continuous or repetitive use. The term also
includes consumable supplies. Examples of equipment include but are not limited
to machinery clothing, cones, cores, pallets, hand tools, tooling, molds, dies,
waxes, jigs, patterns, conveyors, safety devices, and pollution control
devices. The term includes components and repair or replacement parts. The term
"equipment" excludes real property. |
| (d) |
"Fixtures" means tangible personal
property that has been installed or attached to land or to any building thereon
and that is intended to remain permanently in its place. A consideration for
whether tangible property is a fixture is whether its removal would cause
significant damage to such property or to the real property to which it is
attached. Fixtures are classified as real property. Examples of fixtures
include but are not limited to plumbing, lighting fixtures, slabs, and
foundations. |
| (e) |
"Industrial
materials" means materials that are purchased for future processing,
manufacture, or conversion into articles of tangible personal property for
resale when the industrial materials become a component part of the finished
product. The term also means materials that are coated upon or impregnated into
the product at any stage of its processing, manufacture, or conversion, even
though such materials do not remain a component part of the finished product
for sale. The term "industrial materials" includes raw materials. |
| (f) |
"Local sales and use tax" means any sales
or use tax that is levied and imposed in an area consisting of less than the
entire state. |
| (g) |
"Machinery" means
an assemblage of parts that transmits force, motion, and energy one to the
other in a predetermined manner to accomplish a specific objective. The term
"machinery" includes a machine and all of its components, including but not
limited to belts, pulleys, shafts, gauges, gaskets, valves, hoses, pipes,
wires, blades, bearings, operational structures attached to the machine
including stairways and catwalks, and other devices that are required to
regulate or control the machine, allow access to the machine, or to enhance or
alter its productivity or functionality. The term "machinery" includes repair
or replacement parts. The term excludes real property, energy, and consumable
supplies. |
| (h) |
"Machinery clothing"
means felts, screen plates, wires or any other items used to carry, form, or
dry work in process through the manufacture of tangible personal
property. |
| (i) |
"Manufacture of
tangible personal property," used synonymously with the term "manufacturing,"
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, for promotional use, or further manufacturing that
have a different form, configuration, utility, composition, or character. The
term includes but is not limited to the storage, preparation, or treatment of
industrial materials; assembly of finished units of tangible personal property
to form a new unit or units of tangible personal property; movement of
industrial materials and work in process from one manufacturing operation to
another; temporary storage between two points in a continuous manufacturing
operation; random and sample testing that occurs at a manufacturing plant; and
a packaging operation that occurs at a manufacturing plant. |
| (j) |
"Manufacturer" means a person or
business, or a location of a person or business that is engaged in the
manufacture of tangible personal property for sale, promotional use, or further
manufacturing.
| 1. |
To be considered a
manufacturer, the person or business, or the location of a person or business,
must be:
| (i) |
Classified as a manufacturer
under the 2007 North American Industrial Classification System Sectors 21, 31,
32, or 33; or North American Industrial Classification Systems industry code
22111 or specific code 511110; or |
| (ii) |
Generally regarded as a
manufacturer. |
|
| 2. |
Businesses that are primarily engaged in providing personal or professional
services, or in the operation of retail outlets, generally including but not
limited to grocery stores, pharmacies, bakeries, or restaurants, are not
considered manufacturers. |
|
| (k) |
"Manufacturing plant" means any facility,
site, or other area where a manufacturer engages in the manufacture of tangible
personal property. |
| (l) |
"Packaging
operation" means 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 at or among manufacturing plants for further
manufacturing, and the movement of such finished goods or work in process to a
storage or distribution area at a manufacturing plant. |
| (m) |
"Packaging supplies" means materials,
whether reusable or single-use, used in a packaging operation solely for
packaging tangible personal property. The term includes but is not limited to
containers, sacks, boxes, wraps, fillers, cones, cores, pallets, and bags. The
term also includes such items as labels, invoices, packing slips, tags, and
plates affixed to the product or affixed to or inserted into product
packaging. |
| (n) |
"Real property"
means land, any buildings thereon, and any fixtures attached thereto. |
| (o) |
"Repair or replacement part" means a part
that is used to maintain, repair, restore, install, or upgrade machinery or
equipment that is necessary and integral to the manufacture of tangible
personal property. Examples of repair and replacement parts may include but are
not limited to oils, greases, hydraulic fluids, coolants, lubricants, machinery
clothing, molds, dies, waxes, jigs, and other interchangeable
tooling. |
| (p) |
"Substantial purpose"
means the purpose for which an item of tangible personal property is used more
than one-third of the total amount of time that the item is in use.
Alternatively, instead of time, the purpose may be measured in terms of other
applicable criteria such as the number of items produced. |
|
| (3) |
Machinery and Equipment Exemption. The
sale, use and storage of machinery or equipment that is necessary and integral
to the manufacture of tangible personal property are exempt from sales and use
tax.
| (a) |
General requirements. In order to
qualify for the manufacturing machinery and equipment exemption in O.C.G.A
§ 48-8-3.2, the property purchased
or leased must:
| 1. |
Have the character of
machinery or equipment, or of repair or replacement parts to machinery or
equipment, at the time of sale or lease, or consist of components which, when
assembled, will have the character of machinery or equipment; |
| 2. |
Be used at a manufacturing plant;
and |
| 3. |
Be necessary and integral to
the manufacture of tangible personal property for sale, for promotional use, or
further manufacturing. |
|
| (b) |
Leases. The exemption under O.C.G.A
§ 48-8-3.2 applies to all lease
payments for machinery or equipment made on or after the date that the
machinery or equipment qualifies for the exemption, even if the machinery or
equipment did not qualify for the exemption at the date of lease
inception. |
| (c) |
Parts withdrawn from
inventory. Miscellaneous spare parts, the ultimate use of which is unknown at
the time of purchase, are eligible for the exemption as components or repair or
replacement parts. However, use tax must be accrued and remitted if spare parts
are withdrawn from the inventory of spare parts and used for any purpose other
than to maintain, repair, restore, install, or upgrade machinery or equipment
that is necessary and integral to the manufacture of tangible personal
property. |
| (d) |
Application of
Machinery and Equipment Exemption: Necessary and Integral. When determining
whether machinery or equipment is necessary and integral to the manufacture of
tangible personal property, the Commissioner shall evaluate the facts and
circumstances of each case.
| 1. |
Examples of
machinery or equipment that generally does not qualify as necessary and
integral to the manufacture of tangible personal property at any time include
but are not limited to:
| (i) |
Motor vehicles
that are required to be registered for operation on public highways; |
| (ii) |
Power lines or transformers that bring
electricity into a manufacturing plant; |
| (iii) |
Real property. Examples include but are
not limited to concrete slabs and foundations, and structures or fixtures used
for general manufacturing plant ventilation, heating, cooling, illumination,
communications, plumbing, or the personal comfort and convenience of the
manufacturer's employees; |
| (iv) |
Storage tanks, containers, racking systems, or other machinery or equipment
used to handle, store, or distribute finished goods upon completion of the
packaging operation unless exempted by another code section; |
| (v) |
Administrative machinery or equipment
including computers, related computer peripherals, servers, copiers,
telephones, facsimile machines, office furniture, office furnishings, office
supplies such as paper and pencils, and educational materials used for
non-manufacturing functions, including but not limited to sales, marketing,
research and development, accounting and payroll, purchasing, finished goods
inventory control, warehousing, and distribution; |
| (vi) |
Machinery or equipment that is not
operated under the control of the manufacturer's employees or other persons
under the manufacturer's direction and control. Customer self-service or
vending machinery or equipment is not considered to be operated under the
manufacturer's direction and control; and |
| (vii) |
Machinery or equipment used in
quarrying and mining for site preparation, including the removal and clearing
of overburden. |
|
| 2. |
Examples of machinery or equipment that generally qualifies as necessary and
integral to the manufacture of tangible personal property include but are not
limited to:
| (i) |
Machinery or equipment used to
convey or transport industrial materials, work in process, consumable supplies,
or packaging supplies at or among manufacturing plants, or to convey and
transport finished goods to a distribution or storage point at the
manufacturing plant. Specific examples may include but are not limited to
forklifts, conveyors, cranes, hoists, and pallet jacks; |
| (ii) |
Machinery or equipment used to gather,
arrange, sort, mix, measure, blend, heat, cool, clean, or otherwise treat,
prepare, or store industrial materials for further manufacturing; |
| (iii) |
Machinery or equipment used to control,
regulate, heat, cool, or produce energy for other machinery or equipment that
is necessary and integral to the manufacture of tangible personal property.
Specific examples may include but are not limited to boilers, chillers,
condensers, water towers, dehumidifiers, humidifiers, heat exchangers,
generators, transformers, motor control centers, solar panels, air dryers, and
air compressors; |
| (iv) |
Testing and
quality control machinery or equipment located at a manufacturing plant used to
test the quality of industrial materials, work in process, or finished
goods; |
| (v) |
Starters, switches,
circuit breakers, transformers, wiring, piping, and other electrical
components, including associated cable trays, conduit, and insulation, located
between a motor control center and exempt machinery or equipment, or between
separate units of exempt machinery or equipment; |
| (vi) |
Machinery or equipment used to provide
safety for the employees working at a manufacturing plant or to protect the
quality of the product, including but not limited to safety machinery and
equipment required by federal or state law, gloves, ear plugs, face masks,
protective eyewear, hard hats or helmets, or breathing apparatuses; |
| (vii) |
Machinery or equipment used to
condition air or water to produce conditions necessary for the manufacture of
tangible personal property, including water treatment systems; |
| (viii) |
Machinery or equipment used in
quarrying and mining activities, including blasting, extraction, and
crushing; |
| (ix) |
Machinery or
equipment, including repair, replacement and component parts, used to maintain,
clean, repair, restore, install, upgrade or manufacture machinery or equipment
that is necessary and integral to the manufacture of tangible personal
property; |
| (x) |
Machinery or
equipment used in pollution control, sanitizing, sterilizing, or recycling
processes. Pollution control machinery or equipment that is necessary and
integral to the manufacture of tangible personal property is not required to be
certified by the Environmental Protection Division, Georgia Department of
Natural Resources as being adequate and necessary for the purpose of
eliminating or reducing air or water pollution; and |
| (xi) |
Maintenance and replacement parts for
machinery or equipment, stationary or in transit, used to mix, agitate, and
transport freshly mixed concrete in a plastic and unhardened state, including
but not limited to mixers and components, engines and components, interior and
exterior operational controls and components, hydraulics and components, all
structural components, and all safety components.
| (I) |
Sales and use taxes on motor fuel used as
energy in a concrete mixer truck are not exempt or refundable. |
| (II) |
Subparagraph (3)(d)2.(xi) is effective
for the period commencing on July 1, 2021, and ending on June 30,
2031. |
|
|
| 3. |
For
machinery or equipment that has multiple purposes, some purposes necessary and
integral to the manufacture of tangible personal property, and some purposes
not necessary and integral to the manufacture of tangible personal property,
the substantial purpose of such machinery or equipment will prevail for
purposes of determining the eligibility for exemption. The Commissioner may
consider any reasonable methodology for measuring the substantial purpose of
machinery or equipment for which the substantial purpose is not readily
identifiable. |
|
| (e) |
Application of Machinery and Equipment Exemption: Manufacture of Tangible
Personal Property. The manufacture of tangible personal property commences as
industrial materials are received at a manufacturing plant and concludes once
the packaging operation is complete and the tangible personal property is ready
for sale or shipment, regardless of whether the manufacture of tangible
personal property occurs at one or more separate manufacturing plants.
Examples of activities that are not considered the
manufacture of tangible personal property:
| 1. |
Research and development
activities; |
| 2. |
Storage, general
handling, and distribution of finished goods inventory; and |
| 3. |
Any other activity that occurs prior to
industrial materials being received at a manufacturing plant or after the
completion of the packaging operation at a manufacturing plant. |
|
|
| (4) |
Industrial Materials
Exemption. The sale, use, storage, and consumption of industrial materials are
exempt from sales and use tax. In order to qualify for the exemption, the
materials must be used for the processing or manufacture of, or conversion
into, articles of tangible personal property; and the industrial materials
must:
| (a) |
become a component part of the
finished product or |
| (b) |
be coated
upon or impregnated into the product at any stage of its processing,
manufacture, or conversion, even though such materials do not remain a
component part of the finished product for sale. |
|
| (5) |
Exemption for Packaging Supplies. The
sale, use, storage, or consumption of packaging supplies is exempt from sales
and use tax. |
| (6) |
Certificates of
Exemption.
| (a) |
Any person making a sale or
lease of machinery or equipment (including components and repair or replacement
parts) that is necessary and integral to the manufacture of tangible personal
property, packaging supplies, or industrial materials must collect sales tax
unless such person takes a direct pay permit from the purchaser or lessee or,
in good faith, accepts from the purchaser or lessee a properly completed Form
ST-5M Certificate of Exemption. |
| (b) |
Where a certificate of exemption or direct pay permit has not been previously
obtained and submitted and tax is remitted on the purchase or lease of exempt
property, the purchaser or lessee may apply to the Commissioner for a refund of
such tax. |
|
| (7) |
Agriculture
Producers. Every person defined as a dealer in O.C.G.A. § 48-8-2 is required to file a sales
and use tax registration for each place of business in this state. A dealer
that performs both manufacturing and agricultural operations at a single place
of business may avail itself of the exemptions under either O.C.G.A. § 48-8-3.2 or O.C.G.A. § 48-8-3.3, but not both, for that
place of business in any one calendar year. |
| (1) |
Purpose. This Rule addresses the sales and use tax exemptions for
Energy used in manufacturing. |
| (2) |
Definitions. The terms defined in Rule
entitled
"Manufacturing Machinery and Equipment, Industrial Materials, and Packaging
Supplies" apply to this Rule. In addition, for purposes of this Rule, "Energy"
means natural or artificial gas, oil, gasoline, electricity, solid fuel, wood,
waste, ice, steam, water, and other materials necessary and integral for heat,
light, power, refrigeration, climate control, processing, or any other use in
any phase of the manufacture of tangible personal property. The term excludes
energy purchased by a manufacturer that is primarily engaged in producing
electricity for resale. |
| (3) |
Exemption under O.C.G.A § 48-8-3.2.
| (a) |
Requirements. Except as otherwise
provided in this paragraph, the sale and use of Energy are exempt from sales
and use tax if the Energy is:
| 1. |
necessary and
integral to the manufacture of tangible personal property and |
| 2. |
sold, used, stored, or consumed at a
manufacturing plant in Georgia. |
|
| (b) |
Energy used to produce electricity. This
exemption does not apply to energy purchased by a manufacturer that is
primarily engaged in producing electricity for resale. |
| (c) |
Sales and use tax for educational
purposes. Energy otherwise exempt under O.C.G.A § 48-8-3.2 is not exempt from the
sales and use tax for educational purposes levied pursuant to Part 2 of Article
3 of Chapter 8 and Article VIII, Section VI, Paragraph IV of the Constitution
or from local sales and use taxes for educational purposes authorized by or
pursuant to local constitutional amendment. |
|
| (4) |
Exemption from the Special District
Transportation Sales and Use Tax and the Special District Mass Transportation
Sales and Use Taxes.
| (a) |
Requirements. Except
as otherwise provided in this paragraph, the sale and use of Energy are exempt
from the Special District Transportation Sales and Use Tax (O.C.G.A. Title 48,
Chapter 8, Article 5) and the Special District Mass Transportation Sales and
Use Taxes (O.C.G.A. Title 48, Chapter 8, Article 5A, Parts 1, 2, and 3) if the
Energy is:
| 1. |
necessary and integral to the
manufacture of tangible personal property and |
| 2. |
sold, used, stored, or consumed at a
manufacturing plant. |
|
| (b) |
No phase-in period. This exemption is not subject to a phase-in
period. |
| (c) |
Energy used to produce
electricity. This exemption does not apply to energy purchased by a
manufacturer primarily engaged in producing electricity for resale. |
|
| (5) |
Scope of the exemptions:
Necessary and integral to the manufacture of tangible personal property. Energy
used for any purpose at a manufacturing plant is considered necessary and
integral to the manufacture of tangible personal property. This includes, for
example, Energy used:
| (a) |
to operate machinery
or equipment; |
| (b) |
to create
conditions necessary for the manufacture of tangible personal
property; |
| (c) |
to perform an actual
part of the manufacture of tangible personal property; |
| (d) |
in administrative or other ancillary
activities that are located and performed at the manufacturing plant; |
| (e) |
in related operations that convey,
transport, handle, or store raw materials or finished goods at the
manufacturing plant; and |
| (f) |
for
heating, cooling, ventilation, illumination, fire safety or prevention, or
personal comfort and convenience of the manufacturer's employees at the
manufacturing plant. |
|
| (6) |
Examples.
| (a) |
A manufacturer uses
fuel gases to perform repairs for unrelated parties at a Georgia manufacturing
plant. The fuel gases are not exempt because they are not used in the
manufacture of tangible personal property and, therefore, do not meet the
definition of "Energy." |
| (b) |
A
manufacturer uses fuel gases to perform repairs to its own machinery and
equipment at a Georgia manufacturing plant. The fuel gases are exempt to the
extent provided in this Rule because they are used in the manufacture of
tangible personal property. |
|
| (7) |
Certificates of exemption.
| (a) |
Any person making a sale of Energy that
is necessary and integral to the manufacture of tangible personal property must
collect sales and use tax unless the purchaser furnishes the supplier with a
properly completed certificate of exemption or a direct pay permit. |
| (b) |
Where a certificate of exemption or
direct pay permit has not been previously obtained and submitted and tax is
remitted on the sale of exempt Energy, the purchaser may apply to the
Commissioner for a refund of such tax. |
|
| (8) |
Transaction date. For purposes of this
Rule, a transaction occurs on the date of purchase or, in the case of Energy
billed on a monthly basis, on the billing date. |
| (1) |
The tax applies
to the sale of food and food ingredients or other tangible personal property by
railroad, pullman car, steamship, airline, or other transportation companies
while operating in the State of Georgia or Georgia waters. The tax applies to
food and food ingredients delivered to carriers in this State to be furnished
complimentary to passengers regardless of where served. |
| (2) |
Fraternities, sororities and other
student societies, with members residing at a common location and jointly
sharing household expenses, including food and food ingredients, are not
considered to be selling at retail; and furnishing food and food ingredients to
members is not taxable. Sales of food and food ingredients and other tangible
personal property to these organizations are sales at retail and subject to the
tax. Caterers or other persons selling food and food ingredients to
fraternities and sororities are required to collect and remit the tax on the
sales price thereof. |
| (3) |
Retail
sales of food and food ingredients by restaurants, hotels, clubs, cafes,
caterers, boarding houses, and others are taxable. Cover, minimum and room
service charges, and mandatory tips and gratuities are deemed a part of the
sales price and are subject to the tax. |
| (4) |
Food and food ingredients sold or
provided without charge to employees.
| (a) |
Food and food ingredients sold to employees.
| 1. |
The sale of food and food ingredients by
an employer to an employee is subject to Georgia sales tax on the total sales
price charged to the employee. The following examples illustrate the
application of Georgia sales and use tax to such transactions:
| (i) |
An employer allows an employee to
purchase a $15.00 meal from the menu at a fifty percent (50%) discount. The
employer is required to charge Georgia sales tax to the employee on
$7.50. |
| (ii) |
An employer provides a
meal to an employee and declares $5.00 as a part of the employee's
compensation. The employer is required to charge sales tax to the employee on
$5.00. |
|
|
| (b) |
Food and food ingredients provided without charge by employer.
| 1. |
Food and food ingredients provided by an
employer without charge to an employee are taxable to the employer. The
employer must remit use tax on the cost as shown in the employer's books and
records. The following examples illustrate the application of sales and use tax
to such transactions:
| (i) |
An employer
provides a $15.00 meal off the menu at no charge to an employee. The employer
is responsible for use tax on the cost price of the food purchased to prepare
the meal. |
| (ii) |
An employer provides
a meal and beverage that is prepared especially for employees. The meal and
beverage is provided at no charge to the employee. The employer paid Georgia
sales tax on the items used to prepare the meal and beverage when purchased
from the supplier. No additional tax is due from the employer on the items used
to prepare the employee's meal and beverage. |
| (iii) |
An employer allows an employee to have
soft drinks during work hours without charge. The employer purchased the soft
drinks under terms of resale. The employer will be responsible for use taxes on
the cost price of all soft drinks provided to employees. |
|
| 2. |
In the event the exact cost of the
employee's food and food ingredients is not represented in the employer's
records, the cost shall be deemed to be fifty percent (50%) of the retail sales
price of the food and food ingredients. |
|
|
| (1) |
The tax applies to retail sales of
memorial stones and monuments, without deduction for labor used in cutting and
marking the same. The installation or erection charge, if separately stated, is
not taxable but the person making the installation shall pay the tax on the
materials purchased for use in such installation at the time of
purchase. |
| (2) |
If the installation
or erection charge is not separately stated, the tax applies to the entire
sales price. |
Painters and paperhangers perform services not taxable under
the Act. They are consumers of all tangible personal property used by them and
shall pay the tax on purchases of paint, wallpaper, supplies, equipment,
etc.
The tax applies to retail sales of tangible personal property
by pawnbrokers, lien holders, mortgagees, etc. The manner in which such
property was acquired does not affect the taxability of the
sale.
