Sales Tax Updates in Georgia

Tax Professionals' Resource
January 14, 2013 — 1,069 views  
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Georgia is changing some of its sales tax laws starting in 2013. These changes will take effect on Jan. 1 and will impact people who shop for goods online, as well as the sales tax rate on everything it covers going up to 8 percent and the fact that the sales tax on energy will stay in place to help fund road work in the state.

Sales Tax Rate to Increase

The T-SPLOST tax that would have given a penny more per dollar to fund transportation projects failed, so now the state is raising the state sales tax to 8 percent as of Jan. 1. State officials have said that this new increase in revenues is expected to help raise at least $1.8 billion during the next decade.

Georgia to Collect Sales Tax on All Online Purchases

Lots of people shop online because in some cases they could find a website store that allows them to not pay sales tax in the state where they are shipping the items. However, that loophole will be shut down as of Jan. 1 in Georgia, when Internet shoppers will have to pay the normal 8 percent sales tax no matter if they buy something online or offline at a brick and mortar store.

This was done because the state, according to officials, was losing out on more than $455 million in taxes it couldn’t previously get from online purchases in 2012. It has also seen as a way of leveling the sales playing field between online marketing and local businesses. This way everyone has to pay the same sales tax, so it may not be as much of an advantage to shoppers to shop online instead of buying something locally.

Prior to this, an online store had to have an actual physical store in the state in order to collect sales taxes, but now if they have any sort of office or warehouse, or have an affiliate relationship with websites based in Georgia, they will have to charge sales taxes to their customers.

Sales Tax on Energy

Some Georgia areas will also maintain a sales tax on energy used in manufacturing. This four percent state tax on energy used by the manufacturers to make their products is slowly being phased out, but will remain in some areas. Some counties in the state are phasing it out in four years, while others are not.

Tax Professionals' Resource