Georgia State and Local Tax Updates October 2020

Hurricane Michael payments are exempted from income tax

Georgia state law now provides that for taxable years beginning on or after Jan. 1, 2019, and ending on or before Dec. 31, 2023, income received as payments from a disaster relief or assistance program administered by the U.S. Dept. of Agriculture in connection with Hurricane Michael will be exempt from income tax to the extent that such income is included in federal adjusted gross income or federal taxable income.

Georgia’s entertainment industry tax credits have been amended

Effective Jan. 1, 2021, Georgia state law amends the Georgia Entertainment Industry Investment Act. The law requires an audit of every production that receives the film tax credit and allows the Dept. of Revenue to certify CPAs meeting specified conditions to perform the required audits. In addition, the law amends provisions on the additional 10% credit for the inclusion of a qualifying Georgia promotion for specified productions and holds the issuance of such a credit until the project is commercially distributed.

Georgia DoR announces prepaid tax calculation on motor fuel sales

The Georgia Dept. of Revenue has announced the average retail sales prices used to calculate the prepaid local tax on motor fuel sales. The average retail sales prices are typically published semi-annually and effective for a six-month period beginning January 1 and July 1 of each year. However, the average retail sales price for fuel has changed more than 25% since July 1, 2020, requiring a revision of the average retail price of fuel effective Nov. 1, 2020. The following average retail sales prices will be in effect Nov. 1, 2020, through Dec. 31, 2020: gasoline, $1.410 per gallon and diesel, $2.044 per gallon.

Georgia issues ruling on sales tax application relating to franchisor charges

The Georgia Dept. of Revenue has issued a letter ruling on the sales tax application on certain franchisor charges made by a taxpayer. The charges to franchisees for truck outfitting and business outfitting constitute taxable retail sales because they’re specific charges solely for tangible personal property. The charges for direct mail marketing and operations outfitting are for nontaxable services, and the taxpayer owes applicable sales and use tax on its purchases of tangible personal property. When the taxpayer makes sales of tangible personal property, it’s making a retail sale, which is subject to sales and use tax. (Georgia Letter Ruling No. LR SUT-2020-02)

 

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