| (1) |
Except as
otherwise provided in paragraph (2) of this regulation, persons engaged in
retail selling of tangible personal property, whether from private residences,
through stores, from trucks or wagons, by house to house canvassing, or in any
other manner whatsoever, are required to file application for certificate of
registration and to collect and remit any tax due the state. |
| (2) |
In the case of peddlers, street
merchants, persons who sell at retail from other than established places of
business, and persons described in Ga. Code § 91A-4501(f)(7) [and any
successor of said statute], as now or hereafter amended, the vendor of such
persons shall collect the tax imposed by the Act from said vendee on the retail
price to be charged by the vendee, and said vendor shall remit the tax to the
Commissioner. In such instances the Commissioner will not issue a certificate
of registration to the peddler, street merchant or other such person, and
failure of any vendor to comply with this regulation shall subject the vendor
to loss of his registration certificate. |
| (3) |
Any person described in paragraph (1) or
(2) of this regulation who is unsure as to whether he must register as a dealer
or as to whether he is required under this regulation to collect and remit the
tax on sales to persons for resale is charged with the burden of making
application and requesting a ruling of the Commissioner as provided in
. |
| (1) |
Gasoline sold at retail for any purpose
and other motor fuels sold for on the highway use only are subject to the 4%
State tax rate, of which 3% is a Motor Fuel Tax and 1% is a State Sales and Use
Tax. Sales of motor fuels, other than gasoline, for non-highway use are subject
to the 4% State Sales and Use Tax. |
| (2) |
Retailers of gasoline sold for any
purpose and other motor fuels for on-the-highway use only shall exclude the
State Motor Fuel Excise Tax imposed thereon before computing the 3% Second
Motor Fuel Tax. (See Regulation
.) |
| (3) |
Sales for resale of gasoline and of other
motor fuels are exempt from the 4% State Tax provided the seller secures from
the purchaser in good faith a properly executed Certificate of Exemption (Form
ST-5). |
| (4) |
Retailers making sales
of such fuels by means of a metered pump, which, in process of delivery,
computes the total sales price, may elect to collect the 4% State Tax in
addition to the sales price shown on the metered pump, or include the 4% State
Tax in the metered pump price. |
| (5) |
Retailers electing to collect the 4% State Tax in addition to the sales price
indicated on metered pumps shall post on such pumps and other signs or placards
used to advertise the price, a notice to the effect that the 4% State Tax is in
addition to the price indicated on such pump. |
| (6) |
Retailers electing to include the 4%
State Tax in the metered pump price shall post on each pump and other signs or
placards used to advertise the price, a notice stating such sales price
includes Federal and State Motor Fuel Excise Tax and 4% State Tax. |
| (1) |
The tax applies to sales of photographs,
portraits, prints from camera film, including charges for coloring and tinting,
photostats, blue prints, frames, camera film and other such tangible personal
property. |
| (2) |
The tax applies to
purchases of camera equipment and other tangible personal property by
commercial photographers and other for use or consumption. Paper and other
materials which become component parts of the finished photograph or other such
print for sale, and industrial materials which are coated upon or impregnated
into the product for sale at any stage of the processing, may be purchased
under Certificate of Exemption. The tax does not apply to charges for
developing films and coloring or tinting photographs furnished by customers,
when a separate charge therefor is billed to the customer. Chemicals, paints,
colors, etc. used in rendering such services are purchased for use or
consumption by the person performing the service and are subject to the
tax. |
| (3) |
However, when a single
charge is made for developing films and furnishing prints, the tax applies to
the total charge therefor. Developing chemicals which are coated upon or
impregnated into films in processing may be purchased under a Certificate of
Exemption. |
| (1) |
Donors of tangible personal property are
users or consumers and purchases by them are taxable, including purchases of
gifts for advertising purposes. |
| (2) |
The tax applies to the cost price of property purchased originally for resale
and later used as a gift. |
| (3) |
The
tax applies to purchases of property to be awarded as prizes at the cost price
of such property. |
| (1) |
Custom
Printing:
| (a) |
Custom printing is the
production or fabrication of printed matter, in accordance with a customer's
order or copy, for the customer's use or consumption. |
| (b) |
The sale of custom printing is the sale
of tangible personal property and is subject to the tax imposed by this Act on
the total invoice charge made on the transaction. The total invoice charge
includes the charge made for any engraved, lithoplated, or other type
photo-processed plate, die, or mat, involved in the printing and includes the
charge made for printing and imprinting when the customer furnishes the
printing stock. |
| (c) |
The printer
shall add the amount of the tax on to the invoice charge and shall collect same
as part of the purchase price thereof. He shall register as a dealer under the
Act and shall file monthly sales tax returns with the State Revenue
Commissioner and pay therewith the tax required of him as a retail dealer under
the Act. |
| (d) |
When the tax is not
added on to the invoice charge, or the customer does not pay the amount of the
tax to the printer, as aforesaid, the customer is liable for the amount of the
tax directly to the State Revenue Commissioner. In such case, the customer
shall, on or before the twentieth of the month following such purchase, file
with the State Revenue Commissioner a use tax return showing all of such
transactions for that month and compute thereon and remit therewith the
required tax. |
| (e) |
Purchases by the
printer of ink, printing stock, staples, stapling wire, binding twine, glue,
and other tangible personal property which become a component part of the
printed matter, or are coated upon or impregnated therein, are purchases of
industrial materials and, when properly certificated, are not subject to the
tax imposed by the Act. |
| (f) |
Purchases by the printer of any engraved, photo-processed, lithoplated, or
other type of plate, die, or mat, are purchases for resale when properly
certificated as such, and are exempt from the tax imposed by the Act. However,
to the extent that the printer's invoice to his customer does not indicate that
the sale of the plate, die, or mat is included therein, the plate, die, or mat
will be deemed to have been converted by the printer to his own use, and the
cost price thereof will be subject to the use tax imposed by the Act to be
reported and paid as a taxable use in the manner prescribed hereinafter in
subparagraph (j). |
| (g) |
Purchases by
the printer of typesetting are purchases of services and are not subject to the
tax imposed by the Act. |
| (h) |
Purchases by the printer of machinery, equipment, tools, replacement and repair
parts, type, stock engraved, photo-processed, lithoplated, or other types of
plates, dies, or mats, and supplies, including blotting papers and drying
powders, which do not become a component part of the printed matter, or which
are not coated upon or impregnated therein, are purchases subject to the tax
imposed by the Act. |
| (i) |
The
supplier of items within the scope of subparagraph (h) above shall add the
amount of the tax on to the total invoice charge for such items, and shall
collect same as part of the purchase price thereof. He shall register as a
dealer under the Act and shall file monthly sales tax returns with the State
Revenue Commissioner and pay therewith the tax required of him under said
Act. |
| (j) |
When the tax is not added
on to the invoice charge made by the supplier, or the printer does not pay the
amount of the tax to the supplier, as set forth in subparagraph (i) above, or
when the printer buys for resale and then converts the tangible personal
property to his own use and consumption, as described in subparagraph (f)
above, the printer is liable for the amount of the tax directly to the State
Revenue Commissioner. In such case the printer shall include in his monthly
sales tax return the amount of such purchases and compute thereon and remit
therewith the amount of such tax. |
|
| (2) |
Consumer Printing:
| (a) |
Consumer printing is the production or
fabrication of printed matter for one's own use or consumption and not for
resale. |
| (b) |
Purchases for consumer
printing of the following articles of tangible personal property are purchases
for use and consumption and are subject to the tax imposed by the Act:
Machinery, equipment, tools, replacement and repair parts, type, engraved,
photo-processed, lithoplated or other types of plates, dies, or mats, ink,
printing stock, staples, stapling wire, binding twine, glue, blotting papers,
drying powders and other supplies which become a component part of the printed
matter, or which are coated upon or impregnated therein, or which are used upon
or consumed in the process of the printing or fabrication thereof. |
| (c) |
Purchases of typesetting for consumer
printing are purchases of services and are not subject to the tax imposed by
the Act. |
| (d) |
The supplier of items
within the scope of subparagraph (b) above shall add the amount of the tax on
to the total invoice price thereof. He shall register as a dealer under the Act
and shall file monthly sales tax returns with the State Revenue Commissioner
and pay therewith the tax required of him under the Act. |
| (e) |
When the tax is not added on to the
invoice charge made by the supplier, or the consumer printer does not pay the
amount of the tax to the supplier, as aforesaid, the consumer printer is liable
for the amount of the tax directly to the State Revenue Commissioner. In such
case the consumer printer shall, on or before the twentieth of the month
following such purchase, file with the State Revenue Commissioner a use tax
return showing all of such transactions for that month and compute thereon and
remit therewith the required tax. |
|
| (3) |
Manufacturer Printing:
| (a) |
Manufacturer printing is printing done
upon an article of tangible personal property in the process of its
manufacture. |
| (b) |
Purchases by the
manufacturer-printer of machinery, equipment, tools, replacement and repair
parts, type, and supplies, including blotting papers and drying powders, which
do not become a component part of the manufactured article or which are not
coated upon or impregnated therein, are purchases subject to the tax imposed by
the Act. |
| (c) |
Purchases by the
manufacturer-printer of typesetting are purchases of services and are not
subject to the tax imposed by the Act. |
| (d) |
Purchases by the manufacturer-printer of
ink, printing stock, and other tangible personal property which becomes a
component part of the manufactured article, or which are coated upon or
impregnated therein, are purchases of industrial materials and, when properly
certificated, are not subject to the tax imposed by the Act. |
| (e) |
Purchases by the manufacturer-printer of
any engraved, photo-processed, lithoplated, or other type of plate, die, or
mat, are purchases for his own use and consumption and are subject to the tax
imposed by the Act. Where such a plate, die, or mat is purchased for the
account of a customer, it is nevertheless a purchase for use and consumption
and subject to the tax imposed by the Act. |
| (f) |
The supplier of items within the scope of
subparagraphs (b) and (e) above shall add the amount of the tax on to the total
invoice charge for such items, and shall collect same as part of the purchase
price thereof. He shall register as a dealer under the Act and shall file
monthly sales tax returns with the State Revenue Commissioner and pay therewith
the tax required of him under the Act. |
| (g) |
when the tax is not added on to the
invoice charge made by the supplier, or the printer does not pay the amount of
the tax to the supplier, as set forth in subparagraph (f) above, the
manufacturer-printer is liable for the amount of the tax directly to the State
Revenue Commissioner. In such case the manufacturer-printer shall, on or before
the twentieth of the month following such purchase, file with the State Revenue
Commissioner a use tax return showing all of such transactions for that month
and compute thereon and remit therewith the required tax. |
| (h) |
Where a manufacturer-printer purchases a
plate, die or mat for the account of a customer as described in subparagraph
(e) above, and the supplier does not add on the tax as required by subparagraph
(f), as between the manufacturer-printer and the customer, the liability for
returning and remitting the applicable use tax under subparagraph (g) shall be
determined as follows: The manufacturer-printer shall not be required to return
and remit the applicable use tax if the customer is a resident of, or has a
place of business in, this State, and the State Revenue
Commissioner is satisfied that an agency relationship existed at the time of
such purchase, and the books and records of the
manufacturer-printer show that such purchase was actually made for the customer
and that the customer became the actual owner of such plant, die,
or mat, and the customer is disclosed by name and address on the
invoice of such purchase as principal. If the foregoing conditions do not
exist, the manufacturer-printer personally shall be required to return and
remit the applicable use tax. However, the liability of the
manufacturer-printer for the use tax shall be abated upon payment thereof by
the customer. It is not the purpose of this regulation to interfere with or
modify the legal right, if any, of the manufacturer-printer to be reimbursed by
the customer for taxes incurred and paid in behalf of the customer. |
|
| (4) |
Publisher Printing:
| (a) |
Publisher printing is the printing of
books, newspapers, magazines, or other periodicals for sale by the
publisher-printer for resale or for use and consumption, but not custom
printing. |
| (b) |
A publisher-printer,
making sales of books, etc., for use and consumption, shall add the tax imposed
by the Act on to the charge made therefor and shall collect same as part of the
purchase price thereof. He shall register as a dealer under the Act and shall
file monthly sales tax returns with the State Revenue Commissioner and pay
therewith the tax required of him as a retail dealer under the Act. |
| (c) |
When the tax is not added on to the
charge made therefor, or the customer does not pay the amount of the tax to the
publisher-printer, as aforesaid, the customer is liable for the amount of the
tax directly to the State Revenue Commissioner. In such case, the customer
shall, on or before the twentieth of the month following such purchase, file
with the State Revenue Commissioner a use tax return showing all of such
transactions for that month and compute thereon and remit therewith the
required tax. |
| (d) |
Purchases by the
publisher-printer of ink, printing stock, staples, stapling wire, binding
twine, glue and other tangible personal property which becomes a component part
of the publication, or are coated upon or impregnated therein, are purchases of
industrial materials and, when properly certified, are not subject to the tax
imposed by the Act. |
| (e) |
Purchases
by the publisher-printer of typesetting are purchases of services and are not
subject to the tax imposed by the Act. |
| (f) |
Purchases by the publisher-printer of
machinery, equipment, tools, replacement and repair parts, type, plates, dies,
and supplies, including blotting papers, and drying powders, which do not
become a component part of the publication, or which are not coated upon or
impregnated therein, are purchases subject to the tax imposed by the
Act. |
| (g) |
The supplier of items
within the scope of subparagraph (f) above shall add the amount of the tax on
the total invoice charge for such items, and shall collect same as a part of
the purchase price thereof. He shall register as a dealer under the Act and
shall file monthly sales tax returns with the State Revenue Commissioner and
pay therewith the tax required of him under the Act. |
| (h) |
When the tax is not added on to the
invoice charge made by the supplier, or the printer does not pay the amount of
the tax to the supplier, as set forth in subparagraph (g), the
publisher-printer is liable for the amount of the tax directly to the State
Revenue Commissioner. In such case the publisher-printer shall, on or before
the twentieth of the month following such purchase, file with the State Revenue
Commissioner a use tax return showing all of such transactions for that month
and compute thereon and remit therewith the required tax. |
|
| (5) |
Typesetting:
| (a) |
Purchases by a printer of typesetting are
purchases of personal services and are not subject to the tax imposed by the
Act. |
| (b) |
Purchases by the
typesetter of machinery, equipment, tools, replacement and repair parts, lead,
and all other materials and supplies, irrespective of whether they become a
component part of the "make-up" and irrespective of whether they are coated
upon or impregnated into the "make-up", are purchases subject to the tax
imposed by the Act. |
| (c) |
The
supplier of the items within the scope of subparagraph (b) above shall add the
amount of said tax on to the total invoice charge for such items and shall
collect same as part of the purchase price thereof. He shall register as a
dealer under the Act and shall file monthly sales tax returns with the State
Revenue Commissioner and pay therewith the tax required of him under the
Act. |
| (d) |
When the tax is not added
on to the invoice charge made by the supplier, or the typesetter does not pay
the amount of the tax to the supplier, or both, as aforesaid, the typesetter is
liable for the amount of said tax directly to the State Revenue Commissioner.
In such case the typesetter shall, on or before the twentieth of the month
following such purchase, file with the State Revenue Commissioner a use tax
return showing all of such transactions for that month and compute thereon and
remit therewith the required tax. |
|
| (6) |
Plates, Dies and Mats:
| (a) |
Purchases by a printer of engraved,
photoprocessed, lithoplated, or other types of plates, dies or mats, are
purchases of tangible personal property for resale and, when properly
certificated, are not subject to the tax imposed by the Act. However, to the
extent that the printer's invoice to his customer does not indicate that the
sale thereof is included therein, it will be deemed to have been converted by
the printer to his own use, and the cost price thereof will be subject to the
use tax imposed by the Act to be reported and paid by the printer as a taxable
use in the manner prescribed in Paragraphs (1)(f) and (1)(j) above. |
| (b) |
Purchases of engraved, photo-processed,
lithoplated, or other types of plates, dies or mats by any person other than a
printer are purchases for use and consumption and are subject to the tax
imposed by the Act. Such purchases by an advertising agency are purchases for
its use and consumption in rendering its advertising services. When such
purchases are made by an advertising agency for the account of its customer, it
is nevertheless a purchase for the use and consumption of the customer and is
subject to the tax imposed by the Act. |
| (c) |
The processor of plates, dies or mats,
sold within the scope of subparagraph (b) shall add the amount of the tax on to
the invoice charge and shall collect same as part of the purchase price
thereof. He shall register as a dealer under the Act and shall file monthly
sales tax returns with the State Revenue Commissioner and pay therewith the tax
required of him as a retail dealer. |
| (d) |
When the tax is not added on to the
invoice charge or the purchaser does not pay the amount of the tax to the
processor, as aforesaid, the purchaser is liable for the amount of the tax
directly to the State Revenue Commissioner. In such case, the purchaser shall,
on or before the twentieth of the month following such purchase file with the
State Revenue Commissioner a use tax return showing all of such transactions
for that month and compute thereon and remit therewith the required
tax. |
| (e) |
Where an advertising
agency purchases a plate, die, or mat for the account of a customer, as
described in subparagraph (b) above, and the processor thereof does not add on
the tax as required by subparagraph (c) above, as between the advertising
agency and its customer, the liability for returning and remitting the
applicable use tax under subparagraph (d) shall be determined as follows: The
advertising agency shall not be required to return and remit the applicable use
tax if its customer is a resident of, or has a place of business in, this
State, and the State Revenue Commissioner is satisfied that an
agency relationship existed at the time of such purchase, and the
books and records of the advertising agency show that such purchase was
actually made for the customer, and that the customer became the
actual owner of such plate, die or mat, and the customer is
disclosed by name and address on the invoice of such purchase as principal. If
the foregoing conditions do not exist, the advertising agency personally shall
be required to return and remit the applicable use tax. However, the liability
of the advertising agency shall be abated upon payment thereof by the customer.
It is not the purpose of this regulation to interfere with or modify the legal
right, if any, of the advertising agency to be reimbursed by the customer for
taxes incurred and paid in behalf of the customer. |
| (f) |
Purchases by a processor of such plates,
dies, or mats, of metals, plastics, wood, chemicals, and other supplies, which
become a component part of the finished plate, die, or mat, or which are coated
upon or impregnated therein, are purchases of industrial materials, and, when
properly certificated, are not subject to the tax imposed by the Act. |
| (g) |
Purchases by such a processor of
machinery, tools, replacement and repair parts, film, and other materials and
supplies which do not become a component part of the finished plate, die, or
mat or are not coated upon or impregnated therein are purchases subject to the
tax imposed by the Act. |
| (h) |
The
supplier of items within the scope of subparagraph (g) above shall add the
amount of said tax on to the total invoice charge for such items, and shall
collect same as part of the purchase price thereof. He shall register as a
dealer under the Act and shall file monthly sales tax returns with the State
Revenue Commissioner and pay therewith the tax required of him under the
Act. |
| (i) |
When the tax is not added
on to the invoice charge made by the supplier, or the processor does not pay
the amount of the tax to his supplier, as aforesaid, the processor is liable
for the amount of the tax directly to the State Revenue Commissioner. In such
case, the processor shall on or before the twentieth of the month following
such purchase, file with the State Revenue Commissioner a use tax return
showing all such transactions for that month and compute thereon and remit
therewith the required tax. |
|
| (1) |
Publishers of
newspapers, magazines, periodicals, etc. are required to collect and remit the
tax on sales to persons other than registered dealers. Publications sold by
subscription are subject to the tax based on the subscription price. |
| (2) |
Charges for advertising in newspapers,
magazines and periodicals are not subject to the tax. |
| (3) |
Industrial materials, including paper and
ink, which become component parts of the publication for sale, or which are
coated upon or impregnated into the product at any stage of processing, may be
purchased tax exempt under Certificates of Exemption. However, publishers must
pay the tax on other property used or consumed in the process, including
supplies, machinery, equipment, photo engravings, mats, plates and
lead. |
| (1) |
Replacement parts, materials, and
supplies used or consumed by repairmen in repairing tangible personal property
belonging to others are taxable either to the person performing the work or to
the owner of the property being repaired, on the following basis:
| (a) |
If the dealer performing the repair work
does not state separately, itemize or segregate at a fixed or retail price the
materials and supplies so used or consumed, the tax will apply to the total
charge for such materials and labor. |
| (b) |
If the dealer performing the repair work
does separate, itemize, and invoice at a retail selling price the parts,
materials and supplies used, stating separately the amount for labor, the tax
will apply to the retail selling price of the materials and supplies listed and
itemized. |
|
| (2) |
The
foregoing applies to dealers engaged in the business of upholstering and
repairing motor vehicles, boats, watches, radios, furniture, electrical
appliances, clothing, including fur coats, and other articles of tangible
personal property. |
| (3) |
Dealers
engaged in the business of repairing tangible personal property for others may
purchase such property for resale under Certificates of Exemption. |
| (4) |
Repairmen who are not required by the
Commissioner to register as dealers shall pay the tax to their vendors on all
tangible personal property purchased by them. If purchases are made from
non-registered vendors, such repairmen shall report and remit the applicable
tax directly to the Commissioner. |
| (1) |
Vendors and
lessors of tangible personal property to public schools, public school
principals, teachers, officers and employees, public school organizations
(parent, student, teacher or otherwise) and public school students
(individually or as unorganized groups) shall collect the tax at the time of
sale, at the sales price thereof, irrespective of the fact that same may be
sold for resale.
| (a) |
Public schools, for the
purpose of this regulation, include all State, county or municipal educational
institutions, except such schools as may be required to register, collect,
remit and report sales and use taxes. |
| (b) |
A Certificate of Registration shall be
granted only to those public schools having a continuity of sales of tangible
personal property or charges for admission to games or entertainments and
maintaining adequate facilities for collecting, remitting and reporting sales
and use taxes. |
| (c) |
A Certificate of
Registration may be issued to a county or municipal Board of Education for
reporting sales and use taxes for all schools under its jurisdiction, provided
adequate records are maintained and regularly audited by the Board. |
| (d) |
Exemption certificates covering purchases
of tangible personal property by registered schools and Boards of Education
shall be honored only when purchase is pursuant to an official purchase order
signed by a person authorized to obligate the school or Board of Education for
payment therefor out of public funds. |
|
| (2) |
Purchase orders, oral or written, issued
by a person duly authorized to obligate a Board of Education, municipality,
county, or the State for payment of tangible personal property so purchased
shall be deemed "Official Purchase Orders." However, purchase orders issued for
property which does not become and remain the property of the Board of
Education, municipality, county, or the State will not be considered Official
Purchase Orders sufficient to exempt the property from taxation. |
| (3) |
Public funds shall include what is
usually referred to as "School Revolving Funds" or "Unappropriated School
Funds" provided such funds are subject to audit and control of a Board of
Education, municipality, county or the State. |
| (4) |
Certificates of Exemption (Forms ST-5):
Certificate of Exemption (Form ST-5) shall be honored only when purchases are
made pursuant to Official Purchase Orders to be paid for out of public funds.
Such certificates must be completed and signed by a person authorized to issue
Official Purchase Orders. Item 4 should be checked, and "Board of Education,
... County, (City or State of Georgia)" inserted in the space provided for
"Certificate of Registration Number". |
| (5) |
School Lunches. Sales tax does not apply
to school lunches sold and served to pupils or employees of public schools.
Food and drink which become component parts of such lunches are also exempt
from the tax and may be purchased under Certificates of Exemption (Forms
ST-5). |
| (6) |
School Cafeterias.
Schools operating cafeterias selling meals to students and the public are
required to register, collect and remit sales tax. Such cafeterias may purchase
tangible personal property for resale under Certificates of Exemption (Form
ST-5). |
| (7) |
Snack Bars. Snack bars
operated by schools, the proceeds from which go directly into "School Revolving
Funds," or "Unappropriated School Funds" shall pay the tax to vendors at the
time of purchase at the purchase price thereof. Any Certificates of
Registration heretofore issued to schools for the purpose of reporting and
remitting the tax on such sales must be returned to this office for
cancellation. |
| (8) |
Miscellaneous
Sales. Where public schools hold doughnut sales, candy sales, carnivals, etc.
and such purchases for resale are made from public funds, the tax must be paid
to vendors at the time of purchase at the purchase price thereof. Proceeds from
the resale of such property, which go directly into "School Revolving Funds" or
"Unappropriated School Funds," are not taxable. |
| (9) |
Admissions. The tax applies to all
charges for admissions, voluntary contributions and donations in lieu of
charges for admission to athletic events, entertainments, lectures, concerts,
etc. Public schools which are not registered shall file a Miscellaneous Sales
and Use Tax Report for each quarter in which such charges are made. |
| (10) |
Purchases by Public Schools, School
Groups, Organizations, etc. Official Purchase Orders shall not be recognized
for tangible personal property such as year books, class rings, graduation
gowns and caps, photographs, etc. or purchases for any school group,
organization, association, or individual. The tax shall be paid to vendors on
such purchases. If no tax is charged by the vendor, purchaser must declare the
tax and file a "Miscellaneous" Sales Tax Report (Form ST-3). |
| (11) |
P.T.A.'s, Classroom Mothers, Student
Groups, etc. Where P.T.A.'s, etc. hold fund raising projects, the gross
proceeds derived from charges for admission, voluntary contributions and
donations in lieu of admission charges, and sales of tangible personal
property, including candy, doughnuts, etc. are subject to the tax. Purchases
for resale on which the tax is paid to vendors may be claimed as exemptions on
Line 5 of the Sales Tax report form. "Miscellaneous" Sales Tax reports must be
filed for each month in which taxable sales are made. |
The tax does not apply to charges for services rendered by
shoe repairers. Purchases of equipment, tools, materials, and supplies
purchased for use or consumption in rendering services are taxable at the time
of purchase. When repairers go beyond the rendition of services and regularly
engage in selling tangible personal property, they are required to register,
collect and remit the tax on sales at retail.
| (1) |
An advertising
agreement which calls for furnishing of advertising displays under which the
advertiser is entitled to a given quantity of exposures in a general area is
considered a service which is not taxable as a lease of tangible personal
property. |
| (2) |
An agreement which
requires an outdoor advertising company to display an advertiser's message only
and grants to the advertiser neither the right to possess nor use the
personalty upon which the advertising message is displayed is considered a
service which is not taxable as a lease of tangible personal
property. |
| (3) |
The person furnishing
services is the consumer of all tangible personal property used or consumed in
displaying messages and shall pay the tax at the time of purchase. |
| (4) |
An agreement which grants to a party
advertiser the rights to possess, control or use described personalty at a
stated location is considered a lease and the gross lease or rental charge is
taxable. |
| (5) |
The sale of special
equipment which becomes the property of the advertiser is taxable. |
| (6) |
Charges made for service of a device
owned by an advertiser are not subject to the tax. The person furnishing such
service shall pay the tax on all tangible personal property used or consumed in
furnishing such services. |
| (7) |
The
tax does not apply to charges for painting signs on buildings, trucks, windows,
doors and the like. Materials and supplies used in performing such services are
taxable at the time of purchase. |
| (8) |
The tax applies to the retail sales price
of signs, posters, and other advertising displays. |
| (1) |
The tax applies to retail sales of
tangible personal property to all social and fraternal organizations, including
but not limited to fraternal societies, trade or professional associations,
lodges, orders, their auxiliaries, sororities and fraternities. |
| (2) |
When such an organization regularly
engages in the business of selling tangible personal property, it shall
register as a dealer, collect and remit the applicable tax. |
| (1) |
Taxicab owners
and operators. Any person owning and operating a taxicab or taxicabs shall
register as a dealer and pay the tax at the time of purchase on tangible
personal property used or consumed in the operations. Such purchases include
taxicabs, meters, accessories, tires, repair parts, gasoline, lubricants,
tools, and other supplies. Additionally, such person shall collect the tax on
fares for the transportation of persons in accordance with the uniform bracket
system and shall remit same to the State Revenue Commissioner. |
| (2) |
Taxicab operators leasing cabs to
drivers. Any person leasing or renting taxicabs to others and supervising their
operations must register as a dealer. Taxicabs, meters, accessories, repair
parts, and tires exclusively for lease or rental should be purchased tax exempt
under Certificates of Exemption. Other materials and supplies, including
gasoline, lubricants, soaps, etc., used or consumed in connection with their
operations are taxable at the time of purchase. Lessees or rentees of taxicabs
and other tangible personal property shall be liable for a tax thereon at the
rate of 4% of the gross lease or rental charges. Additionally, lessees or
rentees of taxicabs shall collect the tax on fares for transportation of
persons in accordance with the uniform bracket system. Said lessees or rentees
shall pay the tax on charges for the lease or rental of tangible personal
property and fares collected for transportation of persons to their lessors or
renters and said lessors or renters shall remit same to the State Revenue
Commissioner. |
| (3) |
Taxicab operators
and lessors. Any person owning and leasing taxicabs which are operated
partially by the owner and partially by the lessee shall register as a dealer
and pay the tax at the time of purchase on tangible personal property used or
consumed in the operations, including taxicabs, meters, accessories, tires,
repair parts, gasoline, lubricants, and other supplies. Additionally, such
lessors shall collect the tax on the gross lease or rental charges for taxicabs
and equipment, and shall collect the tax on any tangible personal property sold
to lessees. Lessees shall collect the tax on fares for transportation of
persons in accordance with the uniform bracket system and pay such tax to the
lessor for remittance to the State Revenue Commissioner. |
| (4) |
Taxicab "headquarters" operators. Any
person operating a headquarters for taxicabs and supervising or directing
taxicab drivers, or receiving and relaying calls to cab driver members, shall
register as a dealer. Cab driver members operating from such headquarters shall
pay the tax at the time of purchase, lease or rental, on all tangible personal
property used or consumed in the operations. Additionally, such drivers shall
collect the tax on fares for transportation of persons in accordance with the
uniform bracket system and pay the same to the dealer operating the
headquarters for remittance to the State Revenue Commissioner. |
| (5) |
Independent taxicab operators.
Independent taxicab operators shall register as dealers and pay the tax at the
time of purchase, lease or rental on all equipment, materials, and supplies
used or consumed in the operations. Additionally, such persons shall collect
the tax on fares for transportation of persons in accordance with the uniform
bracket system and remit same to the State Revenue Commissioner. |
| (6) |
Cars for hire. For the purpose of this
regulation, cars for hire are taxable in the same manner as taxicabs. |
| (7) |
Definitions.
| (a) |
For purposes of this regulation the term
"independent taxicab operator" means a person who is totally unassociated with
any headquarters operation and with any lessors of taxicabs and with any other
taxicab business or driver. |
| (b) |
Due
to the likelihood that the State would otherwise lose tax funds due to the
difficulty of policing the business operations of taxicab drivers because of
the nature of the business, the lack of an office or regular place of business
and the turnover of drivers, headquarters operators and lessors of taxicabs
shall collect the tax on fares for transportation of persons from their drivers
as required above, and the term "headquarters operators" includes not only any
person operating a headquarters for taxicabs and supervising or directing
taxicab drivers, or receiving and relaying calls to cab driver members, but
also any person or entity allowing use of the trade name of the headquarters or
allowing any driver to hold himself out as being associated with the
headquarters. The term "taxicab lessors" includes any person or entity leasing
a vehicle to another person or entity for use as a taxicab. |
|
| (1) |
The tax does not apply to amounts charged
by a trading stamp company to a dealer which entitles the dealer to distribute
to its customers trade stamps that are redeemable by the trading stamp company
in cash or premiums. |
| (2) |
The
trading stamp company is the consumer of and shall pay tax on the purchase of
all trade stamps, stamp collection books, premium catalogs, advertising and
promotional materials and the like that it uses, or furnishes to its dealers
for which no specific charge is made. When a trading stamp company makes a
separate charge for trade stamps, trade stamp collection books, premium
catalogs, promotional or advertising materials, or any other item of tangible
personal property, in addition to any charges made under the first paragraph of
this rule, it shall collect the tax thereon from its customer. In such cases,
the trading stamp company is entitled to credit for tax previously paid on the
purchase of the items sold. |
| (3) |
When a trading stamp company accepts trade stamps or a combination of trade
stamps and cash in exchange for premiums,the transaction is subject to the tax
and the trading stamp company shall collect the tax from the person
surrendering the stamps, based on the total value of the stamp book and any
cash paid. The trading stamp company shall not pay the tax on the purchase of
such premiums, but should furnish its suppliers resale certificates as provided
by . |
| (1) |
Trustees,
receivers, executors and administrators who continue to operate, manage or
control a business engaged in making retail sales of tangible personal property
must make application for a new Certificate of Registration except in the case
of a corporation which continues to exist as the same legal entity. |
| (2) |
The tax must be collected and remitted in
the same manner as by other dealers and it is immaterial that such officers may
have been appointed by the courts. |
| (1) |
The sale of machinery or equipment that
is used for the primary purpose of reducing or eliminating air or water
pollution, or any repair, replacement, or component parts for such machinery or
equipment, is exempt from tax. |
| (2) |
The exemption applies only to tangible personal property that remains tangible
personal property after installation. |
| (3) |
Any person making a sale of such
machinery, equipment, or parts must remit tax unless the purchaser furnishes
the seller with a Form ST-M8 Certificate of Exemption, certifying that the
purchaser is entitled to purchase such machinery, equipment, and parts without
paying tax. A purchaser may obtain Form ST-M8 Certificate of Exemption by
completing and submitting to the Department Form ST-M7. |
| (4) |
Pursuant to O.C.G.A. § 48-8-63, a contractor must pay the
tax when purchasing such machinery, equipment, or parts. However, the ultimate
owner of the property may file a claim for refund of such tax. |
| (5) |
Claims for refund must be filed within
three (3) years following date of payment of tax to the Department. If a
taxpayer seeks a refund of taxes paid on a purchase made prior to obtaining and
using Form ST-M8, then the refund will be made without interest. |
| (6) |
Taxpayers selling or acquiring machinery,
equipment, and parts under this exemption must maintain records of the
sale. |
| (1) |
Fabrication
labor is a part of the sales price of tangible personal property and subject to
the tax, whether or not the charge therefor is separately stated. For the
purpose of this regulation, fabrication means the production of an article from
a material or materials by giving such material or materials a new form,
quality or property, and includes the cutting, carving, dressing, shaping,
bending or further processing a stock or custom made article of tangible
personal property into an article for a specific or general use. |
| (2) |
Charges for labor in installing,
applying, remodeling or repairing tangible personal property sold, when billed
separately to the consumer, are not considered a part of the sales price of the
article sold. Unless such labor is separately stated on the consumer's invoice,
the total charge shall be subject to the tax. |
| (3) |
Charges for labor in repairing and
restoring an article of tangible personal property to its original form, when
billed separately from materials used, are not subject to the tax, provided the
same article is returned to the customer. |
| (1) |
For the purpose
of this regulation, a bona fide private elementary school means one regularly
established for the purpose of teaching basic subjects above the kindergarten
and below the secondary school commonly embracing 6 to 8 grades; bona fide
private secondary school means one regularly established for the teaching of
basic subjects between elementary and collegiate, including a junior
college. |
| (2) |
Any bona fide private
elementary or secondary school eligible to receive tax deductible contributions
should make application to the Department of Revenue, Sales and Use Tax Unit,
for exemption from payment of sales and use tax on its purchases of tangible
personal property and services to be used exclusively for educational purposes,
and food for school lunch program to be consumed on the premises by pupils and
employees of such school. |
| (3) |
The
application shall be by letter, stating the name and address of the school, the
date opened, number of grades equivalent to public schools, number of class
rooms, number of teachers regularly employed, average number of students,
number of months open each year. There must be attached a copy of a Certificate
issued by the U.S. Internal Revenue Service, or the Georgia Income Tax Unit,
stating that an Income Tax exemption is granted for educational purposes and
that contributions to the school are deductible for income tax
purposes. |
| (4) |
Upon approval of an
application, the Sales and Use Tax Unit will furnish the school with a "Letter
of Authorization", (Form ST-USC-1). The school must furnish one photographic
copy of the letter to each supplier of tangible personal property or services
in order to relieve him from collecting the tax. Misuse of a Letter of
Authorization shall be ground for cancellation. |
| (5) |
The exemption does not extend to sales
made to Parent Teacher Associations, Class Room Mothers, Student Groups or
other school groups, or to sales made on school property through vending
machines, snack bars, or other such outlets. |
| (1) |
Definitions.
| (a) |
Licensed Non-Profit Nursing Home.
| 1. |
A licensed non-profit nursing home means
any institution, not operated for profit, which admits for temporary residence
in the institution patients or medical referral only and for whom arrangements
have been made for medical care, and which meets the requirements and maintains
the services and facilities specified in subsections (c), (d), or (e) of
Regulation 270-3-4-.02, Official Compilation, Rules and Regulations of the
State of Georgia, as it read on March 29, 1971, and which holds a permit for
such operation as a nursing home issued by the Department of Public Health
under Regulation 270-3-4-.05, Official Compilation, Rules and Regulations of
the State of Georgia. |
|
| (b) |
Non-Profit General Hospital.
| 1. |
A non-profit general hospital means any
institution, not operated for profit, designed, equipped, staffed and operated
to receive persons in need of hospitalization for any physical illness or
disability for temporary residence in the institution for diagnosis, treatment,
and other offered health services, which include medical, and surgical
services, for periods continuing twenty-four (24) hours or longer under the
supervision of an active, licensed, professional, medical and nursing staff. An
institution is not a general hospital if its services are limited by policy,
practice, or the manner in which it holds itself out to the public, so that it
would fall within the classifications established under subsections (5), (6),
or (7) of Regulation 270-3-2-.03, Official Compilation, Rules and Regulation of
the State of Georgia, as it read on March 29, 1971. For example, a hospital
which limits its services to the treatment of specific illnesses is not a
general hospital. An institution may be a general hospital if admission is
limited to persons of a specific age class if with respect to that class it
performs general hospital treatment functions, which must include medical and
surgical services but which as a result of limited admission do not include the
other services typically provided by general hospitals such as obstetrical
services. |
|
| (c) |
Non-Profit
Mental Institution.
| 1. |
A non-profit mental
hospital means any institution, not operated for profit, which is designed,
equipped, staffed and operated for the purpose of receiving mentally ill
persons for temporary institutional residence for psychiatric and other health
services, which must include psychiatric evaluation, diagnosis and treatment,
for continuous periods of twenty-four (24) hours or longer, under the
supervision of an active, licensed, professional nursing and psychiatric
staff. |
|
|
| (2) |
Certificate of Exemption.
| (a) |
Application for
Certificate of Exemption.
| 1. |
Applications for
exemption by institutions described in Section (1) shall be made to the State
Revenue Commissioner on Sales Tax Form ST-NH-1. The application must contain
the following:
| (i) |
A statement of the name
and address of the institution, the date on which the institution was first
operated, and such other information as the Commissioner may require. |
| (ii) |
A copy of the application, and all
exhibits thereto, made to the Internal Revenue Service and a copy of the
Internal Revenue Services determination letter confirming the exempt status of
the institution under the Internal Revenue Code of 1954. |
| (iii) |
A copy of any permit issued by the
Department of Public Health of the State of Georgia with respect to the
performance of the functions by virtue of which an exemption is
claimed. |
| (iv) |
A copy of the
non-profit charter or other governing instrument under which the institution is
operated. |
| (v) |
A written verified
statement of its admission policies. |
|
|
| (b) |
Upon approval of an application, a
certificate of exemption shall be issued by the Commissioner which shall
authorize tax-free purchases by the institution for the purposes described in
Section 3. Sales by dealers to institutions which have not been issued a
certificate of exemption will be presumed taxable. |
|
| (3) |
Scope of Exemption.
| (a) |
Purchases. Exemption certificates are
validly used only for purchases by the institution of tangible personal
property and services for use exclusively by the institution in performing a
general nursing home or hospital treatment function. Purchases by the
institution, for example, of property for the personal use of a staff member
outside the facilities used for nursing or health services are not exempt.
Generally, property placed within a facility used for the purposes of
performing the nursing or health services will be considered exempt. The
exemption is validly used only by an institution to which the certificate has
been issued and does not affect the liability of any other person. A contractor
engaged in real property improvement for the institution is not
exempt. |
| (b) |
Sales. Sales by the
institution to which a certificate under this Section has been issued are not
exempt under this Regulation. |
| (c) |
Multi-Function Institutions. An institution which performs a function which
would entitle it to an exemption but which performs additional non-exempt
functions, will be issued an exemption certificate. Such certificate may be
validly used only for property or services used exclusively in performing the
exempt functions and may not be used for property or services employed in
performing the non-exempt function. Continued use of the exemption certificate
for non-exempt purchases will be ground for revocation of the certificate. If a
certificate is revoked, tax paid on exempt purchases will be refunded upon a
properly supported claim for refund. |
|
| (1) |
Any person engaged in the business of
selling cabinets, fixtures and similar custom made or stock items shall
register as a dealer, collect and remit the tax on the sales price of the
finished items. Charges for labor in installing such tangible personal property
is not subject to the tax when billed separately to the consumer. |
| (2) |
Any person who contracts to furnish
tangible personal property and perform services under the contract by building
cabinets, fixtures and similar items at the job site and incorporating the same
into real property construction shall be classified as a contractor and shall
pay the tax on the cost price of all tangible personal property purchased or
consumed in performing a contract. |
| (1) |
Pilot Training Schools.
| (a) |
Persons operating pilot training schools
providing classroom, ground and flight instructions, including a given number
of hours flight time for which no separate charge is made, are primarily
engaged in providing services. Such persons are deemed to be consumers of all
tangible personal property (including aircraft) purchased and used in providing
such services and shall pay the tax thereon at the time of purchase. |
| (b) |
Persons operating pilot training schools
providing classroom, ground and flight instructions, and exclusively following
the practice of separately charging for aircraft flight time including both
solo and dual instruction, are engaged both in providing services and in the
rental of tangible personal property. Considering the record keeping
requirements imposed by various governmental and regulatory agencies, such
persons may elect to treat all such aircraft flight time which is a part of the
training program as a rental of aircraft to the student. Such rental, however,
must be at arm's length and based upon fair rental value. To qualify for this
election, the practice of separately charging for aircraft flight time must
exclusively be followed both with respect to all aircraft and all students.
Aircraft (as well as accessories, tires, and repair parts therefor) employed
exclusively in these type operations may be purchased for resale, free of sales
or use tax. All other tangible personal property purchased and use in operation
of the schools shall be taxable to same as the consumer thereof.
| 1. |
This election will only be available to
those schools which are either appropriately certificated by the FAA as pilot
training schools, or operating under FAR Part 61 with an established base of
operations. Such persons must provide evidence satisfactory to the Commissioner
of compliance with this requirement. |
|
| (c) |
Those schools operating under paragraph
(a) which go beyond the rendition of services and lease or rent aircraft to
licensed pilots and all schools operating under paragraph (b) shall register as
a dealer, collect and remit the tax on the gross lease or rental
charge. |
| (d) |
The sale of used
aircraft and other tangible personal property is subject to the tax. |
|
| (2) |
Vocational Training Schools.
| (a) |
Persons operating vocational schools are
primarily engaged in providing services consisting of classroom instructions
and the use of various types of equipment, tools, books, etc. Such persons are
deemed to be consumers of all tangible personal property used, consumed, or
furnished to students for use in their studies and shall pay the tax thereon at
the time of purchase. |
| (b) |
When a
school purchases equipment, tools, or other tangible personal property for
resale to students, it shall register as a dealer, collect and remit the tax
thereon. |
|
| (1) |
Any person making retail sales of alarm,
warning, sound or music devices shall collect and remit the tax on the sales
price of such tangible personal property. |
| (2) |
A lessor of an alarm, warning, sound or
music device shall collect and remit the tax on the gross lease or rental
charges, including records or tapes furnished to the lessee.
| (a) |
Where a lessor furnishes sound music or
recordings from a central location operated by the lessor, an additional charge
for such services would not be subject to the tax when billed separately to the
lessee. However, the lessor must pay the tax on all tangible personal property
purchased, used or consumed in providing such services. |
|
| (3) |
Any person who contracts to furnish such
a device or system and perform services thereunder in installing the same into
real property construction shall be liable for the tax on the fair market value
of all tangible personal property purchased, used or consumed in performing the
contract.
| (a) |
Where a contract requires the
contractor to also provide sound music or recordings from a central location
operated by the contractor, an additional service charge therefor would not be
subject to the tax. The contractor must pay the tax on all tangible personal
property purchased, used or consumed in providing such services. |
|
| (1) |
Any person who contracts to furnish
tangible personal property and perform services thereunder within this State in
constructing, repairing, remodeling or improving real property shall pay the
tax levied by this Act at the time of purchase. Further, any person who so
contracts to perform services and is furnished tangible personal property for
use under the contract and a sales or use tax has not been paid to this State
shall pay the tax on the fair market value of the tangible personal property so
used. |
| (2) |
Sheet metal contractors
are required to register, pay sales and use tax on all tangible personal
property purchased, stored, used or consumed in this State. |
| (3) |
At times a sheet metal contractor may be
called upon to fabricate and furnish to a buyer a custom item of tangible
personal property which is not converted to real property construction by the
sheet metal contractor. When such an item is sold to any person the sheet metal
contractor shall collect the tax on the total sales price of the fabricated
tangible personal property and claim credit for the sales or use tax paid on
the raw materials. Complete records of all such transactions must be maintained
separately from the records of items furnished and installed by the
contractor. |
| (4) |
A sheet metal
contractor who holds himself out as a producer and seller of tangible personal
property, or who solicits buyers by advertising, brochures, salesmen or any
other manner shall make application for a dealer certificate of registration,
collect and remit the tax on the total sales price of all tangible personal
property. |
| (1) |
Purpose. The purpose of this Rule is to provide guidance regarding
the administration of O.C.G.A. § 48-8-3(41), which
provides for an exemption from Georgia sales and use tax with respect to
certain sales to or by certain nonprofit tax-exempt organizations engaged
primarily in providing child services. |
| (2) |
Definitions.
| (a) |
"Child services provider" means a
child-caring institution as defined under O.C.G.A. § 49-5-3(1), as
amended, a child-placing agency as defined under O.C.G.A. § 49-5-3(2), as
amended, or a maternity home as defined under O.C.G.A. § 49-5-3(14), as
amended. |
| (b) |
"Cost of operations"
means all reasonable direct operational costs incurred by a child services
provider. Costs shall be determined based on the child services provider's
method of accounting. Such costs include, but are not limited to: salaries;
supplies; rent; mortgage payments; furniture and fixtures; loan payments; food;
transportation; and educational and special activities. |
| (c) |
"Exemption determination letter" means a
letter issued by the Commissioner permitting a child services provider to
purchase certain tangible personal property and services exempt from Georgia
sales and use tax. |
| (d) |
"Nonprofit
tax-exempt organization" means any organization that holds a letter of
determination from the Internal Revenue Service demonstrating that it qualifies
as a nonprofit tax-exempt organization under Internal Revenue Code § 501(c)(3). |
|
| (3) |
Exemption from sales and
use tax. Sales of tangible personal property and services to a child
services provider are exempt from Georgia sales and use tax only when the child
services provider obtains an exemption determination letter from the
Commissioner, is a nonprofit tax-exempt organization, and engages primarily in
providing child services.
| (a) |
A child
services provider is engaged primarily in providing child services if:
| 1. |
The child services provider is currently
licensed by the Georgia Department of Human Resources as a child services
provider as defined under subparagraph (2)(a) of this rule; and |
| 2. |
More than fifty percent (50%) of thechild
services provider's cost of operations for the previous fiscal year is directly
related to providing the services and activities as defined in O.C.G.A. § 49-5-3, as amended.
| (i) |
If a child services provider has been in
business for less than twelve full months, the provider's budgeted cost of
operations will be used to determine its eligibility for the exemption on a
temporary basis. |
| (ii) |
A child
services provider submitting an application using its budgeted cost of
operations must submit the actual cost of operations within thirty days
following the end of its initial twelve-month period. |
| (iii) |
Any cost of operations that is not
readily identifiable as being directly attributable to providing child services
shall be excluded from the numerator when calculating the percentage. |
|
|
| (b) |
Exemption
determination letter. To obtain an exemption determination letter from the
Commissioner, a child services provider must submit a completed Revenue Form
ST-CH-1, Application for Certificate of Exemption for aChild-caring Institution, Child-placing Agency, or Maternity
Home, and include any additional documentation required by the
Commissioner. Revenue Form ST-CH-1 may be downloaded from the forms section of
the Department of Revenue's website.
| 1. |
Upon
the Commissioner's approval of the child services provider's application, the
Commissioner will issue an exemption determination letter to the child services
provider that will be valid for the duration of the child services provider's
annual license as provided by the Georgia Department of Human Resources or
until revoked in writing by the Commissioner, whichever occurs first. |
| 2. |
A copy of the exemption determination
letter issued to a qualifying child services provider must be furnished to
dealers selling tangible personal property or taxable services in order to
excuse the dealers from collecting Georgia sales and use tax. |
| 3. |
A copy of the exemption determination
letter may be accepted by a dealer only when payment is made by check or credit
card bearing the name of the qualifying child services provider. Any sales to
child services provider employees or other persons for which payment is made
with cash, personal check, or credit card on behalf of a child services
provider remain subject to sales and use tax even though the purchaser will be
reimbursed by the child services provider. |
| 4. |
An exemption determination letter is
issued for the exclusive use of the qualifying child services provider, and is
not transferable. Use of the exemption determination letter by any person or
entity other than the child services provider to whom it was issued is not
permitted. |
| 5. |
Any child services
provider whose license is suspended or revoked by the Georgia Department of
Human Resources, or who terminates business operations, must immediately return
its exemption determination letter to the Commissioner. |
| 6. |
If a child services provider's application
is denied or a previously issued exemption determination letter is revoked, the
Commissioner shall issue a written response providing the reason(s) for the
denial or revocation. Reasons for denial of an application or revocation of a
previously issued exemption determination letter include, but are not limited
to, an insufficient or incomplete application, failure to submit all necessary
documentation, misuse or noncompliance with any federal, state or local laws,
or failure to satisfy any requirements as stated under the pertinent statute or
this Rule. |
| 7. |
The denial of an
application or revocation of a previously issued exemption determination letter
is final unless, within sixty (60) days of the mailing of the denial or
revocation, the child services provider submits a written application for
reconsideration to the Commissioner. The application must contain the child
services provider's reason(s) for reconsideration. The child services provider
has the burden of proof to establish that the denial or revocation decision was
not correct. |
|
|
| (4) |
Annual Renewal Process. Any
child services provider who was previously issued an exemption determination
letter and who desires to continue to receive the benefits of exemption beyond
the duration of the initial period described in subparagraph (3)(b)1. must
provide the Commissioner with a copy of the annual inspection report that
renews the license issued by the Georgia Department of Human Resources within
thirty (30) days of the issuance of the annual inspection report. |
| (5) |
Purchases by child services
providers.
| (a) |
Purchases eligible for
the exemption include office equipment and supplies; medical, educational,
personal care and janitorial supplies; food, clothing, motor vehicles used
exclusively to transport children; and other such items necessary to provide
care for children or mothers when purchased directly by a qualifying child
services provider. |
| (b) |
Purchases
that are not eligible for the exemption include, but are not limited to: motor
vehicles for personal and business use; gifts to any person other than children
or mothers under the care of a qualifying child services provider; building
materials used by contractors; and purchases made by other persons performing
services for a child services provider. |
|
| (6) |
Sales by child services
providers.
| (a) |
A sale of tangible
personal property or services by a qualifying child services provider is exempt
from Georgia sales and use tax if the transaction satisfies the following
conditions:
| 1. |
The sale constitutes a
fund-raising activity on behalf of the child services provider; |
| 2. |
The fund-raising activities do not exceed
thirty (30) days in any calendar year; |
| 3. |
No sale proceeds are used for the benefit
of anyone other than the child services provider; and |
| 4. |
The sale proceeds are used solely for
child services. |
|
| (b) |
The
following examples illustrate the taxation of sales by qualifying child
services providers:
| 1. |
A child services
provider's retail sales derived from the operation of a booth selling food at a
fair for two weeks are not subject to Georgia sales tax if all of the
conditions in subparagraph (6)(a) of this Rule are satisfied. |
| 2. |
A child services provider's retail sales
for admission derived from a charity fund-raising event are not subject to
Georgia sales tax if the provider satisfies all of the conditions in
subparagraph (6)(a) of this Rule. |
| 3. |
A child services provider's retail sales
derived from the operation of a store every weekend throughout the year are
subject to Georgia sales tax. |
| 4. |
Sales made by a third party for which a child services provider receives a
commission are subject to Georgia sales tax. |
|
| (c) |
Purchases made for resale that are paid
directly by a child services provider are exempt from sales tax when an
exemption determination letter is provided to the dealer. If a dealer donates
tangible personal property purchased for resale to a child services provider,
the dealer will be responsible for payment of Georgia sales tax as provided
under O.C.G.A. § 48-8-39. |
|
| (7) |
Records. A child services
provider is required to maintain records of all purchases and sales for a
three-year period. |
| (8) |
Effective Date. This rule is effective beginning July 1,
2004. |
The sale or rental of video tape or motion picture film for
private use would be subject to the tax.
| (1) |
For purposes of
qualifying for the exemption provided for by O.C.G.A. § 48-8-3(34.1), and as used in this
Regulation, the following definitions and explanations of terms shall apply:
| (a) |
The term "distribution facility" means a
warehouse, facility, structure, or enclosed area which is used primarily for
the storage, shipment, preparation for shipment, or any combination of such
activities, of goods, wares, merchandise, raw materials, or other tangible
personal property. |
| (b) |
The term
"primary material handling equipment" means the principal machinery and
equipment used to lift or move tangible personal property in a warehouse or
distribution facility located in this State. Depending upon whether or not it
is the principal machinery and equipment used to lift or move tangible personal
property, the following items may be considered primary material handling
equipment:
| 1. |
conveyers, carousels, lifts,
positioners, pick-up-and-place units, cranes, hoists, mechanical arms, and
robots; |
| 2. |
mechanized systems,
including containers which are an integral part thereof, whose purpose is to
lift or move tangible personal property; |
| 3. |
automated storage and retrieval systems,
including computers which control them, whose purpose is to lift or move
tangible personal property; and |
| 4. |
forklifts and other off-the-road vehicles which are used to lift or move
tangible personal property and which cannot be legally operated on roads and
streets. |
|
| (c) |
The term
"primary material handling equipment" does not include parts or equipment used
to repair, refurbish, or recondition other equipment, but does include
equipment, as defined above, which replaces in its entirety other primary
material handling equipment. |
| (d) |
The term "racking system" means any system of machinery, equipment, fixtures,
or portable devices whose function is to store, organize, or move tangible
personal property within a warehouse or distribution facility, including, but
not limited to, conveying systems, chutes, shelves, racks, bins, drawers,
pallets, and other containers and storage devices which form a necessary part
of the facility's storage system. |
| (e) |
The term "warehouse" means a facility,
structure, or enclosed area which is used primarily for the storage of goods,
wares, merchandise, raw materials, or other tangible personal
property. |
|
| (2) |
For
purposes of qualifying for the exemption provided for by O.C.G.A. § 48-8-3(34.1), the following
general requirements shall apply:
| (a) |
Except
as otherwise provided in this Regulation, effective for deliveries which occur
on or after July 1, 1994, the tax does not apply to sales of primary material
handling equipment used directly for the handling or movement of tangible
personal property in a warehouse or distribution facility located in this
State, when the following conditions are met:
| 1. |
the equipment is part of an expansion of
an existing warehouse or distribution facility or part of the construction of a
new warehouse or distribution facility in this State; |
| 2. |
the total value of all real and personal
property purchased or acquired by the taxpayer for use in the expansion or new
construction of the warehouse or distribution facility is worth 10 million
dollars or more (See paragraph (4)). Purchases made over a period of time, even
though made in anticipation of an expansion, without definite plans will not be
considered an expansion of an existing warehouse or distribution facility;
and |
| 3. |
the purchaser has obtained a
Certificate of Exemption as provided in subparagraph (c) of this
Regulation. |
|
| (b) |
Except
as otherwise provided for in this Regulation, effective for deliveries
occurring on or after July 1, 1995, the tax does not apply to sales of racking
systems used for the conveyance and storage of tangible personal property in a
warehouse or distribution facility located in this State, when the following
conditions are met:
| 1. |
the equipment is part
of an expansion of an existing warehouse or distribution facility in this State
or part of the construction of a new warehouse or distribution facility in this
State; |
| 2. |
the total value of all
real and personal property purchased or acquired by the taxpayer for use in the
expansion or new construction of the warehouse or distribution facility is
worth 10 million dollars or more (See paragraph(4)). Purchases made over a
period of time, even though made in anticipation of an expansion, without
definite plans will not be considered an expansion of an existing warehouse or
distribution facility; and |
| 3. |
the
purchaser has obtained a Certificate of Exemption as provided in subparagraph
(c) of this Regulation. |
|
| (c) |
To obtain such Certificate of Exemption,
the purchaser or lessee must submit an Application for Certificate of Exemption
(Form ST-WD1). The application shall include a schedule of equipment to be
purchased or leased, a full description of the usage of the equipment, and the
cost of each piece of equipment. The Commissioner may require the purchaser or
lessee to furnish such additional information as deemed necessary to determine
whether the requirements and qualifications for the exemption are
met. |
|
| (3) |
Effective July
1, 1995, in order to qualify for the exemption provided for by O.C.G.A. § 48-8-3(34.1), a warehouse or
distribution facility must not make retail sales from such family to the
general public which equal or exceed 15% of the total revenue of the warehouse
or distribution facility. A taxpayer who has qualified for the exemption
provided for by O.C.G.A. § 48-8-3(34.1), or obtained a
Certificate of Exemption therefor, shall be disqualified from receiving such
exemption as of the date the taxpayer's warehouse or distribution facility
makes retail sales to the general public equal to or greater than 15% of the
total revenues of the warehouse or distribution facility. In the event that a
taxpayer has obtained the benefit of the exemption contained in O.C.G.A. § 48-8-3(34.1) at a time when the
warehouse or distribution facility made retail sales to the general public
which equaled or exceeded 15% of the total revenues of the warehouse or
distribution facility, the taxpayer may be required to repay any tax benefits
received under said Code section or under this Regulation on and after the date
such taxpayer became disqualified from receiving such exemption, and to pay
penalty and interest at the rates provided for by law on such tax
amounts. |
| (4) |
Effective January 1,
1997, the total value of all real and personal property purchased or acquired
by the taxpayer for use in the expansion or new construction of the warehouse
or distribution facility must be worth 5 million dollars or more. Purchases
made over a period of time, even though made in anticipation of an expansion,
without definite plans will not be considered an expansion of an existing
warehouse or distribution facility. |
| (1) |
Sales of food and food ingredients
qualify for an exemption from sales and use tax as provided herein. |
| (2) |
Definitions.
| (a) |
"Alcoholic Beverages" means beverages
that are suitable for human consumption and contain one-half of one percent or
more of alcohol by volume. |
| (b) |
"Dietary supplement" means any product, other than tobacco, intended to
supplement the diet that:
| 1. |
Contains one or
more of the following dietary ingredients: a vitamin, mineral, herb or other
botanical, amino acid, a dietary substance for use by humans to supplement the
diet by increasing the total dietary intake, or a concentrate, metabolite,
constituent, extract, or combination of any ingredient described above;
and |
| 2. |
Is intended for ingestion in
tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended
for ingestion in such a form, is not represented as conventional food and is
not represented for use as a sole item of a meal or of the diet; and |
| 3. |
Is required to be labeled as a dietary
supplement, identifiable by the "Supplemental Facts" box found on the label and
as required pursuant to 21
C.F.R. § 101.36. |
|
| (c) |
"Eating utensils" includes plates,
knives, forks, spoons, glasses, cups, napkins and straws, but does not include
other containers or packaging used to transport the food. |
| (d) |
"Food and food ingredients" means
substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. "Food and food ingredients"
shall not include alcoholic beverages, dietary supplements, or
tobacco. |
| (e) |
"Natural person" means
an individual human being. |
| (f) |
"Prepared food", which is subject to both state and local sales and use taxes,
means:
| 1. |
Food sold in a heated state or
heated by the seller at the seller's location (i.e., the place where the sale
takes place). This includes food that was heated by the seller at any time
before the sale even if the item is in an unheated state at the time of sale;
or |
| 2. |
Food with two or more food
ingredients mixed or combined at the seller's location by the seller for sale
as a single item; or |
| 3. |
Food sold
with eating utensils provided by the seller. Food shall be considered to be
sold with eating utensils provided by the seller when the food is customarily
intended for consumption with the utensils provided. The presence of
self-service utensils in a facility does not make otherwise exempt food taxable
unless it is customarily intended that the food be consumed with those
utensils. |
|
| (g) |
"Tobacco"
means cigarettes, cigars, chewing or pipe tobacco, or any other item that
includes tobacco. |
|
| (3) |
Food Exemptions.
| (a) |
O.C.G.A. § 48-8-3(57)
exemption. Effective for transactions occurring on or after January 1, 2011,
food and food ingredients sold to natural persons for consumption off premises
are not subject to state sales and use tax, but are subject to any local sales
and use tax.
| 1. |
The state sales and use tax
exemption for food and food ingredients is not available to businesses
including but not limited to corporations, partnerships, limited liability
companies, and sole proprietorships. Unless another exemption applies, business
entities, including nonprofit organizations, must pay both state and local
sales and use tax on all purchases of food and food ingredients. |
| 2. |
For purposes of the exemption for food and
food ingredients contained in O.C.G.A. § 48-8-3(57), "food
and food ingredients" does not include the following:
| (ii) |
Items ingested or chewed primarily for
medical or hygiene purposes, such as cough drops, throat lozenges, breath
strips, and over the counter medications; |
| (iii) |
Alcoholic beverages; |
| (iv) |
Tobacco and tobacco products; |
| (v) |
Dietary supplements; and |
| (vi) |
Food intended for non-human consumption,
such as dog food, cat food and animal feed. |
|
|
| (b) |
O.C.G.A. § 48-8-3(53)
exemption. Food and food ingredients purchased with food stamps is exempt after
January 1, 2011 to the same extent that it was exempt before January 1,
2011. |
| (c) |
O.C.G.A. § 48-8-3(12)
exemption. Food and food ingredients, including prepared food, sold and served
to pupils and employees of public schools as part of a school lunch program are
exempt from state and local sales tax. |
| (d) |
O.C.G.A. § 48-8-3(13)
exemption. Sales of food and food ingredients, including prepared food,
consumed by pupils and employees of bona fide private elementary and secondary
schools, which have been approved by the Internal Revenue Service as
organizations eligible to receive tax deductible contributions, are exempt from
state and local sales tax when application for exemption is made to the
Department and proof of the exemption is established. |
| (e) |
O.C.G.A. § 48-8-3(59)
exemption.
| (i) |
Sales of food and food
ingredients to and by member councils of the Girl Scouts of the U.S.A. in
connection with fundraising activities of any such council are exempt from
state and local sales tax. |
| (ii) |
Sales of food and food ingredients to and by member councils of the Boy Scouts
of America in connection with fundraising activities of any such council are
exempt from state and local sales tax. |
|
| (f) |
O.C.G.A. § 48-8-3(81)
exemption. The sale of food and food ingredients to a qualifying airline for
service to passengers and crew in the aircraft is exempt from state and local
sales tax, whether in flight or on the ground; and the furnishing without
charge of food and food ingredients to qualifying airline passengers and crew
in the aircraft, whether in flight or on the ground. "Qualifying airline" is
defined in O.C.G.A. § 48-8-3(81). |
|
| (4) |
Examples of the food exemption
in O.C.G.A. § 48-8-3(57).
| (a) |
Food and food ingredients that are exempt
from state sales and use tax include:
| 1. |
Most
prepackaged or repackaged items sold for ingestion by humans for taste or
nutritional value, such as prepackaged boxed cereal, cartons of milk, peanut
butter ground in the store by either the seller or the customer,
candy; |
| 2. |
Food that is only cut,
repackaged, or pasteurized by the seller, such as:
| (i) |
Deli meat sliced by the seller and sold
by weight; and |
| (ii) |
Potato salad
purchased in bulk by the seller and sold to customers by weight or volume as
long as the seller does not add any ingredients to the potato salad; |
|
| 3. |
Raw animal foods such as eggs,
fish, meat, poultry, and foods comprised of these raw animal foods, that
require cooking by the consumer; |
| 4. |
Packaged beverages of all kinds, including bottled water; |
| 5. |
Liquids such as cooking wine and vanilla
extract used in cooking that exceed an alcohol content of 0.5% but are not
intended for sale as a beverage (drinkable liquid); |
| 6. |
Food sold without eating utensils by a
seller whose proper primary North American Industrial Classification System
(NAICS) code is subsector 311 (food manufacturing) except industry group 3118
(bakeries and tortilla manufacturing); and |
| 7. |
Prepackaged food sold from vending
machines. |
|
| (b) |
Food and
food ingredients that are not exempt and are subject to both state and local
sales and use tax include:
| 1. |
Business
purchases and uses of food and food ingredients.
| (i) |
A business purchases frozen turkeys to
give to employees as holiday gifts. The purchase of such turkeys is subject to
both state and local sales and use tax because the purchaser is a business
entity, and not an individual human being, making a purchase for off-premises
consumption. Food purchases by a sole proprietorship are considered to be
purchases by a business that are subject to both state and local sales tax. If
the business does not pay state sales tax at the time of purchase, the business
should accrue and remit state use tax on its purchase of the food
items. |
| (ii) |
Water in bottles,
coolers, or other containers purchased by a business that provides the water
for no charge to its employees or customers is subject to both state and local
sales and use tax. |
| (iii) |
A daycare
center or for-profit nursing home purchases food at a grocery store to use in
providing its service. Daycare centers and nursing homes are not natural
persons and thus the exemption in O.C.G.A. § 48-8-3(57) does
not apply to their purchases. The purchases are subject to both state and local
tax; and if the day care center or for-profit nursing home only pays local tax
at the time of purchase, it should accrue and remit state use tax on the
purchase. |
|
| 2. |
Food and
food ingredients sold for on-premises consumption, such as prepackaged candy
sold at movie theaters and sports arenas. |
|
| (c) |
Prepared food, which is not exempt and is
subject to both state and local sales and use tax, generally includes:
| 1. |
Food sold by restaurants, street food
vendors, food carts, and fast food establishments; |
| 2. |
Popcorn and fountain beverages sold by
movie theaters because the popcorn is heated onsite and the fountain beverages
are made by mixing ingredients; |
| 3. |
Cakes, breads and pastries made by a retail bakery onsite and sold with or
without utensils for off-premises consumption; |
| 4. |
Bread heated or baked by the seller at the
seller's location, even though the dough was made off-site; |
| 5. |
Food with two or more food ingredients
mixed or combined at the seller's location by the seller for sale as a single
item, such as:
| (i) |
Potato salad purchased in
bulk by the seller to which the seller adds an ingredient, such as salt or
pepper, and then sells by weight or volume; and |
| (ii) |
Deli sandwiches made by the seller at
the seller's location; |
|
| 6. |
Prepackaged food sold with a utensil such
as yogurt sold by a coffee shop with a spoon for off-premises consumption;
and |
| 7. |
Heated food sold by a
vending machine, such as coffee. |
|
|
| (1) |
Definitions. For purposes of qualifying for the exemptions
provided for by O.C.G.A. § 48-8-3(34.2), and as used in this
Regulation, the following definitions and explanations of terms shall apply:
| (a) |
The term "machinery" means an assemblage
of parts that transmits forces, motion, and energy one to another in a
predetermined manner to accomplish a specific objective. |
| (b) |
The term "packaging operation" means
bagging, boxing, crating, packaging, wrapping, labeling, palletizing, and other
similar processes used by the remanufacturer to enclose or containerize
remanufactured products in a manner suitable for sale or delivery to
customers. |
| (c) |
The term
"remanufacture of aircraft engines or aircraft engine parts or components"
means the substantial overhauling or rebuilding of aircraft engines or aircraft
engine parts or components on a factory basis. Substantial overhauling or
rebuilding of aircraft engines or aircraft engine parts or components means the
disassembling, repairing, renovating, reassembling, reconstructing, inspecting,
or testing, thereby restoring the aircraft engine or aircraft engine parts or
components to their original state or an upgraded state. Such term includes a
packaging operation when it is a part of a continuous remanufacturing
operation; and the conveyance of work in process or finished units from one
remanufacturing operation to another in the same plant facility. Such term does
not include: storage; delivery to or from the plant; delivery to or from
storage within the plant; repairing or maintenance of facilities; research;
developmental testing; random or sample testing of materials or products; or
cleaning when not part of a continuous remanufacturing operation. |
|
| (2) |
General Requirements for
the Remanufacturing Machinery Exemption. In order to qualify for the
remanufacturing machinery exemption provided for in O.C.G.A. § 48-8-3(34.2), the property being
purchased or leased must have the character of machinery at the time of the
sale or lease, or consist of components which, when assembled, will have the
character of machinery; the machinery must be used in the remanufacture of
aircraft engines or aircraft engine parts or components; the machinery must be
used directly in the remanufacturing operation; and the appropriate Certificate
of Exemption under this Regulation must be obtained or provided. The exemption
is not applicable to machinery used indirectly in the remanufacturing
operation, or to auxiliary equipment and appurtenances or to materials or items
to be incorporated into real estate construction. The Commissioner may allow an
Application for Certificate of Exemption required by this Regulation to be
filed subsequent to the purchase or lease of the machinery. |
| (3) |
New and Existing Remanufacturing
Plants.
| (a) |
Any person making a sale
or lease of machinery which is used directly in the remanufacture of aircraft
engines or aircraft engine parts or components and which is incorporated for
the first time into a new remanufacturing plant located in this State shall
collect the tax imposed thereon by O.C.G.A. §§ 48-8-1, et seq.,
as amended, unless the purchaser or lessee furnishes the vendor with a
certificate issued by the Commissioner certifying that the purchaser or lessee
is entitled to purchase or lease such machinery without paying the
tax. |
| (b) |
Any person making a sale
or lease or machinery which is used directly in the remanufacture of aircraft
engines or aircraft engine parts or components and which is incorporated, as
additional machinery, for the first time into a remanufacturing plant presently
existing in this State, or which is purchased or leased to replace machinery in
a remanufacturing plant presently existing in this State, shall collect the tax
imposed thereon by the O.C.G.A. §§ 48-8-1, et seq.,
as amended, unless the purchaser or lessee furnishes the vendor with a properly
completed Certificate of Exemption (Form ST-5). |
| (c) |
Any purchaser or lessee of machinery
which is used directly in the remanufacture of aircraft engines or aircraft
engine parts or components and incorporated for the first time into a new
remanufacturing plant located in this State who desires to secure the benefit
of the exemption provided by O.C.G.A. § 48-8-3(34.2) shall file an
Application for Certificate of Exemption (Form STAERl) with the Commissioner,
which shall include a schedule of machinery to be purchased or leased, a full
description of the usage of the machinery in the remanufacturing operation, and
the cost of each item of machinery In addition thereto, the Commissioner may
require such other information as deemed necessary for the determination of the
claim for exemption. These requirements are applicable to all purchasers and
lessees, including holders of direct pay permits under Regulation
. |
| (d) |
Upon approval of an application for the
first time into a new remanufacturing plant, the Commissioner will issue a
Certificate of Exemption for Remanufacturing Machinery (Form ST-AER2) for
presentation by the purchaser or lessee to the machinery suppliers, whereupon
the purchaser or lessee shall be relieved from payment of the tax and the
machinery suppliers shall be relieved from collection of the tax. |
|
| (4) |
Specific
Applications.
| (a) |
When an otherwise
exempt piece of machinery has multiple or interchangeable molds, dies, chucks,
bits, or other tooling, only one such item per position on the machine will be
recognized as an exempt component of an exempt machine. |
| (b) |
Additional items which may qualify for
the exemption include, but are not limited to, electrical components, including
transformers, between the motor control center and exempt machinery and between
exempt machinery; process piping, exclusive of hangers and supports, between
exempt machinery; computer hardware and software which control exempt
machinery; compressors that power exempt machinery; boilers which produce steam
to be used by exempt machinery; and testing or monitoring machinery which is
part of the continuous remanufacturing operation and which tests or monitors
all of the materials or work in process, provided that, machinery used in
random or sample testing cannot qualify for the exemption. |
| (c) |
Examples of some common items that do not
qualify for the exemption include, but are not limited to, foundations,
supports, catwalks, hand tools, items used for protection or safety, and parts
used in the repair, refurnishing, or reconditioning of machinery. |
|
| (1) |
Purpose. The purpose of this Rule is to
provide guidance regarding the direct consumable supplies and overhead
materials exempt from Georgia sales and use tax in accordance with O.C.G.A.
§ 48-8-3(58). |
| (2) |
Definitions. For the purposes of
qualifying for the exemption provided for by O.C.G.A. § 48-8-3(58), and
as used in this Rule, the following definitions and explanation of terms shall
apply:
| (a) |
"Appropriate title passing clauses"
means those title passing clauses whereby title to overhead materials or direct
consumable supplies purchased for use in fulfilling a government contract
passes to the United States Department of Defense or the National Aeronautics
and Space Administration before the government contractor uses the
property. |
| (b) |
"Direct consumable
supplies" means supplies, tools, or equipment used or consumed in the
performance of a government contract which are specifically identified to the
government contract and the actual cost of which is charged as a direct item of
cost to the specific contract. Direct consumable supplies include, but are not
limited to, property used to repair items of capital equipment when a portion
of the contractor's use is properly allocable to government contracts,
notwithstanding the fact that title to the property being repaired remains with
the government contractor. The term "direct consumable supplies" does not
include tangible personal property that is incorporated into real
property. |
| (c) |
"Government contract"
means a contract directly between the United States Department of Defense or
the National Aeronautics and Space Administration and a government contractor,
for the purpose of national defense, to sell services or tangible personal
property which contain the appropriate title passing clauses for overhead
materials and direct consumable supplies. The term "government contract" does
not include any contract providing for the construction, improvement,
maintenance, or repair of or to real property, or to the purchase of tangible
personal property for use in fulfilling such contracts. |
| (d) |
"Government contractor" means any person
who enters into a government contract, for the purpose of national defense,
directly with the United States Department of Defense or the National
Aeronautics and Space Administration to sell services or tangible personal
property. This can include a manufacturer, modifier, assembler or repairer of
tangible personal property, or seller of services. The term "government
contractor" also includes a subcontractor who enters into a contract directly
with a government contractor as defined in the first sentence of this paragraph
and who incorporates the appropriate title passing clauses. The term
"government contractor" does not include any person who enters into a contract
to construct, improve, maintain, or make repairs on or to real property, or
make purchases of tangible personal property for use in fulfilling such
contracts. |
| (e) |
"Overhead materials"
means any tangible personal property used or consumed in the performance of a
contract between the United States Department of Defense or the National
Aeronautics and Space Administration and a government contractor, the cost of
which is charged to an expense account and allocated to various United States
government contracts based upon generally accepted accounting principles, and
consistent with government contract accounting standards. The term "overhead
materials" does not include tangible personal property which is incorporated
into real property. |
|
| (3) |
Application of Exemption.
| (a) |
Direct
Consumable Supplies, Tools or Equipment. Sales to a government contractor of
direct consumable supplies, tools or equipment, are considered to be sales for
resale to the United States Department of Defense or the National Aeronautics
and Space Administration if used in a government contract containing the
appropriate title passing clauses. The exemption will apply to these sales even
though the tangible personal property does not become a component part of the
tangible personal property or the services provided by the government
contractor. The government contractor may purchase direct consumable supplies,
tools or equipment without payment of the tax by issuing a properly executed
Certificate of Exemption, Form ST-5, to the appropriate vendor. If the
government contractor uses the tangible personal property prior to title
passing to the United States Department of Defense or the National Aeronautics
and Space Administration, the tax will apply to the sales or use by the
government contractor. |
| (b) |
Overhead
Materials. Sales to a government contractor of overhead materials used
exclusively in a government contract containing the appropriate title passing
clauses for overhead materials shall qualify for exemption by issuing a
properly executed Certificate of Exemption, Form ST-5, to the appropriate
vendor. The exemption from sales and use tax for overhead materials shall stand
repealed for transactions beginning January 1, 2011, and thereafter. |
| (c) |
Sales to a government contractor of
direct consumable supplies, tools, equipment or overhead materials for use in a
government contract which do not contain the appropriate title passing clauses,
or any other use, shall not qualify for exemption from sales or use tax. The
appropriate title passing clauses contained in the government contract will
determine if title to the direct consumable supplies and overhead materials
passes to the government, and the time at which title does pass. In the absence
of the appropriate title passing clauses, the tax will apply to either the sale
or use by a government contractor of such direct consumable supplies and
overhead materials. In a case where the cost of direct consumable supplies or
overhead materials are charged to an expense account which is then allocated to
various locations, cost centers or contracts, some of which are engaged in
non-government contracts, it will be considered that title did not pass prior
to use of the property, and tax will apply with respect to the purchase or use
of the property charged to the expense account. If the item is specifically
accounted for as being charged to a specific government contract containing the
appropriate title passing clauses the tax will not apply. Property will be
considered charged to a specific government contract when it is allocated
pursuant to the Cost Accounting Standard Disclosure Statement, generally
accepted accounting principles, or accounting standards promulgated by the Cost
Accounting Standards Board. The government contractor shall be responsible for
maintaining adequate records to substantiate the exemption provided for in this
Rule. Any government contractor who fails to maintain sufficient documentation
shall pay the amount of tax that would have been imposed on the sales or use of
such tangible personal property. |
|
| (1) |
Exemption. In accordance
with O.C.G.A. § 48-8-3(68) and
subject to this Regulation, sales of Computer Equipment are exempt from sales
and use tax.
| (a) |
"Computer Equipment" means
any individual computer or organized assembly of hardware or software,
including, but not limited to, a server farm, mainframe or midrange computer,
mainframe driven high-speed print and mailing devices, and workstations
connected to those devices via high bandwidth connectivity such as a local area
network, wide area network, or any other data transport technology which
performs one of the following functions: storage or management of production
data, hosting of production applications, hosting of application systems
development activities, or hosting of applications systems testing.
| 1. |
Beginning January 1, 2001, "Computer
Equipment" excludes:
| (i) |
Telephone central
office equipment or other voice data transport technology, including any
wireline or wireless telecommunication system; and |
| (ii) |
Equipment with imbedded computer
hardware or software which is primarily used for training, product testing, or
in a manufacturing process. |
|
| 2. |
Beginning January 1, 2024, "Computer
Equipment" also excludes:
| (i) |
Computers or
devices issued to employees, including, but not limited to, smartphones,
tablets, wearables, personal computers, and laptops; and |
| (ii) |
Prewritten computer software. |
|
| 3. |
Examples of items that do not
qualify as Computer Equipment include, but, are not limited to: cable;
telephone central office equipment; voice data transmission equipment;
equipment with imbedded hardware or software used primarily for training,
product testing or in manufacturing; scanners; printers and paper; ink and
toner; wrist and mouse pads; tools; all removable storage media such as,
diskettes, compact disks or tapes; and parts for maintenance or repair of
computer system hardware. |
|
|
| (2) |
Exemption limitation.
Pursuant to O.C.G.A. § 48-8-3(68)(A)(ii),
beginning January 1, 2024, each taxpayer claiming the exemption must pay ten
percent of all state and local sales and use taxes imposed under the laws of
this state on the first $15 million of Computer Equipment purchased each year
for which this exemption is claimed. Taxpayer's additional purchases of
Computer Equipment in the calendar year, specifically, purchases that exceed
the first $15 million, can be purchased tax-exempt.
| (a) |
Persons making a tax-free purchase under
this exemption must report and remit to the Department the tax imposed under
O.C.G.A. § 48-8-3(68)(A)(ii)
on the sales and use tax return that is next due after the purchase. |
| (b) |
Persons claiming this exemption by refund
will receive a refund of ninety percent of tax imposed on the first $15 million
of eligible purchases for which exemption is claimed under O.C.G.A. § 48-8-3(68). |
|
| (3) |
Exemption
requirements. To qualify for the exemption,
| (a) |
The Computer Equipment must be purchased
or leased exclusively for operational use in this state at a High-Technology
Company. For purposes of this Regulation,
| 1. |
"High-Technology Company" means a business entity or Company Facility
classified under the North American Industrial Classification System codes
("NAICS code") specified in O.C.G.A. § 48-8-3(68).
| (i) |
For taxpayers other than those applying
on a Company Facility basis, the NAICS code on a taxpayer's income tax return
determines whether the taxpayer is a High-Technology Company, unless the
commissioner, in his or her sole discretion, determines that the NAICS code
does not accurately reflect the taxpayer's business activity. |
|
| 2. |
"Company Facility" means a
single physical establishment in this state, as defined in the North American
Industrial Classification System (NAICS) United States Manual, where the
primary business activity is designated within the NAICS codes as specified in
O.C.G.A. § 48-8-3(68)(A) and
approved by the commissioner.
| (i) |
For
taxpayers applying on a Company Facility basis, the NAICS code designated on
the Application for Certificate of Exemption (Form ST-CE1) determines whether
the facility is a High-Technology Company, unless the commissioner, in his or
her sole discretion, determines that the NAICS code does not accurately reflect
the facility's business activity. |
|
|
| (b) |
The total combined value of all Computer
Equipment purchased or leased during any calendar year must meet the following
thresholds:
| 1. |
From January 1, 2001 through
December 31, 2023, the total fair market value of Computer Equipment purchased
or leased during any calendar year must exceed $15 million. |
| 2. |
Beginning January 1, 2024, the total fair
market value of taxable Computer Equipment purchased or leased during any
calendar year must equal or exceed $15 million. |
| 3. |
For calculating the $15 million threshold,
the fair market value of leased Computer Equipment is the book value of the
Computer Equipment at the time of lease's inception. The book value of leased
Computer Equipment counts toward the exemption threshold for the initial
calendar year of the lease and does not count toward the threshold in
subsequent years. In addition, the exercise of any option to purchase such
Computer Equipment under a qualifying lease must not be used in subsequent
years to meet the $15 million requirement. |
|
| (c) |
For entities qualifying for the exemption
on a Company Facility basis, only Computer Equipment purchased or leased
exclusively for operational use at the Company Facility are eligible for the
exemption and count toward the threshold. |
| (d) |
Beginning July 1, 2021, each taxpayer
claiming the exemption must comply with the reporting requirement in paragraph
(6) of this Regulation. |
| (e) |
The
eligible purchasers or lessees of such Computer Equipment must obtain a
Certificate of Exemption from the commissioner as provided in paragraph (4) of
this Regulation. The application for such Certificate must contain a specific
schedule of planned purchases or leases, or both, of qualified Computer
Equipment for the calendar year for which the application is filed. |
| (f) |
The Computer Equipment must be purchased
or leased exclusively for operational use in this state by a High-Technology
Company. |
| (g) |
A High-Technology
Company, other than a Company Facility, that is affiliated in any manner with a
nonqualified corporation, partnership, limited liability company, or other
similar entity, must derive more than fifty (50) percent of its gross revenues
from the activities designated by its NAICS code in arms-length transactions
with entities with which it has no affiliation. |
|
| (4) |
Certificates of exemption.
| (a) |
Any purchaser or lessee desiring to
secure the benefits of the exemption provided by O.C.G.A. § 48-8-3(68) must
file an Application for Certificate of Exemption (Form ST-CE1). The application
must include disclosure of business name, address, specific Company Facility
location (if applicable), NAICS code as indicated on the federal income tax
return for the High-Technology Company, NAICS code for a specific Company
Facility (if applicable), whether equipment is purchased, leased or both,
anticipated dates of purchase or lease, and a schedule of the Computer
Equipment to be purchased or leased for the entire calendar year including
purchase price, or in the case of a lease, the book value. In addition, the
commissioner may require such other information as deemed necessary for the
determination of the claim for exemption. These requirements are applicable to
all purchasers and lessees, including holders of direct pay permits. |
| (b) |
Upon approval of an application, the
commissioner will issue a certificate of exemption (Form ST-CE2) to the
company. The certificate of exemption relieves the Computer Equipment supplier
from the collection of the sales and use tax on Computer Equipment if the
supplier accepts the certificate in accordance with O.C.G.A. § 48-8-38, from a High-Technology
Company. |
| (c) |
Where the certificate
of exemption (Form ST-CE2) has not previously been obtained and tax is
collected on the purchase or lease of Computer Equipment that may be qualified
for exemption, the purchaser or lessee may apply for a refund of such tax. The
Claim for Refund (Form ST-12) must be accompanied by an Application for
Exemption (Form ST-CE1). As provided by O.C.G.A. § 48-2-35.1, refunds issued pursuant
to this exemption do not bear interest. |
|
| (5) |
Tax, penalty, and interest.
If any purchases or leases fail to meet the requirements of this exemption, the
High-Technology Company will be liable for tax, penalty, and interest on the
purchases or leases. |
| (6) |
Reporting.
| (a) |
Beginning July 1,
2021, each High-Technology Company that has been issued a certificate of
exemption must report to the Department a list of the facilities into which
Computer Equipment exempted under O.C.G.A. § 48-8-3(68) during
the preceding calendar year was incorporated, as well as the amount of taxes
exempted under O.C.G.A. § 48-8-3(68) during
the preceding calendar year. |
| (b) |
The report is due by March 31st of each year following the year the
High-Technology Company utilized a certificate of exemption pursuant to
O.C.G.A. § 48-8-3(68). |
| (c) |
The report is subject to the
confidentiality provisions of O.C.G.A. § 48-2-15. |
| (d) |
The Department will not issue a
certificate of exemption under O.C.G.A. § 48-8-3(68) for
the calendar year following the reporting year to any High-Technology Company
that has failed to comply with the reporting required by O.C.G.A. § 48-8-3(68). |
| (e) |
The report must be submitted by email to
the Department's Tax Policy Division at tax.policy@dor.ga.gov. |
|
| (1) |
Definitions. For the
purposes of this Regulation, the following definitions and explanations of
terms shall apply:
| (a) |
Bullion.
The term "bullion" means bars, ingots, or coins of gold, silver,
platinum or any combination thereof, which has been processed by coining,
smelting, refining, or in some other manner and where the sales price depends
upon the content of the metal and not the form. Such term shall not include
jewelry, works of art, or items used for industrial or professional
purposes. |
| (b) |
Coins or
Currency. The term "coins or currency" means a coin or currency or any
combination thereof made of gold, silver, platinum, or other metals or paper
which has been or may be used as legal tender under the laws of any state, the
United States of America, or any foreign state or nation. Such term shall not
include any coin or currency or combination thereof that has been incorporated
into a piece of jewelry or artwork. |
| (c) |
Legal Tender. The term
"legal tender" means coin or currency that at the time of issue or sale a
creditor would be required to accept in payment of a debt. |
| (d) |
Medal. The term "medal"
means a medallion, token, or coin that has never been accepted as legal tender
and was created to commemorate a specific event, place, person or
thing. |
|
| (2) |
Bullion, Coins or Currency. The sale of bullion, coins or currency
is not subject to sales and use tax. The dealer is required to maintain
documentation of the exempt transaction as provided for within this
Regulation. |
| (3) |
Jewelry or
Other Works of Art. The sale of jewelry or other works of art that
contain bullion, coins or currency is subject to sales and use tax. |
| (4) |
Medals. The sale of medals
is subject to sales and use tax. However, medals of gold, silver, platinum, or
any combination thereof, whose sales price is based on the content of the
metal, and not the form, are not subject to the tax. |
| (5) |
Records. The dealer is
required to maintain proper documentation of any transaction, whole or in part,
which is considered to be exempt. Proper documentation for the purpose of
transactions involving coins or currency will describe the country of issue,
denomination, and sales price of each item, items, lots, groups or sets of
coins or currency. In the case of a transaction involving bullion, the proper
documentation will describe the metal, quantity, form (such as bars or ingots),
and sales price of each item, items, lots, groups or sets of bullion. |
| (1) |
Purpose. The purpose of this
Rule is to provide guidance regarding the sales and use tax exemption for
certain clothing, computers, computer components, software, school supplies,
Energy Star Qualified Products, and WaterSense Products pursuant to O.C.G.A.
§ 48-8-3(75) and
(82). |
| (2) |
Definitions. For purposes of
this Rule only:
| (a) |
"Clothing" means all human
wearing apparel suitable for general use and includes footwear." "Clothing"
excludes "clothing accessories" and "clothing equipment." Examples of exempt
and taxable items are listed in paragraph (4) of this Rule. |
| (b) |
"Clothing accessories or equipment" means
incidental items worn on the person or in conjunction with
"clothing." |
| (c) |
"Computer" means an
electronic device that accepts information in digital or similar form and
manipulates it for a result based on a sequence of instructions. Such term does
not include cellular telephones. The term "computer" includes computer
components that are commonly regarded as essential parts of a computer
purchased for noncommercial home or personal use. Examples of exempt and
taxable items are listed in paragraph (5) of this Rule. |
| (d) |
"Computer software" means a set of coded
instructions designed to cause a computer or automatic data processing
equipment to perform a task. |
| (e) |
"Covered item" means clothing, computers, computer components, prewritten
computer software, school supplies, school art supplies, school computer
supplies, school instructional materials, Energy Star qualified product, or
WaterSense product. |
| (f) |
"Delivery
charges" means charges by the seller of personal property or services for
preparation and delivery to a location designated by the purchaser of personal
property or services, including but not limited to transportation, shipping,
postage, handling, crating, and packing. |
| (g) |
"Eligible property" means:
| 1. |
Articles of clothing with a sales price of
$100.00 or less per item; |
| 2. |
Computers, computer components, and prewritten computer software purchased for
noncommercial home or personal use with a sales price of $1,000.00 or less per
item; |
| 3. |
School supplies, school
art supplies, school computer supplies, and school instructional materials
purchased for noncommercial use with a sales price of $20.00 or less per item;
or |
| 4. |
Energy Star Qualified
Products or WaterSense Products purchased for noncommercial home or personal
use with a sales price of $1,500.00 or less per product. |
|
| (h) |
"Energy Star Qualified
Product" means any dishwasher, clothes washer, air conditioner, ceiling fan,
fluorescent light bulb, dehumidifier, programmable thermostat, refrigerator,
door, or window that is not purchased for trade, business, or resale and that
meets the energy efficient guidelines set by the United States Environmental
Protection Agency and the United States Department of Energy and is authorized
to carry the Energy Star label. |
| (i) |
"Exemption period" for clothing, computers, computer components, prewritten
computer software, school supplies, school art supplies, school computer
supplies, and school instructional materials means the time period provided in
O.C.G.A. § 48-8-3(75)(A).
"Exemption period" for Energy Star Qualified Products and WaterSense Products
means the time period provided in O.C.G.A. § 48-8-3(82)(A). |
| (j) |
"Layaway sale" means a transaction in
which articles are set aside for future delivery to a customer who makes a
deposit; agrees to pay the balance of the sales price over a period of time;
and, at the end of the payment period, receives the merchandise. |
| (k) |
"Prewritten computer software" means
"computer software," including prewritten upgrades, that is not designed and
developed by the author or other creator to the specifications of a specific
purchaser. The combining of two or more "prewritten computer software" programs
or prewritten portions thereof does not cause the combination to be other than
"prewritten computer software." "Prewritten computer software" includes
software designed and developed by the author or other creator to the
specifications of a specific purchaser when it is sold to a person other than
the specific purchaser. Where a person modifies or enhances "computer software"
of which the person is not the author or creator, the person shall be deemed to
be the author or creator only of such person's modifications or enhancements.
"Prewritten computer software" or a prewritten portion thereof that is modified
or enhanced to any degree, where such modification or enhancement is designed
and developed to the specifications of a specific purchaser, remains
"prewritten computer software;" provided, however, that where there is a
reasonable, separately stated charge or an invoice or other statement of the
price given to the purchaser for such modification or enhancement, such
modification or enhancement shall not constitute "prewritten computer
software." |
| (l) |
"Sales price limit"
means the maximum sales prices for eligible property. |
| (m) |
"School art supply" means an item
commonly used by a student in a course of study for artwork and includes only
the following items:
| 3. |
Paintbrushes for artwork |
| 4. |
Sketch and drawing pads |
|
| (n) |
"School computer supply" means an item
commonly used by a student in a course of study in which a computer is used and
includes only the following items:
| 1. |
Computer storage media |
| 2. |
Handheld
electronic schedulers, except devices that are cellular phones |
| 3. |
Personal digital assistants, except
devices that are cellular phones |
| 4. |
Computer printers, printer paper, and printer ink |
|
| (o) |
"School instructional material" means
written material commonly used by a student in a course of study as a reference
and to learn the subject being taught and includes only the following items:
| 2. |
Reference maps and globes |
|
| (p) |
"School supply" means an item commonly
used by a student in a course of study and includes only the following items:
| 10. |
Folders (expandable, pocket, plastic, and
manila) |
| 11. |
Glue, paste, and paste
sticks |
| 19. |
Paper (loose leaf ruled notebook paper,
copy paper, graph paper, tracing paper, manila paper, colored paper, poster
board, and construction paper) |
| 20. |
Pencil boxes and other school supply boxes |
|
| (q) |
"WaterSense Product" means a
product authorized to bear the United States Environmental Protection Agency
WaterSense label. |
|
| (3) |
Exemption for eligible property. Except as otherwise provided in
this Rule, sales of eligible property are exempt from sales and use tax during
the applicable exemption period. |
| (4) |
Exemption for clothing.
Clothing with a sales price of $100.00 or less per item is exempt if
purchased within the applicable exemption period.
| (a) |
The application of the exemption to the
sale of clothing during the exemption period is illustrated by the following
examples:
| 1. |
A customer purchases three
shirts for $45.00 per shirt. All three items qualify for the exemption, even
though the customer's total purchase price ($135.00) exceeds $100.00. |
| 2. |
A customer purchases a pair of shoes for
$110.00. The purchase does not qualify for the exemption because the customer's
purchase price exceeds $100.00. |
| 3. |
A customer purchases a tie for $50.00, a shirt for $55.00, and a suit for
$300.00. The purchase of the tie and shirt qualify for the exemption, but the
suit purchase does not qualify. |
| 4. |
A customer purchases football pads for $75.00 and football cleats for $50.00.
These purchases qualify for the exemption. |
| 5. |
A customer purchases a gold pin for
$99.00. The purchase does not qualify for the exemption because the item is a
clothing accessory, which is not eligible property. |
|
| (b) |
Exempt clothing includes but is not
limited to:
| 1. |
Antique/vintage
clothing |
| 2. |
Aprons, household and
shop |
| 3. |
Athletic clothing, e.g.,
ski wear, uniforms, tennis apparel |
| 4. |
Athletic pads and guards |
| 6. |
Baby receiving blankets |
| 9. |
Bathing suits and caps |
| 10. |
Bathing suit cover-ups |
| 12. |
Belts for weightlifting or back
support |
| 16. |
Coats and jackets of all types |
| 17. |
Capes, shawls, and wraps |
| 18. |
Corsets and corset laces |
| 22. |
Diapers, children and adult, including
disposable and reusable diapers and diaper covers |
| 25. |
Footwear of all types, including cleated
and spiked shoes |
| 27. |
Garters and garter
belts |
| 29. |
Gloves and mittens for any
purpose |
| 35. |
Insoles and inserts for shoes |
| 50. |
Skates (ice, roller, roller
blades) |
| 57. |
Underwear, including long or thermal
underwear |
| 58. |
Uniforms, athletic
and non-athletic |
|
| (c) |
Taxable items
include but are not limited to:
| 2. |
Belt buckles sold
separately |
| 4. |
Clothing accessories or
equipment |
| 5. |
Corsages and
boutonnieres |
| 7. |
Costume masks sold separately |
| 11. |
Eyewear, non-prescription |
| 13. |
Hair notions, including but not limited
to barrettes, hair bows, and hair nets |
| 19. |
Life jackets and vests |
| 20. |
Masks and goggles, protective and
swim |
| 21. |
Materials used to repair
clothing and shoes |
| 22. |
Patches and
emblems sold separately |
| 23. |
Personal flotation devices |
| 24. |
Sewing equipment and supplies, including but not limited to knitting needles,
patterns, pins, scissors, sewing machines, sewing needles, tape measures, and
thimbles |
| 25. |
Sewing materials that
become part of "clothing," including but not limited to buttons, heels, soles,
fabric, lace, thread, yarn, and zippers |
| 30. |
Wigs and hair pieces. |
|
|
| (5) |
Exemption for
computers, computer components, and prewritten computer software.
Computers, computer components, and prewritten computer software with a
sales price of $1,000.00 or less per item purchased for noncommercial home or
personal use are exempt if purchased within the applicable exemption period.
| (a) |
The application of the exemption to the
sale of computers, computer components, and prewritten computer software is
illustrated by the following examples:
| 1. |
A
customer purchases three computer cables for $45.00 each and a computer for
$1,000.00. All of the items qualify for the exemption, even though the
customer's total purchase price ($1,045.00) exceeds $1,000.00. |
| 2. |
A customer purchases a computer for
$1,100.00. The purchase does not qualify for the exemption because the
customer's purchase price exceeds the $1,000.00 sales price limit. |
| 3. |
A customer purchases a computer cable for
$50.00, a modem for $55.00 and a computer for $1,300.00. The purchase of the
cable and modem qualify for the exemption, but the computer purchase does not
qualify because it exceeds the sales price limit. |
| 4. |
A customer purchases cell phone for
$600.00. The cell phone does not qualify for the exemption because it is not
eligible property. |
| 5. |
A customer
purchases a printer for $200.00 and cartridges for $300.00 without purchasing a
personal computer. The purchase is eligible for the exemption. |
| 6. |
A customer purchases a computer for
$1,000.00 to use in his business. The computer is not exempt because the
customer purchased it for commercial use. |
|
| (b) |
Exempt computers, computer components,
and prewritten computer software include but are not limited to:
| 1. |
Batteries (designed for a
computer) |
| 3. |
Car adaptors for
laptops |
| 4. |
Central processing
units |
| 6. |
Computers, including
electronic book readers and laptop, desktop, handheld, tablet, and tower
computers, consisting of a central processing unit, random access memory, and a
storage drive |
| 7. |
Data storage
devices (e.g., DVDs, CDs, flash drives, diskettes, memory cards), excluding
those designed for use only in digital cameras or other taxable items |
| 8. |
Docking stations (designed for a
computer) |
| 9. |
Hard drives
(computer) |
| 17. |
Personal digital assistant devices
(except cellular telephones) |
| 19. |
Prewritten
computer software |
| 21. |
Printers (including
"all-in-one" models) |
|
| (c) |
Taxable items include but are not limited
to:
| 2. |
Cases for electronic devices |
| 3. |
CDs/DVDs (music, voice or prerecorded
items) |
| 8. |
Game controllers (e.g., joy
sticks) |
| 9. |
Game systems and
consoles |
| 10. |
MP3 Players or
accessories |
| 14. |
Items purchased for
commercial use |
|
|
| (6) |
Exemption for school supplies.
School supplies, school art supplies, school computer supplies, and
school instructional materials purchased for noncommercial use with a sales
price of $20.00 or less per item are exempt if purchased within the applicable
exemption period.
| (a) |
The application of the
exemption to the sale of school supplies during the exemption period is
illustrated by the following examples:
| 1. |
A
customer purchases a box of pencils for $5.00. The purchase qualifies for the
exemption. |
| 2. |
A customer purchases
a calculator for $30.00. The purchase does not qualify for the exemption
because the sales price exceeds the $20.00 sales price limit. |
| 3. |
A customer purchases ten composition books
for $2.50 each. The total purchase of $25.00 qualifies for the exemption
because the sales price for each item does not exceed $20.00. |
| 4. |
A customer purchases a box of pens for
$10.00, paper for $15.00, and chalk for $3.00 and pays with a business credit
card or business check. The purchase will be presumed to be purchased for
commercial use and, therefore, taxable. |
|
| (b) |
Exempt items are listed in the
definitions of "school supplies," "school art supplies," "school computer
supplies," and "school instructional materials." |
| (c) |
Taxable items include but are not limited
to:
| 5. |
Supplies purchased for a commercial use
(i.e., used in a trade or business). |
|
|
| (7) |
Exemptions for Energy
Star Qualified Products and WaterSense Products. Energy Star Qualified
Products and WaterSense Products with a sales price of $1,500.00 or less per
item purchased for noncommercial home or personal use are exempt if purchased
within the applicable exemption period. The application of the exemptions to
the sale of Energy Star Qualified Products and WaterSense Products during the
exemption period is illustrated by the following examples:
| (a) |
A customer purchases an air conditioner
from a retail dealer. The air conditioner carries the Energy Star label and has
a sales price of $1,550.00. The purchase does not qualify for the exemption
because the sales price exceeds $1,500.00. |
| (b) |
A customer purchases a toilet for $800.00
and a urinal for $750.00 in a single transaction. Both products are for
personal use and carry the WaterSense label. Both products qualify for the
exemption since the sales price of each water efficient product is equal to or
less than $1,500.00. |
| (c) |
A
contractor enters into a contract to furnish and install an air conditioner for
a customer for a total contract price of $1,000.00. The air conditioner carries
the Energy Star label. The exemption does not apply to this transaction because
this is a lump sum contract and not a retail sale of tangible personal
property. The contractor is considered the consumer of the tangible personal
property used in the performance of a real property construction contract. The
contractor owes sales or use tax on the purchase of the air
conditioner. |
| (d) |
A customer enters
into a contract with a home improvement store to furnish and install a toilet
for $1,000.00. The toilet carries the WaterSense label. The exemption does not
apply to this transaction, as the home improvement store is acting as a
contractor and is therefore the consumer of tangible personal property (i.e.,
the toilet) in the performance of a real property construction
contract. |
| (e) |
A customer purchases
for personal use a door for $500.00 and five windows for $250.00 each at a home
improvement store. The customer takes possession of the products at the time of
purchase and does not enter into an installation contract with the home
improvement store. The door and windows carry the Energy Star label. The door
and windows qualify for the exemption since the sales price of each energy
efficient product is equal to or less than $1,500.00. Note: the customer did
not enter into an installation contract, contrary to the facts in the previous
example. |
| (f) |
Assume the same facts
as the previous example. After purchasing the items tax exempt, the customer
provides them to a contractor to install in the customer's home. Pursuant to
O.C.G.A. § 48-8-63(c), the
contractor owes use tax on the fair market value of the items. |
|
| (8) |
Sales price limits.
| (a) |
Articles normally sold as
a unit. Articles normally sold as a unit may not be priced separately
and sold as individual items in order to meet the sales price limit. The
following examples illustrate the application of the rule to the exemption:
| 1. |
A pair of shoes sells for $200.00. The
pair of shoes cannot be split in order to sell each shoe for $100.00 to qualify
for the exemption. |
| 2. |
A suit is
normally priced at $300.00. The suit cannot be split into a coat and slacks so
that one of the articles may be sold for $100.00 or less to meet the sales
price limit. However, articles that are normally sold as separate articles,
such as a sport coat and slacks, may continue to be sold as separate articles
and qualify for the exemption. |
| 3. |
A
packaged gift set consisting of a wallet (ineligible item) and tie (covered
item) does not qualify for the exemption. |
|
| (b) |
"Buy one, get one free" and other
similar offers. If a dealer offers "buy one, get one free" or "two for
the price of one" on covered items, the covered items are exempt only if the
sales price falls within the sales price limit during the exemption period. If
a dealer offers "buy one, get one for a reduced price," the two prices cannot
be averaged to meet the sale price limit.
The following examples illustrate the application of this
rule to the exemption:
| 1. |
A dealer
offers "buy one, get one free" on a pair of shoes. The first pair of shoes has
a sales price of $99.00 and the second pair is free. Both pairs of shoes
qualify for the exemption because the first pair of shoes does not exceed the
$100.00 sales price limit. |
| 2. |
A
dealer offers "buy one, get one free" on a pair of shoes. The first pair of
shoes has a sales price of $150.00 and the second pair is free. The transaction
does not qualify for the exemption because the first pair of shoes exceeds the
$100.00 sales price limit. |
| 3. |
A
coat is purchased for $120.00 and a second coat is purchased for half price
($60.00) at the time the first coat is purchased. The second coat will qualify
for the exemption, but tax will be due on the first coat. In this example, the
sales price of the items may not be averaged in order to qualify for the
exemption. |
|
| (c) |
Discounts, coupons, and rebates. The application of the exemption to
discounts, coupons, and rebates extended to a covered item during the exemption
period is illustrated by the following examples:
| 1. |
Dealer discounts taken by the customer at
the time of sale reduce the sales price of items for purposes of determining
whether the sales price falls within the sales price limit. For example, during
the exemption period, if a dealer sells a pair of jeans with a sales price of
$110.00 at a 10 percent discount, the exemption applies because the actual
sales price of the jeans is $99.00. |
| 2. |
Store coupons used at the time of sale
reduce the sales price for purposes of determining whether a covered item
qualifies for the exemption. For example, during the exemption period, if a
dealer offers a reduction in sales price of $5.00 through a store coupon for a
coat with a sales price of $105.00, the exemption applies to the purchase
because the dealer's actual sales price to the customer is $100.00. |
| 3. |
Manufacturers' coupons (i.e., coupons
whereby the manufacturer reimburses the dealer the amount discounted by the
coupon) do not reduce the sales price for purposes of determining whether the
item meets the sales price limit. For example, if a customer gives a dealer a
manufacturer's coupon for $100.00 toward the purchase of a computer with a
sales price of $1,100.00, the exemption does not apply because the $1,100.00
price exceeds the sales price limit. |
| 4. |
Rebates to the customer made after the
point of sale do not reduce the sales price of the purchased item for purposes
of determining whether or not an item is taxable. For example, a customer
purchases a pair of jeans for $110.00. After the sale the customer receives a
$10.00 rebate. The exemption does not apply because the sales price exceeds
$100.00. |
| 5. |
An "instant rebate"
that is actually a store discount reduces the sales price for purposes of
determining whether or not the item qualifies for the exemption. |
| 6. |
If a discount applies to the total amount
paid by a purchaser rather than to the sales price of a particular item and the
purchaser has purchased covered items and taxable property, the seller should
allocate the discount based on the total sales price of the taxable property
compared to the total sales price of all property sold in that same
transaction. For example, a purchaser buys a pair of jeans for $110.00 and an
umbrella for $20.00 with a store coupon for 20 percent off the total sale.
After the discount, the jeans are exempt because they cost $88.00. |
|
| (d) |
Gift certificates and
gift cards. A gift certificate or gift card cannot be used to reduce the
selling price of a covered item to meet the sales price limit. For example, a
purchaser uses a $50.00 gift card to buy a computer with a sales price of
$1,025.00. The computer is not exempt because it exceeds the $1,000.00 sales
price limit. |
| (e) |
Delivery
charges. Delivery charges are not included in the purchase price for
purposes of determining whether an item falls within the sales price limit. For
example, an article of clothing is purchased for $99.00, and a shipping charge
of $2.00 is imposed. The clothing is eligible property because the sales price
is below the sales price limit. |
|
| (9) |
Timing rules. Eligible
property is exempt if the purchaser pays in full during the exemption period,
regardless of when the customer places the order, when the seller accepts the
order, when the seller completes the electronic payment transaction, or when
the order is delivered.
| (a) |
Electronic
payments. For purposes of this Rule, a purchaser using an electronic
payment method, such as a debit card or a credit card, tenders payment at the
time when the purchaser provides the seller with the purchaser's payment
information. The following examples illustrate the rules pertaining to
electronic payment transactions:
| 1. |
A customer
places an order and gives the seller the customer's credit card information
during the exemption period for the purchase of eligible property. The seller
charges the credit card and ships the item after the exemption period. The item
qualifies for exemption. |
| 2. |
A
customer places an order and gives the seller the customer's credit card
information before the exemption period for the purchase of eligible property.
The seller charges the credit card and ships the item during the exemption
period. The item is not exempt because payment was not tendered during the
exemption period. |
|
| (b) |
Layaway sales. A sale of eligible property under a layaway sale
qualifies for exemption ifthe purchaser makes the final payment during the
exemption period even if delivery is made after the exemption period.
| 1. |
A customer places eligible property on
layaway during the exemption period. The customer makes final payment after the
exemption period. The exemption does not apply. |
| 2. |
A customer places eligible property on
layaway before the exemption period and makes the final payment during the
exemption period. The entire purchase price of the property is exempt because
the customer paid in full during the exemption period. The exemption applies
even if the customer retrieves the property after the exemption
period. |
|
| (c) |
Rental property. Recurring periodic rental payments are not exempt even
if made during the exemption period. A full payment for the rental of eligible
property is exempt if made during the exemption period. The following examples
illustrate the tax treatment of rental charges during the exemption period:
| 1. |
A customer pays in full during the
clothing sales tax holiday exemption period for the rental of a tuxedo. The
rental charge is exempt from sales tax. |
| 2. |
A customer pays monthly for the rental of
an air conditioning unit. He makes one of his payments during the Energy Star
sales tax holiday exemption period. The sales tax holiday exemption does not
apply to the payment; thus, he must pay tax on the rental payment unless
another exemption applies. |
|
| (d) |
Exchanges. The application
of the exemption to an exchange (i.e., wherein a purchaser returns an item and
receives a credit toward the purchase of a new item) of eligible property is
illustrated by the following examples:
| 1. |
A
customer purchases eligible property during the exemption period, but later
exchanges the item for a product with the same price. No additional tax is due,
even though the exchange is made after the exemption period, because the credit
on the exchange reduces the sales price to zero. |
| 2. |
A customer purchases eligible property
during the exemption period. After the exemption period has ended, the customer
exchanges the product for a product with a higher price. Sales tax is due on
the difference between the price of the newly purchased item and the price of
the returned item. |
| 3. |
If a customer
purchases eligible property before the exemption period, but during the
exemption period the customer returns the item and receives credit toward the
purchase of a different item of eligible property, sales tax paid on the
returned item must be refunded to the customer. |
|
| (e) |
Gift certificates and gift
cards. Eligible property purchased during the exemption period using a
gift certificate or gift card is exempt, regardless of when the gift
certificate or gift card was purchased. Covered items purchased after the
exemption period using a gift certificate or gift card are taxable even if the
gift certificate or gift card was purchased during the exemption
period. |
| (f) |
Rain
checks. A rain check allows a customer to purchase an item at a certain
price at a later time because the particular item is out of stock. Eligible
property purchased during the exemption period using a previously issued rain
check qualifies for the exemption. However, a rain check issued during the
exemption period will not qualify eligible property for the exemption if the
property is purchased after the exemption period. |
| (g) |
Different time zones. The
time zone of the seller's location determines the authorized time period for a
sales tax holiday. |
|
| (10) |
Records.
| (a) |
Dealer
records. Dealers are not required to obtain an exemption certificate for
sales of eligible property during the exemption period. However, a dealer's
records should clearly identify the type of item sold, the date on which the
item was sold, the sales price of all items, and any tax charged. |
| (b) |
Customer receipts for
refunds. For the period of 60 calendar days following the last day of
the exemption period, when a customer returns an item that would qualify for
the exemption, no refund of tax may be given unless the customer provides a
receipt or invoice showing tax was paid or the dealer has sufficient
documentation to show that tax was paid on the specific covered item. This
60-day period is set solely for the purpose of designating a time period during
which the customer must provide documentation that shows that sales tax was
paid on returned merchandise. The 60-day period is not intended to change a
seller's policy on the time period during which the seller will accept
returns. |
|
| (11) |
Calculation of tax on delivery charges.
| (a) |
Delivery charges associated with taxable
sales are taxable regardless of whether the charge is optional (i.e., not
required to complete the underlying sale of the tangible personal property) or
separately stated. |
| (b) |
Delivery
charges associated with nontaxable sales are not taxable. |
| (c) |
If a shipment includes exempt item(s) and
taxable property (including an otherwise eligible item with a sales price in
excess of the price limit), the seller must tax the percentage of the delivery
charge allocated to the taxable property but does not have to tax the
percentage allocated to the eligible property. To determine the taxable portion
of the delivery charge, the seller should allocate the delivery charge by
using:
| 1. |
a percentage based on the total
sales prices of the taxable property compared to the total sales prices of all
property in the shipment; or |
| 2. |
a
percentage based on the total weight of the taxable property compared to the
total weight of all property in the shipment.
For example, two articles of clothing are purchased - one for
$110.00 and one for $99.00. The seller charges a $5.00 shipping fee. The $99.00
item qualifies for the exemption. Since the $110.00 item exceeds the sales
price limit, it is taxable. The total sales price of the two items, without
taking into account the shipping fee, is $209.00. 53 percent of that amount
represents taxable items; therefore, 53 percent of the shipping fee ($2.65) is
taxable.
|
|
|
| (12) |
Reporting Exempt Sales. No
special reporting procedures are necessary. Exempt sales on eligible items made
during the exemption period must be reported as non-taxable sales. |
| (1) |
Purpose. This Rule sets forth the application of Georgia sales and
use tax concerning the sale or use of computer software and computer-related
services. |
| (2) |
Definitions. For the purposes of this Rule, the following
definitions and explanations of terms shall apply:
| (a) |
"Application program" means a set of
statements or instructions that when incorporated in a machine-usable medium is
capable of causing a machine or device having information processing
capabilities to indicate, perform, or achieve a particular function, task, or
result for the end user. Application programs include any other computer
software that does not qualify under subparagraph (2)(h) or (2)(n). |
| (b) |
"Computer" means the components and
accessories that constitute the physical computer assembly that accepts
information in digital or similar form and manipulates it for a result based on
a sequence of instructions. A computer includes but is not limited to these
components and accessories: a central processing unit, keyboard, console,
monitor, memory unit, disk drive, tape drive or reader, terminal, printer,
plotter, modem, document sorter, and optical reader. |
| (c) |
"Computer-related services" means
services including, but not limited to, computer programming, installation,
time-sharing, consulting, training, data processing, system testing, and
information retrieval. |
| (d) |
"Computer software"means any computer data, program or routine, or any set of
one or more programs or routines, which are used or intended for use to cause
one or more computers, pieces of computer-related peripheral equipment,
automatic processing equipment, or any combination thereof, to perform a task
or set of tasks. Without limiting the generality of the foregoing, the term
"computer software" shall include operating programs, application programs,
system programs, and any other subdivisions (such as assemblers, compilers,
generators, and utility programs). |
| (e) |
"Custom computer software" means computer
software, including custom updates, which is designed and developed by the
author to the specifications of a specific purchaser. Any subsequent sale of
custom software to a different purchaser, customer, person, or entity shall be
deemed the sale of prewritten computer software. |
| (f) |
"Delivered electronically" means
delivered to the purchaser by means other than tangible storage
media. |
| (g) |
"Load and leave" means
delivery to the purchaser by use of tangible storage media where such tangible
storage media is not physically transferred to the purchaser. |
| (h) |
"Operating program" means a set of
statements or instructions that when incorporated into a machine or device
having information processing capabilities is an interface between the computer
hardware and the application program or system program. |
| (i) |
"Prewritten computer software," also
known as "canned computer software," means computer software that is designed,
prepared, or held for general distribution or repeated use, or software
programs developed in-house and subsequently held or offered for repeated sale,
lease, license, or use. |
| (j) |
"Software license agreement" means the transfer of possession and the right to
use computer software for the purpose of reproduction or other use in a
computer. |
| (k) |
"Software maintenance
agreement" means providing error corrections, fixes, improvements, technical
support upgrades and updates to purchased or licensed computer software under a
single agreement. |
| (l) |
"Streamlined
Sales Tax Project" ("SSTP") is an effort created by state governments, with
input from local governments and the private sector, to simplify and modernize
sales and use tax collection and administration. The SSTP's proposals include
tax law simplifications, more efficient administrative procedures, and emerging
technologies to substantially reduce the burden of tax collection. The SSTP
will develop measures to design, test and implement a sales and use tax system
that simplifies sales and use taxes. |
| (m) |
"Streamlined Sales and Use Tax Agreement"
describes the agreement developed by the Streamlined Sales Tax Project, which
provides for uniform definitions, terms of art, collection and registration
responsibilities, governing board procedures, and other articles of importance
related to sales and use tax. These items will provide for simplification and
uniformity when adopted by the implementing states. |
| (n) |
"System program" means a set of
statements or instructions that interacts with the operating program that is
developed, licensed, and intended to build, test, manage, or maintain
application programs. |
|
| (3) |
Computer software sold in a
tangible medium.
| (a) |
Prewritten
computer software. The sale, lease, rental, license, or use of prewritten
computer software is subject to sales and use tax when sold in a tangible
medium. Prewritten computer software, even though modified or enhanced to the
specifications of a purchaser, remains prewritten computer software.
| 1. |
The combining of two or more prewritten
computer software programs or prewritten portions thereof does not cause the
combination to be anything other than prewritten computer software. |
| 2. |
Prewritten computer software includes
computer software designed and developed by the author or other creator to the
specifications of a specific purchaser when it is sold in a tangible medium to
a person other than the specific purchaser. |
|
| (b) |
Custom computer software. The sale,
lease, rental, license, or use of custom computer software is a professional
service transaction not subject to sales and use tax.
| 1. |
A purchaser may receive custom software by
means of a tangible medium without changing the taxability of the purchase. The
transfer to the purchaser in a tangible medium is deemed to be merely an
incidental part of the sale of a nontaxable professional service. |
| 2. |
Sales of multiple copies or license
agreements of custom software to the original purchaser are not subject to
sales and use tax. Custom software becomes prewritten computer software when it
is sold to someone other than the person for whom it was designed and
developed. |
| 3. |
Charges for custom
computer software that are not separately stated on the dealer's invoice from
the sale, lease, or rental of hardware, machinery, or equipment are considered
subject to the tax as part of the hardware, machinery, or equipment
sale. |
|
| (c) |
Modified
prewritten computer software.
| 1. |
Prewritten
computer software or a prewritten portion thereof that is modified or enhanced
to any degree, where such modification or enhancement is designed and developed
to the specifications of a specific purchaser, remains prewritten computer
software. |
| 2. |
If there is a
separately stated charge on the dealer's invoice for the modification or
enhancement of prewritten computer software, the charge for modification or
enhancement is not subject to sales and use tax. |
|
|
| (4) |
Computer software sold
in an intangible form.
| (a) |
Computer
software delivered electronically is not a sale of tangible personal property
and therefore is not subject to sales or use tax. The dealer's invoice,
purchase contract, or other documentation must indicate the method of delivery.
If the method of delivery is not indicated on the dealer's invoice, purchase
contract, or other documentation, delivery will be presumed to have been made
through a tangible medium, and the burden will be upon the taxpayer to
establish to the satisfaction of the Department that the computer software was
delivered electronically. |
| (b) |
If a
dealer delivers computer software electronically and also provides the same
computer software to the purchaser in a tangible medium, the transaction shall
be treated as the taxable sale of tangible personal property unless the
software qualifies as custom software. |
|
| (5) |
Computer software installation and
maintenance agreements.
| (a) |
Computer
software installation services. Charges for computer software installation
services are not subject to sales and use tax when such charges are separately
stated on the dealer's invoice. |
| (b) |
Software maintenance agreements - charges bundled. Software maintenance
agreements that are bundled, as opposed to separately stated, on the dealer's
invoice for prewritten software provided in a tangible medium are subject to
sales and use tax. |
| (c) |
Software
maintenance agreements - charges separately stated. Separately stated charges
for software maintenance agreements, when such agreements include prewritten
software updates, upgrades, or enhancements delivered in a tangible medium and
include support services, are deemed to be taxable at 50 percent of the
software maintenance agreement's total stated sales price. The dealer may elect
to use an alternate percentage if the percentage can be established to the
satisfaction of the Department that the alternate percentage is based upon
reasonable accounting methods. For example, the alternate percentage may be
derived using the cost or estimated retail sales price of the software update,
upgrade or enhancement. If it is determined that the alternate percentage used
by the dealer is not based on reasonable accounting methods, the Department
shall require the dealer to remit additional sales and use tax based upon 50
percent of the stated sales price of the software maintenance
agreement. |
| (d) |
Software maintenance
agreements - updates, upgrades, or enhancements only. Separately stated charges
for software maintenance agreements that include only prewritten software
updates, upgrades, or enhancements delivered in a tangible medium, and no
support services, are subject to sales and use tax on the total sales
price. |
| (e) |
Software maintenance
agreements - support services only. Separately stated charges for software
maintenance agreements that include only support services, and no prewritten
software updates, upgrades, or enhancements delivered in a tangible medium, are
not subject to sales and use tax. |
| (f) |
Software maintenance agreements - custom
software. Separately stated charges for custom software maintenance agreements,
including software updates, upgrades, or enhancements delivered in a tangible
medium, are not subject to sales and use tax. |
| (g) |
Taxed software maintenance agreements -
Deductions. If a dealer has previously taxed the sale of a software maintenance
agreement, and software updates, upgrades, or enhancements are not provided in
a tangible medium or are not provided at all, then the dealer may claim a
deduction on their sales and use tax return for the taxable amount of the
software maintenance agreement. In order to claim the deduction, the dealer
must be able to show that sales tax was previously collected and remitted to
the Department and that a corresponding credit for all sales tax paid on the
software maintenance agreement has been issued to the purchaser. |
| (h) |
Streamlined Sales and Use Tax Agreement.
In the event that the Streamlined Sales and Use Tax Agreement adopts a
different taxable percentage or amount with respect to software maintenance
agreements, the percentage as stated in subparagraph (5)(c), as well as the
ability to establish a different percentage to the satisfaction of the
Department, shall be replaced with the taxable percentage or amount provided in
the Streamlined Sales and Use Tax Agreement. If the Streamlined Sales and Use
Tax Agreement is silent with respect to the taxability of software maintenance
agreements, the provisions of subparagraph (5)(c) shall apply. |
|
| (6) |
Miscellaneous.
| (a) |
Load and leave. Prewritten or modified
computer software transferred to the retail purchaser by means of load and
leave is not subject to sales and use tax. The transaction is not deemed to be
the sale of tangible personal property when the retailer installs the computer
software and the computer software does not remain permanently in the
purchaser's possession in a tangible medium after the computer software has
been installed. |
| (b) |
Computer-related services. The sale of a computer-related service is not
subject to sales and use tax when the charge is separately stated on the
dealer's invoice. If the charge for a computer-related service is bundled
together with a taxable retail sale, lease, rental, license or use of
prewritten computer software, then the entire charge is subject to
tax. |
| (c) |
Software license
agreement. The licensing of prewritten or modified computer software or the
renewal/extension of such licensing agreement(s) is subject to sales and use
tax as a lease or rental of tangible personal property when the original
prewritten or modified computer software was delivered in a tangible
medium. |
| (d) |
Prewritten computer
software sold, leased, rented or licensed and delivered in a tangible medium,
is exempt from Georgia sales and use tax when the transaction qualifies for
exemption under O.C.G.A. §§ 48-8-3(34),
48-8-3(34.1), 48-8-3(34.2),
48-8-3(36), 48-8-3(36.1), 48-8-3(58), or 48-8-3(68). |
|
| (1) |
Purpose. This Rule sets forth the
application of sales and use tax to the operation of hunting preserves, hunting
clubs, or other similar operations conducting outdoor recreational activities
related to hunting animals. |
| (2) |
Definitions. For the purposes of this Rule, the following definitions and
explanation of terms shall apply:
| (a) |
"Hunting Preserves and Hunting Clubs" means those business operations that
allow the general public the privilege of hunting animals in a designated area
for a charge or fee. Such business may also routinely offer lodging, meals,
sales or rental of tangible personal property, and other types of entertainment
or recreational activity. |
| (b) |
"Real
Property Lease" means a lease of land that grants the privilege of hunting
animals located on the land. |
|
| (3) |
Sales.
| (a) |
Charges or fees, except as provided for
in subparagraph (3)(b) of this Rule, for conducting outdoor recreational
activities related to hunting animals in Georgia are subject to sales tax.
Outdoor recreational activities related to hunting animals may include, but are
not limited to:
| 1. |
Admission or membership
charges or fees paid to a hunting preserve, hunting club, or any other similar
operations that provide the privilege of hunting stocked and/or wild
game; |
| 2. |
Hunting charges or fees
derived on a basis of per bird or animal, additional bird or animal, or
released bird or animal; |
| 3. |
Providing lodging or accommodations; |
| 4. |
Providing meals or beverages; |
| 5. |
Providing skeet, trap, or target range
shooting; |
| 6. |
Providing
transportation to, from or within the hunting preserve, hunting club or any
other similar operations that provide the privilege of hunting
animals; |
| 7. |
Rental of firearms,
hunting gear, or other tangible personal property; |
| 8. |
Sales of ammunition, clothing, or other
tangible personal property; and |
| 9. |
Trophy fees and game release charges or fees. |
|
| (b) |
Charges or fees for a state-hunting
license, guide services, cleaning, processing and packing of game, voluntary
gratuities, taxidermy, the boarding of animals, or the training of dogs are not
subject to sales tax when separately itemized on the seller's
invoice. |
|
| (4) |
Purchases.
| (a) |
The purchase of live game birds, food,
beverages, ammunition, skeet birds, items exclusively used for rental, and
other items purchased for resale by a hunting preserve, hunting club, or other
similar operations providing for the outdoor recreational activity of hunting
animals are not subject to tax when a properly executed Certificate of
Exemption, Form ST-5, is provided to the dealer. Alcoholic beverages
are only considered purchases for resale when the operator of a hunting
preserve, hunting club, or other similar operations holds a valid Georgia
alcohol license. |
| (b) |
Purchases of
equipment and supplies used in the operation of a hunting preserve, hunting
club, or other such place providing for the outdoor recreational activity of
hunting animals are subject to sales and use tax at the time of purchase.
Examples include, but are not limited to, motor vehicles, all-terrain vehicles,
boats, rafts, oars, motors, hunting dogs, horses, hunting stands, cooking gear,
safety equipment, targets, skeet and trap equipment, brochures, animal feed,
motor fuel, furniture, and promotional give-away items. |
|
| (5) |
A real property lease or membership in a
private club that provides access solely to its members and not to the general
public for the exclusive right to hunt animals is not subject to sales
tax. |
| (1) |
Purpose.
This Rule addresses the application of sales and use tax to purchases
and sales made by establishments that sell prepared food. Such establishments
are generally referred to as restaurants and include but are not limited to
coffee shops, cafeterias, short order cafes, luncheonettes, taverns,
lunchrooms, soda fountains, food carts, food trucks, itinerant restaurants,
catering establishments, and similar facilities. |
| (2) |
Definitions. The terms
defined in Rule
entitled "Food
Exemptions" apply to this Rule. In addition, the following definitions apply:
| (a) |
"Food packaging" means tangible personal
property that is used to contain food or beverages. "Food packaging" includes
but is not limited to containers, boxes, wrappers, cups, dinner plates, trays,
platters, and the accompanying lids. |
| (b) |
"Premises" means the total
space and facilities in or on which the seller conducts business, including but
not limited to parking areas for the convenience of in-car consumption, counter
space, indoor or outdoor tables, chairs, benches, and similar
conveniences. |
|
| (3) |
Sales of food. Pursuant to O.C.G.A. § 48-8-3(57),
certain food items are exempt from state sales tax. Rule
addresses the
taxation of food and is summarized as follows:
| (a) |
Prepared food. "Prepared
food" is subject to both state and local sales and use tax. The term "prepared
food" generally includes meals sold by a restaurant but does not include food
items entirely prepared off the seller's premises. "Prepared food" includes the
following:
| 1. |
Food sold in a heated state or
heated by the seller at the seller's location. This includes food heated by the
seller at any time before the sale, even if the item is in an unheated state at
the time of sale. |
| 2. |
Food with two
or more food ingredients mixed or combined at the seller's location by the
seller for sale as a single item. |
| 3. |
Food sold with eating utensils provided by
the seller. Food is considered to be sold with eating utensils provided by the
seller when the food is customarily intended for consumption with the utensils
provided. The presence of self-service utensils in a restaurant does not make
otherwise exempt food taxable unless it is customarily intended that the food
be consumed with those utensils.
Example 1: Seller purchases tea prepared
off-site and sells the tea in cups. The seller does not add any ingredients and
does not heat the tea. The tea is subject to both state and local tax because
the cup is a "utensil" according to Rule
.
Example 2: The seller purchases and subsequently
sells single-serving size bottled beverages. Utensils are not customarily used
to consume single-serving bottled beverages; therefore, single-serving bottled
beverages sold for off-premises consumption are subject only to local
tax.
Example 3: The seller sells bottles of barbecue
sauce prepared off-site. The seller neither heats nor adds ingredients to the
sauce. Utensils are not customarily used to consume barbecue sauce; therefore,
bottles of barbecue sauce sold for off-premises consumption are subject only to
local tax.
|
|
| (b) |
Food and food ingredients. "Food and food ingredients" sold to
natural persons for consumption off premises is not subject to state sales and
use tax, but is subject to local sales and use tax.
| 1. |
For purposes of the food exemption in
O.C.G.A. § 48-8-3(57), "food
and food ingredients" does not include prepared food, alcoholic beverages,
dietary supplements, tobacco, and items ingested or chewed primarily for
medical or hygiene purposes, such as cough drops, throat lozenges, breath
strips, and over-the-counter medications. |
| 2. |
The term "food and food ingredients"
includes food that is prepared off-premises. For example, if sold for
off-premises consumption without utensils, cakes prepared off-premises are
exempt from state sales and use tax, but are subject to local sales and use
tax. However, if utensils customarily intended to be used to consume the cake
are provided or made available by the seller, the cake is subject to both state
and local sales and use tax as "prepared food." |
| 3. |
"Food and food ingredients" sold for
on-premises consumption is subject to both state and local sales and use tax.
Thus, a bag of chips sold by a restaurant for on-premises consumption is
subject to state and local sales and use tax. |
| 4. |
The state sales and use tax exemption for
"food and food ingredients" is not available to businesses purchasing food and
food ingredients. Unless another exemption applies, business entities,
including nonprofit organizations, must pay both state and local sales and use
tax on all purchases of food and food ingredients. |
|
| (c) |
Food sold in bulk. Food
sold in bulk is not afforded special tax treatment, but is taxed in accordance
with the rules set forth in this paragraph (3).
Example 1: Seller purchases cole slaw prepared
off-site in bulk. Without heating or adding ingredients to the cole slaw, the
seller then resells the cole slaw in a bulk size (multi-serving) package for
off-premises consumption. The seller makes forks available at no charge. The
cole slaw is prepared food since it is sold with utensils and is thus subject
to both state and local tax.
Example 2: Assume the same facts as Example 1,
except the seller makes no utensils available. The cole slaw is exempt from
state tax.
Example 3: Seller purchases tea prepared
off-site in bulk. Seller then sells the tea in gallon jugs. The seller does not
add any ingredients and does not heat the tea. The seller makes cups available
at no charge. The tea is subject to both state and local tax.
Example 4: Same facts as in Example 3; but
instead of cups, the seller makes straws available at no charge. The tea is
exempt from state tax because gallon jugs of tea are not customarily consumed
with straws.
Example 5: Same facts as in Example 3, but the
seller makes no utensils available. The tea is exempt from state tax.
Example 6: The seller sells 10-pound bags of ice
prepared off-premises. The seller makes cups available at no charge. The ice is
subject to both state and local tax.
Example 7: Same facts as in Example 6, but the
seller makes no utensils available. The ice is exempt from state tax.
Example 8: The seller makes ice on-site and
sells it in 10-pound bags. The seller makes no utensils available. The ice is
exempt from state tax because making ice involves neither mixing nor heating
ingredients.
|
| (d) |
Combination meals. If the sales price of a combination meal is
attributable to products that are subject to tax at different tax rates, the
total price must be treated as attributable to the products subject to tax at
the highest tax rate unless the seller can identify, by reasonable and
verifiable standards from the seller's books and records that are kept in the
regular course of business for other purposes, including nontax purposes, the
portion of the sales price attributable to the products subject to tax at the
lower tax rate.
For example, a lunch consisting of hot chicken (subject to
state and local tax because it is sold heated) and a bag of chips is sold for
off-premises consumption for a single price of $3.95. No eating utensils are
provided by the seller. The seller must charge both state and local sales tax
on the entire sales price of the meal. However, the seller may instead charge
state and local sales tax for the chicken and only local sales tax for the bag
of chips if the seller can demonstrate with its books and records the portion
of the total sales price attributable to the chips, that the chips were not
prepared by the seller on premises, that the chips were sold without utensils
customarily used to consume chips, and that the chips were sold for
off-premises consumption.
|
|
| (4) |
Employee meals. Rule
addresses employee
meals and is summarized as follows:
| (a) |
The
sale of food and beverages by an employer to an employee is subject to sales
tax on the total sales price charged to the employee. |
| (b) |
Food and beverages provided by an
employer without charge to an employee are taxable to the employer. The
employer must remit use tax on the cost of the food and beverages as shown in
the employer's books and records. In the event that the exact cost of the
employee's food and beverages is not represented in the employer's records, the
cost shall be deemed to be fifty percent (50%) of the retail sales price of the
food and beverages. |
|
| (5) |
Gratuities.
| (a) |
An amount,
whether designated as a tip, gratuity, or service charge, is mandatory and
subject to tax when
| 1. |
negotiated between the
seller and the customer in advance of a meal or event; |
| 2. |
unilaterally added to the bill by the
seller; or |
| 3. |
added to the bill by
the customer pursuant to a statement printed on a menu, sign, advertisement, or
brochure indicating that tips, gratuities, or service charges are
mandatory. |
|
| (b) |
Notwithstanding subparagraph (a)2, when a tip, gratuity, or service charge is
added unilaterally to the bill by the seller, the amount added is optional and
not subject to tax when the seller clearly and conspicuously states on the
bill, menu, or signage located in an area visible to customers that tips,
gratuities, and service charges are optional and may be removed from the bill
at the customer's discretion. |
|
| (6) |
Purchases by restaurants.
| (a) |
Food packaging. Single-use
food packaging used to contain food that is transferred to the customer is
exempt from sales and use tax pursuant to O.C.G.A. § 48-8-3(94). |
| (b) |
Items for sale. A retailer
may purchase food items and other items of tangible personal property for
resale without payment of sales and use tax and hold such property for sale at
retail in the regular course of business. A toy sold as a component part of a
meal may be purchased tax free as an item for resale. |
| (c) |
Single-use items provided with
meals sold. The following single-use items that are provided or made
available to restaurant customers without charge are a component part of a meal
sold to the customer and may be purchased tax free for resale: straws, swizzle
sticks, stirrers, napkins, doilies, forks, sporks, knives, spoons, toothpicks,
chopsticks, tray liners, and pre-moistened disposable cloths. |
| (d) |
Food items provided with meals
sold. Condiments and other food items that are provided or made
available to restaurant customers without a separate charge as a component part
of a meal sold to the customer may be purchased tax free for resale.
Example 1: A restaurant places ketchup bottles
on dining tables for customers' use. The restaurant may purchase the ketchup
tax free for resale.
Example 2: A restaurant puts ketchup packets in
bags containing "to go" meals sold to customers and makes ketchup packets
available on its self-service island. It also provides ketchup in a dispenser
on the self-service island. The restaurant may purchase tax free for resale all
of the ketchup in this example.
Example 3: A restaurant provides peanuts or
tortilla chips and salsa as a complement to the sale of other food or beverage
items. The restaurant may purchase the peanuts, chips, and salsa tax free for
resale.
|
| (e) |
Items
used or consumed by the restaurant.
| 1. |
Tangible personal property used or consumed by a restaurant is not purchased
for resale and as such is subject to tax. Such taxable property includes but is
not limited to complimentary meals furnished to employees or customers; tables,
tents, chairs, bars, linens, cloth napkins, silverware, glassware, chinaware,
serving utensils, table covers, and reusable containers; ice used to chill food
or beverages before serving; floral arrangements; and single-use items that are
not a component part of a meal sold to a customer. Examples of taxable
single-use items include paper towels, plastic serving utensils, aluminum foil
used for cooking or storage, toilet paper, plastic wrap, crayons provided for
customers' on-premises entertainment, paper placemats, and paper
menus. |
| 2. |
Condiments and single-use
items served as a component part of a complimentary meal are considered used or
consumed by the restaurant and as such are subject to tax. |
| 3. |
Single-use containers used to transport
complimentary meals are exempt from sales and use tax pursuant to O.C.G.A.
§ 48-8-3(94). |
|
| (f) |
Duty to keep records. Tangible
personal property purchased for resale may be subject to tax unless the
retailer can identify, by reasonable and verifiable standards from its books
and records that are kept in the regular course of business for any purpose,
including nontax purposes, that such property has been resold or is designated
for resale. |
|
| (7) |
Delivery. Delivery charges by the seller associated with the sale of food and
other taxable tangible personal property are taxable, even if such charges are
separately itemized. |
| (8) |
Other
service charges.
| (a) |
Charges by the seller
for any services that are necessary to complete the sale of taxable tangible
personal property are taxable, even if such charges are separately itemized.
Example 1: A caterer requires customers purchasing alcohol to
purchase bartender and ID checking services. The bartender and ID checking
service charges are taxable.
Example 2: A caterer charges a fuel surcharge when delivering
food. The fuel surcharge is taxable.
|
| (b) |
Charges by the seller for any services
that are not necessary to complete the sale of taxable tangible personal
property are not subject to sales or use tax if separately itemized.
Example 1: A caterer provides coat checking as
an optional add-on service to a catered event. The coat checking service is
separately itemized on the customer's bill. The service is not taxable.
Example 2: Assume the same scenario as Example
1, but the charge is not separately itemized and is instead included in the
total catering charge. The coat checking service is taxable.
|
|
| (1) |
Purpose. This Rule addresses
the refund of sales tax under the Tourism Development Act ("the Act") as passed
in 2013. |
| (2) |
Definitions. For purposes of this Rule only:
| (a) |
"Agreement" means an agreement for a
Tourism Attraction Project between the Department of Community Affairs and an
Approved Company pursuant to O.C.G.A. § 48-8-275. |
| (b) |
"Annual Sales and Use Tax" means remitted
state sales and use taxes and remitted local sales and use taxes, subject to
Paragraph (3)(g), that were generated by sales to the general public at the
Approved Tourism Attraction during the calendar year immediately preceding the
date of filing the Sales and Use Tax Refund claim. |
| (c) |
"Approved Company" means the entity that
has submitted an application to undertake a Tourism Attraction Project that has
been approved pursuant to O.C.G.A. § 48-8-274. For each Tourism
Attraction Project, only one company may be approved under the Act. |
| (d) |
"Approved Costs" means:
| 1. |
For new Tourism Attractions:
| (i) |
Obligations incurred for labor and to
vendors, contractors, subcontractors, builders, suppliers, deliverymen, and
materialmen in connection with the acquisition, construction, equipping, and
installation of a new Tourism Attraction Project; |
| (ii) |
The costs of acquiring real property or
rights in real property and any costs incidental thereto; |
| (iii) |
All costs for construction materials
and equipment installed at the new Tourism Attraction Project; |
| (iv) |
The cost of contract bonds and of
insurance of all kinds that may be required or necessary during the course of
the acquisition, construction, equipping, and installation of a new Tourism
Attraction Project which is not paid by the vendor, supplier, deliveryman, or
contractor or otherwise provided; |
| (v) |
All costs of architectural and
engineering services, including but not limited to estimates, plans and
specifications, preliminary investigations, and supervision of construction and
installation, as well as for the performance of all the duties required by or
consequent to the acquisition, construction, equipping, and installation of a
new Tourism Attraction Project; |
| (vi) |
All costs required to be paid under the
terms of any contract for the acquisition, construction, equipping, and
installation of a new Tourism Attraction Project; |
| (vii) |
All costs required for the installation
of utilities, including but not limited to water, sewer, sewage treatment, gas,
electricity, communications, and similar facilities; and off-site construction
of utility extensions if paid for by the Approved Company; and |
| (viii) |
All other costs comparable with those
described in this subparagraph; or |
|
| 2.
|
For existing Tourism Attractions, any Approved Costs otherwise
specified in Subparagraph 1 for new Tourism Attractions; provided, however,
that such costs are limited to the expansion only of an existing Tourism
Attraction and not the renovation of an existing Tourism Attraction. |
|
| (e) |
"Approved Tourism Attraction"
means a Project that was approved pursuant to O.C.G.A. § 48-8-274 and that has since opened
to the public and become operational as a Tourism Attraction. |
| (f) |
"Expansion" means the addition of
equipment, facilities, or real estate to an existing Tourism Attraction for the
purpose of increasing its size, scope, or visitor capacity. |
| (g) |
"Incremental Sales and Use Tax" means
remitted state sales and use taxes and remitted local sales and use taxes,
subject to Paragraph (3)(g), that were generated by sales to the general public
at the Approved Tourism Attraction from the date on which construction of the
expansion Project is completed through the end of the calendar year immediately
preceding the date of filing the Incremental Sales and Use Tax Refund claim,
less the remitted state sales and use taxes and remitted local sales and use
taxes, subject to Paragraph (3)(g), that were generated by sales to the general
public at the Approved Tourism Attraction during the 12-month period preceding
the commencement of construction of the expansion Project that corresponds to
the time period for which post-expansion sales tax was collected. Refer to Form
ST-12 Tourism for examples demonstrating the calculation of Incremental Sales
and Use Tax. |
| (h) |
"Incremental Sales
and Use Tax Refund" means the amount equal to the lesser of the Incremental
Sales and Use Tax or 2.5 percent of the total of all Approved Costs incurred at
any time prior to January 1 of the year during which the claim for the
Incremental Sales and Use Tax Refund is filed. |
| (i) |
"Local Sales and Use Tax" means any sales
and use tax, excluding the sales tax for educational purposes levied pursuant
to Part 2 of Article 3 of Title 48, Chapter 8 of the Official Code of Georgia
and Article VIII, Section VI, Paragraph IV of the Georgia Constitution, that is
levied and imposed in an area consisting of less than the entire state, however
authorized. |
| (j) |
"Renovation" means
the restoration, rebuilding, redesign, repair, or replacement of worn elements
so that the functionality, quality, or attractiveness of buildings or
structures is equivalent to a former state. |
| (k) |
"Sales and Use Tax Refund" means the
amount equal to the lesser of the Annual Sales and Use Tax or 2.5 percent of
the total of all Approved Costs incurred at any time prior to January 1 of the
year during which the claim for the Sales and Use Tax Refund is
filed. |
| (l) |
"State tax incentive"
means a tax credit allowed under Chapter 7 of Title 48 or a state sales tax
exemption allowed under Chapter 8, Article 1 of Title 48. |
| (m) |
"Tourism Attraction" means a cultural or
historical site; a recreation or entertainment facility; a convention hotel and
conference center; an automobile race track with other tourism amenities; a
golf course facility with other tourism amenities; marinas and water parks with
lodging and restaurant facilities designed to attract tourists to the State of
Georgia; or a Georgia crafts and products center. The term excludes enterprises
that are primarily devoted to the retail sale of goods, shopping centers,
restaurants, or movie theaters. |
| (n) |
"Tourism Attraction Project" or "Project" means the construction or expansion
of a Tourism Attraction and includes the real estate acquisition, including the
acquisition of real estate by a leasehold interest with a minimum term of 30
years; the construction and equipping of a Tourism Attraction; the construction
and installation of improvements to facilities necessary or desirable for the
acquisition, construction, and installation of a Tourism Attraction, including
but not limited to surveys; installation of utilities, which may include water,
sewer, sewage treatment, gas, electricity, communications, and similar
facilities; and off-site construction of utility extensions if paid for by the
Approved Company. The term does not include the renovation of an existing
Tourism Attraction. |
|
| (3) |
Refund claims.
| (a) |
In the discretion of the
commissioner of economic development and the commissioner of community affairs,
in consideration of the execution of the Agreement and subject to the Approved
Company's compliance with the terms of the Agreement, an Approved Company will
be granted a Sales and Use Tax Refund for new Projects or an Incremental Sales
and Use Tax Refund for expansions of existing Tourism Attractions. |
| (b) |
The Approved Company is not obligated to
refund or otherwise return any amount of this Sales and Use Tax Refund to the
persons from whom the sales and use tax was collected. |
| (c) |
The term of the Agreement granting a
refund under the Act is ten years, commencing on the date the Tourism
Attraction opens for business and begins to collect sales and use taxes or, for
an expansion, the date construction is complete. |
| (d) |
For each calendar year or partial
calendar year occurring during the term of the Agreement, an Approved Company
must file with the Department of Revenue a properly completed Claim §for
Refund (Form ST-12 Tourism) by March 31 of the following year. |
| (e) |
No Sales and Use Tax Refund will be
granted to an Approved Company that is during a tax year simultaneously
receiving any other state tax incentive associated with any one Tourism
Attraction Project. A Sales and Use Tax Refund granted to an Approved Company
that is during a tax year simultaneously receiving another state tax incentive
is immediately due and payable to the state. |
| (f) |
Any Sales and Use Tax Refund will be
first applied to any outstanding tax obligation of the Approved Company that is
due and payable to the state. |
| (g) |
By resolution and at the discretion of the county and city, if any, where the
Tourism Attraction Project is to be located, the local sales and use tax may be
refunded under the same terms and conditions as any refund of state sales and
use taxes. |
| (h) |
Interest will not
accrue on refunds made under the Tourism Development Act. |
|
| (4) |
Compliance with the terms of the
Agreement. Receipt of a refund is conditioned upon compliance with the
Agreement between the Approved Company and the commissioner of economic
development and the commissioner of community affairs. In the event an Approved
Company fails to abide by the terms of the Agreement, then such Agreement is
void and all sales and use tax proceeds that were refunded are immediately due
and payable to the state. |
| (5) |
Transfer of rights, duties, and obligations to successor company. An Approved
Company may, in the discretion of the Governor, transfer its rights, duties,
and obligations under the Agreement to a successor company if the successor
company meets the qualifications of an Approved Company; and, upon such
approval by the Governor, such successor Approved Company is authorized to
receive the Sales and Use Tax Refunds for the remaining duration of the
Agreement if it abides by the terms of the Agreement. |
| (1) |
Purpose. This Rule addresses
the sales and use tax exemption in O.C.G.A. § 48-8-3(68.1) for certain
High-Technology Data Center Equipment. |
| (2) |
Definitions. For purposes of
this Rule, the following definitions apply:
| (a) |
"Data Center Owner" means the owner of a
High-Technology Data Center or any Related Members. |
| (b) |
"Exemption Start Date," used synonymously
with the term "Investment Start Date," means the date on or after July 1, 2018,
chosen by the Data Center Owner and indicated on its certificate of exemption
application, which begins the seven-year period during which the Minimum
Investment Threshold must be met. |
| (c) |
"High-Technology Data Center" means a
facility, campus of facilities, or array of interconnected facilities in this
state that:
| 1. |
Is developed to power, cool,
secure, and connect the Data Center Owner's equipment or the computer equipment
of the Data Center Owner's High-Technology Data Center Customers; |
| 2. |
Has an investment budget plan that meets
the High-Technology Data Center Minimum Investment Threshold; and |
| 3. |
Is located wholly within one county in
this state, unless otherwise approved by the Commissioner. |
|
| (d) |
"High-Technology Data Center Customer"
means a client, tenant, licensee, or end user of a High-Technology Data Center
that is a party to a contract with a Data Center Owner that holds a
High-Technology Data Center exemption certificate under this Rule. The contract
is subject to the requirements in paragraph (2)(d)1.
| 1. |
Contract Requirements.
| (i) |
The Data Center Owner must be a party to
the contract; |
| (ii) |
The contract
must be for data center services provided by the Data Center Owner at the
High-Technology Data Center location stated on the Data Center Owner's
High-Technology Data Center exemption certificate; and |
| (iii) |
The initial term of the contract must
be at least 36 months. |
|
| 2. |
A client, tenant, licensee, or end user of a High-Technology Data Center is a
High-Technology Data Center Customer only while such client, tenant, licensee,
or end user is a party to a contract described in paragraph (2)(d)1. |
| 3. |
The initial term of the contract may begin
before the Exemption Start Date for purposes of meeting the initial 36-month
term. However, the High-Technology Data Center Customer may only make exempt
purchases and uses of High-Technology Data Center Equipment during the period
set forth in paragraph (3)(b). |
| 4. |
If a qualifying contract is extended for any consecutive term after the initial
term, the customer remains a High-Technology Data Center Customer during such
term so long as the requirements of this Rule are met. |
|
| (e) |
"High-Technology Data Center Equipment."
| 1. |
Subject to the exclusion in paragraph
(2)(e)2., High-Technology Data Center Equipment means:
| (i) |
Computer equipment, as defined in
O.C.G.A. § 48-8-3(68), of a
Data Center Owner or such equipment of a High-Technology Data Center Customer
that is used or deployed in the High-Technology Data Center; and |
| (ii) |
The Data Center Owner's or
High-Technology Data Center Customer's materials, components, machinery,
hardware, software, or equipment, including but not limited to, emergency
backup generators, air handling units, cooling towers, energy storage or energy
efficiency technology, switches, power distribution units, switching gear,
peripheral computer devices, routers, batteries, wiring, cabling, or conduit,
which equipment or materials are used to:
| (I) |
Create, manage, facilitate, or maintain the physical and digital environments
for computer equipment in the High-Technology Data Center; |
| (II) |
Protect the High-Technology Data Center
Equipment from physical, environmental, or digital threats; or |
| (III) |
Generate or provide constant delivery
of power, environmental conditioning, air cooling, or telecommunications
services for the High-Technology Data Center. |
|
|
| 2. |
This term does not include Real Property,
as defined in this Rule. |
|
| (f) |
"High-Technology Data Center Minimum
Investment Threshold," used synonymously with the term "Minimum Investment
Threshold," means:
| 1. |
Creating and maintaining
an average of the qualifying number of New Quality Jobs during the Investment
Period as described in paragraph (4); and |
| 2. |
Making the qualifying aggregate
expenditures during the Investment Period, as described in paragraph
(4). |
|
| (g) |
"Investment
Period" means the seven-year period, chosen by the Data Center Owner, during
which the Minimum Investment Threshold must be met.
| 1. |
The Investment Period begins on the
Investment Start Date. |
| 2. |
The
Investment Period ends seven consecutive years after the Investment Start Date
on the same month and date as the Investment Start Date. |
| 3. |
The Investment Period may be any
consecutive seven-year period that begins on or after July 1, 2018, and ends on
or before December 31, 2031. |
|
| (h) |
"New Quality Job" means a new quality
job, as defined in O.C.G.A. § 48-7-40.17(a)(2),
that is created and maintained by the Data Center Owner or its customers and
that meets the requirements in paragraph (4). |
| (i) |
"Real Property" means land, any buildings
thereon, and any fixtures attached thereto. Fixtures are tangible personal
property that has been installed or attached to land or to any building thereon
and that is intended to remain permanently in its place. A consideration for
whether tangible property is a fixture is whether its removal would cause
significant damage to such property or to the real property to which it is
attached. |
| (j) |
"Related Member"
means a related member as defined in O.C.G.A. § 48-7-28.3 with respect to the
owner of a High-Technology Data Center. |
|
| (3) |
Scope of the Exemption.
| (a) |
The purchase and use of High-Technology
Data Center Equipment to be incorporated or used in a High-Technology Data
Center are exempt from state and local sales and use tax, subject to the
following conditions:
| 1. |
The High-Technology
Data Center Equipment must be incorporated or used in the High-Technology Data
Center named or described on the Data Center Owner's exemption
certificate; |
| 2. |
The purchaser must
be a Data Center Owner or a High Technology Data Center Customer; |
| 3. |
Such Data Center Owner must meet the
High-Technology Data Center Minimum Investment Threshold at the High-Technology
Data Center named or described on the Data Center Owner's exemption
certificate; |
| 4. |
Such Data Center
Owner must obtain a certificate of exemption; and |
| 5. |
If the purchaser is a High-Technology Data
Center Customer, the High-Technology Data Center Customer must obtain a
certificate of exemption. |
|
| (b) |
Subject to the terms and conditions of
this Rule,
| 1. |
A Data Center Owner holding a
High-Technology Data Center exemption certificate may make exempt purchases and
uses of High-Technology Data Center Equipment from the Exemption Start Date
through and including December 31, 2031; and |
| 2. |
A High-Technology Data Center Customer
holding an exemption certificate may make exempt purchases and uses of
High-Technology Data Center Equipment only during the effective dates on its
exemption certificate.
| (i) |
A High-Technology
Data Center Customer exemption certificate is effective beginning the later of
the Data Center Owner's Exemption Start Date or the start date of the contract
for data center services between the Data Center Owner and the High-Technology
Data Center Customer. A High-Technology Data Center Customer exemption
certificate ends the earlier of the date such contract ends or December 31,
2031. |
|
|
|
| (4) |
Minimum Investment
Threshold.
| (a) |
To meet the
High-Technology Data Center's Minimum Investment Threshold, the following
conditions must be met:
| 1. |
An average of the
qualifying number of New Quality Jobs must be created and maintained, as set
forth in paragraphs (4)(b) and (c), during the Investment Period; and |
| 2. |
The required amount of qualifying
aggregate expenditures must be spent, as set forth in paragraphs (4)(b) and
(d), during the Investment Period. |
|
| (b) |
The New Quality Jobs and aggregate
expenditure requirements are based on the population of the county in which the
High-Technology Data Center is located as reported in the United States
decennial census of 2010. If county population data from a more recent United
States decennial census is available as of the Investment Start Date, county
population must be based upon such data.
| 1. |
For Data Center Owners that apply for and receive a High-Technology Data Center
exemption certificate prior to May 9, 2022, the New Quality Jobs and aggregate
expenditure requirements are as follows:
| (i) |
For a High-Technology Data Center located in a county in this state having a
population greater than 50,000:
| (I) |
An average
of 20 New Quality Jobs; and |
| (II) |
$250 million in qualifying aggregate expenditures. |
|
| (ii) |
For a High-Technology Data Center
located in a county in this state having a population greater than 30,000 and
less than 50,001:
| (I) |
An average of 20 New
Quality Jobs; and |
| (II) |
$150 million
in qualifying aggregate expenditures. |
|
| (iii) |
For a High-Technology Data Center
located in a county in this state having a population less than 30,001:
| (I) |
An average of 20 New Quality Jobs;
and |
| (II) |
$100 million in qualifying
aggregate expenditures. |
|
|
| 2. |
For Data Center Owners that apply for and
receive a High-Technology Data Center exemption certificate on or after May 9,
2022, the Data Center Owner must meet the following New Quality Jobs and
aggregate expenditure requirements during the Investment Period, even if the
Investment Start Date begins before May 9, 2022:
| (i) |
For a High-Technology Data Center located
in a county in this state having a population greater than 50,000:
| (I) |
An average of 25 New Quality Jobs;
and |
| (II) |
$250 million in qualifying
aggregate expenditures. |
|
| (ii) |
For a High-Technology Data Center in a
county in this state having a population greater than 30,000 and less than
50,001:
| (I) |
An average of 10 New Quality Jobs;
and |
| (II) |
$75 million in qualifying
aggregate expenditures. |
|
| (iii) |
For a High-Technology Data Center
located in a county in this state having a population less than 30,001:
| (I) |
An average of 5 New Quality Jobs;
and |
| (II) |
$25 million in qualifying
aggregate expenditures. |
|
|
|
| (c) |
New Quality Jobs.
| 1. |
An employee occupying a New Quality Job
must:
| (i) |
Regularly work 30 hours or more per
week in the county where the High-Technology Data Center is located on matters
directly related to the High-Technology Data Center; and |
| (ii) |
Receive compensation for such work
described in paragraph (4)(c)1.(i) in an amount equaling or exceeding 110% of
the average wage for all industries of the county where the High-Technology
Data Center is located, as reported in the most recent Georgia Employment &
Wages report available on the day that the New Quality Job is first filled
during the Investment Period. The county average wage remains constant with
respect to that job position for the duration of the Investment
Period. |
|
| 2. |
For purposes
of satisfying the Minimum Investment Threshold, a Data Center Owner may count
New Quality Jobs created and maintained by the Data Center Owner and New
Quality Jobs created and maintained by the Data Center Owner's
customers. |
| 3. |
To determine the
average number of New Quality Jobs created and maintained during the Investment
Period, a Data Center Owner must count the number of New Quality Jobs on the
payroll by the last payroll period of each month during the Investment Period,
add the monthly numbers, and divide the sum by the number of months in the
Investment Period. |
|
| (d) |
Qualifying Aggregate Expenditures.
| 1. |
Qualifying expenditures are:
| (i) |
Expenditures
on the design and construction of the High-Technology Data Center (including
expenditures on Real Property); and |
| (ii) |
High-Technology Data Center Equipment to
be used or incorporated in the High-Technology Data Center. |
|
| 2. |
Qualifying expenditures made by
either the Data Center Owner or the High-Technology Data Center Customer may
count towards the Minimum Investment Threshold. |
| 3. |
Real Property expenditures count towards
the Minimum Investment Threshold only to the extent that the expenditures are
made by the Data Center Owner as part of the construction and design of the
High-Technology Data Center. The purchase of a pre-existing High-Technology
Data Center campus does not constitute "the construction and design of the
High-Technology Data Center" and therefore does not count toward the Minimum
Investment Threshold. While Real Property expenditures may count toward the
Minimum Investment Threshold, Real Property is not exempt under this
Rule. |
| 4. |
If a qualifying
expenditure is made pursuant to a lease, the term of which extends before or
after the Investment Period, the expenditure amount that may be used for
purposes of satisfying the expenditure requirement must be determined by
dividing the total amount to be paid pursuant to the lease by the number of
calendar years in the lease term and then multiplying that quotient by the
number of calendar years in the lease term that are during the Investment
Period. |
| 5. |
A Data Center Owner may
not count the purchase or lease of the same High-Technology Data Center
Equipment more than once. For example, if a Data Center Owner purchases
High-Technology Data Center Equipment and subsequently leases it to a
High-Technology Data Center Customer or a related member (as defined at
O.C.G.A. § 48-7-28.3), only one transaction,
either the original purchase or the subsequent lease, may count for purposes of
satisfying the Minimum Investment Threshold. |
|
|
| (5) |
Certificates of Exemption.
| (a) |
Application Process.
| 1. |
A Data Center Owner or High-Technology
Data Center Customer desiring to secure the benefits of the exemption provided
by O.C.G.A. § 48-8-3(68.1) must file an
application for a certificate of exemption. |
| 2. |
Only the owner of the High-Technology Data
Center or one Related Member may apply for a certificate of exemption for a
High-Technology Data Center. |
| 3. |
Applications must be filed electronically with the Department. |
| 4. |
A High-Technology Data Center exemption
application may request the applicant's legal name, mailing address, the
High-Technology Data Center location, Investment Start Date, the applicant's
Georgia income tax filing and payment history, the value of the applicant's
title or interest in Real Property owned in this state, a limited waiver of
confidentiality for the administration of this exemption, documentation
sufficient to show the likelihood of satisfying the High-Technology Data Center
Minimum Investment Threshold, and any other information required by the
Department for the determination of the claim for exemption. |
| 5. |
A High-Technology Data Center Customer
exemption application may request the applicant's legal name, mailing address,
name of the Data Center Owner that holds an exemption certificate and that has
contract with the applicant to provide data services at the High-Technology
Data Center listed on the Data Center Owner's exemption certificate, a copy of
such contract for data center services, and any other information required by
the Department for the determination of the claim for exemption.
| (i) |
The Department will not issue a
certificate of exemption to a High-Technology Data Center Customer until a
certificate of exemption has been issued to its corresponding Data Center
Owner. |
|
| 6. |
This
application requirement is applicable to holders of direct payment permits
granted under Regulation
. |
|
| (b) |
Issuance of Certificate.
| 1. |
Upon approval of the application,
including a determination that a Data Center Owner will more likely than not
meet the Minimum Investment Threshold, the Department will issue a certificate
of exemption to such Data Center Owner. |
| 2. |
A certificate of exemption issued to a
High-Technology Data Center Customer is for the exclusive use of the qualifying
applicant. A certificate of exemption issued to a Data Center Owner is for the
exclusive use of the owner of the High-Technology Data Center and its Related
Members but may be transferrable upon the sale of the High-Technology Data
Center and the approval of the Commissioner. |
|
| (c) |
Bond.
| 1. |
As a condition precedent to the issuance of a certificate of exemption to a
Data Center Owner, the Department, in the Commissioner's discretion, may
require a good and valid bond with a surety company authorized to do business
in this state. |
| 2. |
In determining
whether to require a bond and the value of such bond, the Commissioner will
consider factors, including, but not limited to, the value of the Data Center
Owner's title or interest in Real Property owned in this state as of the
application date and the Data Center Owner's Georgia tax filing and payment
history. |
| 3. |
If required, the bond
must be in an amount fixed by the Department, not to exceed $20
million. |
| 4. |
Such bond must be
forfeited and paid to the general fund in an amount representing all taxes and
interest required to be repaid if the Data Center Owner fails to meet the
Minimum Investment Threshold prior to the expiration of the seven-year
Investment Period. |
| 5. |
Such bond
will be released when the Data Center Owner timely meets the Minimum Investment
Threshold. |
| 6. |
High-Technology Data
Center Customers are not required to obtain a bond. |
|
| (d) |
Revocation.
| 1. |
A certificate of exemption issued pursuant
to this exemption to a Data Center Owner is subject to revocation if the
Department determines that such Data Center Owner has not complied with the
provisions of the exemption, including, but not limited to, the following:
| (i) |
During the Investment Period, the
Department determines that the Data Center Owner is not likely to meet the
applicable Minimum Investment Threshold; |
| (ii) |
At the conclusion of the Investment
Period, the Department determines the Data Center Owner failed to meet the
applicable Minimum Investment Threshold; |
| (iii) |
The Data Center Owner does not file the
annual report as required in paragraph (7); or |
| (iv) |
The Data Center Owner claims an income
tax credit in violation of paragraph (9). |
|
| 2. |
A certificate of exemption issued pursuant
to this Rule to a High-Technology Data Center Customer is subject to revocation
if the Department determines that such certificate holder has not complied with
the provisions of the exemption, including, but not limited to, the following:
| (i) |
The certificate of exemption of its
corresponding Data Center Owner is revoked; or |
| (ii) |
The High-Technology Data Center Customer
is not, or is no longer, a party to a contract in accordance with paragraph
(2)(d). |
|
| 3. |
Revocation
procedures for Data Center Owner's certificates of exemption.
| (i) |
If it is determined that there are
grounds for revocation of a Data Center Owner's certificate of exemption, the
Department will send written notice to the Data Center Owner stating the
grounds for revocation. Effective the 31st day
following the date of the notice, the Department will revoke the Data Center
Owner's certificate of exemption, unless:
| (I) |
within 30 days from the date of the notice, the Data Center Owner provides the
Department with a detailed plan to remedy each cause for revocation;
and |
| (II) |
the Department determines
that the Data Center owner is more likely than not to remedy each cause for
revocation within 90 days from the Department's receipt of the plan. |
|
| (ii) |
If the Department determines
that the Data Center Owner has failed to remedy each cause for revocation
within 90 days from the Department's receipt of the plan, then the Department
will revoke the Data Center Owner's certificate of exemption effective the
91st day after the Department's receipt of the plan.
The Department will notify the Data Center Owner in writing of the grounds for
revocation, the revocation date, and the procedure by which the certificate
holder may dispute the revocation. |
|
| 4. |
Once a certificate of exemption has been
revoked, the certificate holder must immediately notify all vendors to which
such certificate holder furnished the certificate of exemption that such
certificate of exemption is no longer valid. The certificate holder must
maintain records of notifications of revocation sent to vendors. |
| 5. |
It is unlawful for any person to attempt
to evade sales and use taxes by using a certificate of exemption obtained
through fraud or by using a certificate of exemption to which a purchaser is
not entitled. |
| 6. |
Upon the
revocation of the Data Center Owner's certificate of exemption, the owner of
the High-Technology Data Center and its Related Members will be liable for all
tax exempted or refunded under this exemption, plus interest as computed under
O.C.G.A. § 48-2-40. If tax and interest are
not paid within 90 days of the revocation of the certificate of exemption,
penalties will accrue pursuant to O.C.G.A. § 48-8-66. |
| 7. |
If a High-Technology Data Center
Customer's certificate of exemption is revoked, the customer, the owner of the
customer's corresponding High-Technology Data Center, and the owner's Related
Members may be liable, as provided below, for all tax exempted or refunded
under this exemption on the customer's purchases, plus interest as computed
under O.C.G.A. § 48-2-40. If tax and interest are
not paid within 90 days of the revocation of the certificate of exemption,
penalties will accrue pursuant to O.C.G.A. § 48-8-66.
| (i) |
If a High-Technology Data Center
Customer's certificate of exemption is revoked solely because its corresponding
Data Center Owner's certificate of exemption is revoked, the High-Technology
Data Center Customer is not required to repay the tax exempted or refunded
under this exemption on the customer's purchases. The owner of the customer's
corresponding High-Technology Data Center and the owner's Related Members are
required to repay such tax. |
| (ii) |
If
a High-Technology Data Center Customer certificate of exemption is revoked
because the certificate holder does not meet the definition of High-Technology
Data Center Customer, the purported customer is required to repay the tax
exempted or refunded under this exemption for periods when the purported
customer did not meet the definition of High-Technology Data Center
Customer. |
| (iii) |
If a
High-Technology Data Center Customer's certificate of exemption is revoked
solely because of the expiration of a qualifying contract with a certificated
Data Center Owner, neither the High-Technology Data Center Customer nor the
Data Center Owner is required to repay the tax exempted or refunded for periods
when the customer met the definition of a High-Technology Data Center
Customer. |
|
| 8. |
Nothing in
this Rule prohibits the reinstatement or reissuance of a certificate of
exemption to a qualified Data Center Owner or its customer. |
|
| (e) |
All certificates of exemption
issued to Data Center Owners pursuant to this exemption expire on December 31,
2031, by operation of law. |
|
| (6) |
Claiming the Benefit of the
Exemption.
| (a) |
Any person making a sale
or lease of High-Technology Data Center Equipment must collect the sales and
use tax unless the purchaser furnishes such seller with a valid and complete
certificate of exemption. |
| (b) |
A
High-Technology Data Center Equipment supplier is relieved from the collection
of sales and use tax on the sale or lease of High-Technology Data Center
Equipment if the supplier takes a certificate of exemption from a certificate
holder in good faith. |
| (c) |
Refund
Claims.
| 1. |
Subject to paragraph (6)(c)5. of
this Rule and other applicable laws, a refund claim may be filed for taxes paid
on purchases or uses qualifying for this exemption for any period on or after
July 1, 2018, during which the Data Center Owner or customer had not yet
applied for or received its certificate of exemption from the
Department. |
| 2. |
Claimants must
submit refund claims electronically. |
| 3. |
As a condition precedent to the issuance
of a refund, the claimant must apply for and receive its certificate of
exemption. |
| 4. |
As provided by
O.C.G.A. § 48-2-35.1, refunds issued pursuant
to this exemption do not bear interest. |
| 5. |
A refund claim may be filed by the
taxpayer at any time within three years after the date of the payment of the
tax to the Department. |
|
| (d) |
Notwithstanding otherwise applicable
recordkeeping requirements, any Data Center Owner or High-Technology Data
Center Customer claiming the benefit of this exemption must keep and preserve
all books and records as long as needed to support such claim. |
|
| (7) |
Annual Report.
| (a) |
Each Data Center Owner holding an
exemption certificate pursuant to this Rule must submit an annual report
electronically to the Department. The annual report is due on the dates set
forth in this paragraph or the first day following that is not a Saturday,
Sunday, legal holiday, or day on which the Federal Reserve Bank is closed.
| 1. |
The annual report must be submitted by
April 30 of each calendar year if the Data Center Owner or its High-Technology
Data Center Customer claimed or will claim the benefit of the exemption for
purchases in the prior calendar year. |
| 2. |
Notwithstanding paragraph (7)(a)(1), if
the Data Center Owner's Investment Start Date begins in a calendar year prior
to the calendar year of application, the annual report(s) for those prior
year(s) are due 30 days following the date the Department grants the exemption
certificate or April 30th of the year of
application, whichever is later.
| (i) |
Example:
If the Department grants an exemption certificate on January 1, 2021 to a Data
Center Owner with an investment start date of July 1, 2018, the annual reports
for years 2018 through 2020 are due on April 30, 2021. The annual report for
2021 is due May 2, 2022 (because April 30, 2022 is a Saturday). |
| (ii) |
Example: If the Department grants an
exemption certificate on April 15, 2021 to a Data Center Owner with an
investment start date of July 1, 2018, the annual reports for years 2018 to
2020 are due May 17, 2021 (because May 15, 2021 is a Saturday). The annual
report for 2021 is due May 2, 2022 (because April 30, 2022 is a
Saturday). |
|
| 3. |
The
Department may exercise its discretion to approve a Data Center Owner's request
for an extension beyond the applicable deadline. |
| 4. |
The annual reporting requirement does not
end at the expiration of the Investment Period. The annual report is required
for every year in which the Data Center Owner holds a valid exemption
certificate pursuant to this Rule. |
|
| (b) |
The annual report must include the
following:
| 1. |
The amount of tax exempted or
refunded under this exemption on purchases by the owner of the High-Technology
Data Center and its Related Members during the preceding calendar
year; |
| 2. |
A list of the Data Center
Owner's High-Technology Data Center Customers holding exemption certificates
under this Rule; |
| 3. |
The amount of
tax exempted or refunded under this exemption on purchases by each
High-Technology Data Center Customer during the preceding calendar
year; |
| 4. |
The number of New Quality
Jobs created or maintained in accordance with paragraph (4) on a monthly basis
during the preceding calendar year; |
| 5. |
A list of each New Quality Job created and
maintained in accordance with paragraph (4), including a description of each
position, each position's wage, each position's regular work hours, and the
location at which each position's job duties are performed; |
| 6. |
A methodology to verify that employees are
working at least 30 hours per week on matters directly related to the
High-Technology Data Center in the county where the High-Technology Data Center
is located; |
| 7. |
The total amount of
High-Technology Data Center's employee payroll during the preceding calendar
year; |
| 8. |
The total amount of
qualifying aggregate expenditures made since the Investment Start Date that the
Data Center Owner counts for purposes of satisfying the expenditure requirement
of its Minimum Investment Threshold. This amount does not need to be reported
after the Data Center Owner submits its investment report as described in
Paragraph (8) of this Rule at the conclusion of the Investment Period;
and |
| 9. |
A list of expenditures that
count toward the Data Center Owner's Minimum Investment Threshold, including
the dollar amount of each purchase, the name of the purchaser, the date of
purchase, the vendor, and description of the purchase. This list is not
required after the Data Center Owner submits its investment report as described
in paragraph (8) of this Rule at the conclusion of the Investment
Period. |
|
| (c) |
A Data Center
Owner's failure to submit a complete and accurate annual report is grounds for
the revocation of the Data Center Owner's certificate of
exemption. |
|
| (8) |
Investment Report.
| (a) |
Within 60
days after the end of the Investment Period, the Data Center Owner must file a
report electronically with the Department. |
| (b) |
The report must detail the following:
| 1. |
The expenditures incurred that count
toward its Minimum Investment Threshold, including the name of the purchaser,
the expenditure date, the vendor, the dollar amount, and a description of each
purchase; |
| 2. |
The average number of
New Quality Jobs created and maintained during the Investment Period, as
calculated in paragraph (4)(c); |
| 3. |
A description of each position and each position's wage and regular work hours;
and |
| 4. |
Any other information that
the Commissioner may reasonably require to determine whether the Data Center
Owner has met the Minimum Investment Threshold. |
|
| (c) |
If it is determined that a Data Center
Owner failed to meet its Minimum Investment Threshold, such owner of the
High-Technology Data Center and its Related Members must repay all taxes
exempted or refunded pursuant to the Data Center Owner's certificate of
exemption and all taxes exempted or refunded pursuant to the certificates of
exemption of the Data Center Owner's High-Technology Data Center Customers.
| 1. |
Interest will be due at the rate specified
in O.C.G.A. § 48-2-40 computed from the date
such taxes would have been due but for this exemption. |
| 2. |
Such repayment of taxes and interest must
be made within 90 days after notification of such failure. |
| 3. |
Such repayment will be calculated
notwithstanding otherwise applicable periods of limitation for
assessment. |
|
|
| (9) |
Impact on Certain Income Tax Credits.
| (a) |
During any tax year in which a Data
Center Owner holds a valid exemption certificate under this Rule with respect
to a High-Technology Data Center, the owner of such High-Technology Data Center
is not entitled to claim any credit authorized under O.C.G.A. §§ 48-7-40 through
48-7-40.33 or O.C.G.A. § 36-62-5.1 for jobs, investments,
or any business activity created by, arising from, related to, or connected in
any way with such High-Technology Data Center. |
| (b) |
A Related Member is not entitled to claim
any credit authorized under O.C.G.A. §§ 48-7-40 through
48-7-40.33 or O.C.G.A. § 36-62-5.1 in any tax year for
jobs, investments, or any business activity created by, arising from, related
to, or connected in any way with a High-Technology Data Center, if, during that
tax year such Related Member or the associated owner of such High-Technology
Data Center holds a valid exemption certificate and the Related Member takes
any of the following actions:
| 1. |
Makes
expenditures for such High-Technology Data Center that count toward the Minimum
Investment Threshold; |
| 2. |
Makes
exempt purchases of High-Technology Data Center Equipment that is used or
deployed in such High-Technology Data Center; |
| 3. |
Employs persons to fill New Quality Jobs
at such High-Technology Data Center; or |
| 4. |
Contracts with High-Technology Data Center
Customers for data center services at such High-Technology Data
Center. |
|
| (c) |
If a
determination is made by the Department that the Data Center Owner must repay
all taxes exempted or refunded pursuant this exemption, the owner of the
High-Technology Data Center and its Related Members may, notwithstanding
otherwise applicable periods of limitation, file amended income tax returns
claiming any credit to which they would have been entitled under O.C.G.A.
§§ 48-7-40 through
48-7-40.33 or O.C.G.A. § 36-62-5.1 but for having claimed
the exemption set forth in this Rule. |
|
| (1) |
Purpose. This Rule sets
forth the application of Georgia sales and use tax concerning the sale or use
of Specified Digital Products, Other Digital Goods, and Digital Codes, as well
as Internet Access Service. |
| (2) |
Definitions. For purposes of this Rule,
| (a) |
"Digital Audio-Visual Works" means any
series of related images, together with accompanying sounds, if any and which,
when shown in succession, impart an impression of motion. |
| (b) |
"Digital Audio Works" means digitized
works that result from the fixation of a series of musical, spoken, or other
sounds. Such term includes digitized sound files that are downloaded onto a
device and that may be used to alert an End User with respect to a
communication. |
| (c) |
"Digital Book"
means works that are generally recognized in the ordinary and usual sense as
"books." |
| (d) |
"Digital Code" means a
key, activation, or enabling code that conveys a right to obtain one or more
Specified Digital Products or Other Digital Goods. Such term does not include a
code that represents a stored monetary value that is deducted from a total as
it is used by the purchaser or a redeemable card, gift card, or gift
certificate that entitles the holder to select Specified Digital Products or
Other Digital Goods of an indicated cash value. |
| (e) |
"End User" means any person other than a
person that receives by contract a product Transferred Electronically for
further commercial broadcast, rebroadcast, transmission, retransmission,
licensing, relicensing, distribution, redistribution, or exhibition of the
product, in whole or in part, to another person or persons. |
| (g) |
"Other Digital Goods" means the following
items Transferred Electronically to an End User:
| (6) |
Video or audio greeting cards;
or |
| (7) |
Video games or electronic
entertainment. |
|
| (h) |
"Prewritten Computer Software" means computer software, including prewritten
upgrades, which is not designed and developed by the author or other creator to
the specifications of a specific purchaser. The combining of two or more
Prewritten Computer Software programs or prewritten portions thereof does not
cause the combination to be other than Prewritten Computer Software. Prewritten
Computer Software includes software designed and developed by the author or
other creator to the specifications of a specific purchaser when it is sold to
a person other than the specific purchaser. Where a person modifies or enhances
computer software of which the person is not the author or creator, the
Department regards the person to be the author or creator only of such person's
modifications or enhancements. Prewritten Computer Software or a prewritten
portion thereof that is modified or enhanced to any degree, where such
modification or enhancement is designed and developed to the specifications of
a specific purchaser, remains Prewritten Computer Software; provided, however,
that where there is a reasonable, separately stated charge or an invoice or
other statement of the price given to the purchaser for such modification or
enhancement, such modification or enhancement does not constitute Prewritten
Computer Software. |
| (i) |
"Software as
a Service" means a method of software delivery and licensing in which software
is accessed online via a Subscription, rather than bought and installed on
individual computers. |
| (j) |
"Specified Digital Products" means the following items Transferred
Electronically to an End User:
| (1) |
Digital
Audio-Visual Works; |
| (2) |
Digital
Audio Works; or |
|
| (k) |
"Subscription"
means an agreement with a seller that grants a consumer the right to obtain
products Transferred Electronically from within one or more product categories
having the same tax treatment, in a fixed quantity or for a fixed period of
time, or both. |
| (l) |
"Transferred
Electronically" means obtained, accessed, or available to be accessed by means
other than tangible storage media. |
|
| (3) |
Imposition.
| (a) |
Beginning January 1, 2024, a tax is
imposed pursuant to O.C.G.A. § 48-8-30 on the retail purchase or
retail sale of Specified Digital Products, Other Digital Goods, or Digital
Codes sold to an End User in this state, provided that such End User receives
or will receive the right of permanent use of such products, goods, or codes
and the transaction is not conditioned upon continued payment by the End User.
| 1. |
If the seller allows the End User to
download and retain the product, then the purchase has conferred the right of
permanent use to the End User. This applies even if the End User's right of
permanent use is contingent upon continued payment by the End User. Example:
The purchase of a digital newspaper Subscription permits an End User to both
permanently download the newspaper and also access the newspaper online, the
charge for the subscription is taxable. |
| 2. |
If a transaction contains both
non-fungible tokens (NFT's) and taxable Specified Digital Products, Other
Digital Goods, or Digital Codes the entire transaction is taxable. Example: An
End User purchases digital graphic art that is minted with an NFT. The entire
sales price of the digital graphic art and the NFT is taxable. |
|
| (b) |
The tax levied under this
paragraph shall apply regardless of whether possession of the Specified Digital
Products, Other Digital Goods, or Digital Codes is maintained by the seller or
a third party. Example: A taxpayer purchases a Digital Book. The taxpayer can
only access the book via a seller's app or website or a third-party's app or
website. The Digital Book is taxable. |
| (c) |
Except as provided otherwise in Article 1
of Chapter 8 in Title 48 of the Official Code of Georgia, the tax imposed on
Specified Digital Products, Other Digital Goods, and Digital Codes is levied,
collected, remitted, and administered in the same manner and at the same rate
as is provided in said Article for the retail purchase, retail sale, rental,
storage, use, or consumption of tangible personal property. |
|
| (4) |
Sourcing.
Purchases of Specified Digital Products, Other Digital Goods, and Digital Codes
are sourced in accordance with O.C.G.A. § 48-8-77. |
| (5) |
Exemptions and exclusions.
Sales and use tax does not apply to:
| (a) |
Internet Access Service; or |
| (b) |
The
sale of Prewritten Computer Software Transferred Electronically to the
purchaser or delivered to the purchaser by means of load and leave; provided,
however, that the exemption granted by this paragraph does not include sales of
Specified Digital Products, Other Digital Goods, or Digital Codes; |
| (c) |
Software as a Service (SaaS); |
| (d) |
Subscriptions for which the End User does
not receive the right of permanent use of the Specified Digital Products, Other
Digital Goods, or Digital Codes or the End User's right of use of the Specified
Digital Products, Other Digital Goods, or Digital Codes is conditioned upon
continued payment by the End User. Example: An End User subscribes to a digital
service that provides access to Digital Books. The Subscription provides no
option to download the books, and access to the books ends when the
Subscription ends. The charge for the Subscription is not taxable. |
|
| (6) |
Sales for resale.
A sale of any Specified Digital Product, Other Digital Good, or Digital Code is
a sale for resale if the Specified Digital Product, Other Digital Good, or
Digital Code is subsequently sold, licensed, leased, broadcast, transmitted, or
distributed, in whole or in part, as an integral, inseparable component part of
a service or another such product, good, or code by the purchaser of the
Specified Digital Product, Other Digital Good, or Digital Code to an ultimate
consumer. The purchaser of the Specified Digital Product, Other Digital Good,
or Digital Code for resale must maintain records that substantiate such resale
in a manner consistent with this subsection, as determined by the
commissioner. |
| (7) |
Withdrawals
from inventory. A dealer who purchases Specified Digital Products, Other
Digital Goods, or Digital Codes under terms of resale without payment of sales
and use tax is liable for use tax on the cost price of such property if it is
withdrawn from inventory and used for a taxable purpose. |
