Georgia State and Local Tax Updates September 2020

Georgia DoR issues sales tax ruling

The Georgia Dept. of Revenue has issued a ruling on the sales tax application relating to a taxpayer’s business of providing document storage, data protection, digital/electronic document management, certified destruction and the sale of information management solutions. The sales of information delivered electronically or accessed online and the sales of non-enumerated services weren’t subject to sales and use tax. However, the charges for boxes, cases, packaging materials and the release of information services by physical delivery were sales of tangible personal property that were subject to sales and use tax. (Georgia Letter Ruling No. LR SUT-2019-09)

Georgia DoR updates its guidance on Georgia’s conformity to the CARES Act

The Georgia Dept. of Revenue has updated its guidance on Georgia’s conformity to the CARES Act. The law included a technical correction for qualified improvement property by changing the depreciable life of qualified improvement property (QIP) from 39 years to 15 years. With the change, under federal law, QIP is now also eligible for 100% bonus depreciation. For taxable years beginning on or after Jan. 1, 2019, Georgia has adopted this correction as it relates to the 15-year life of property. The state hasn’t, however, adopted the bonus depreciation provision.

Georgia DoR publishes local sales and use tax rates for manufacturing energy

The Georgia Dept. of Revenue has published a table showing the local sales and use tax rates for energy sold to manufacturers for the fourth quarter, beginning Oct. 1, 2020. The tax rates are imposed for energy sold to manufacturers as levied by counties within the 159 special districts and the city of Atlanta. The tax is levied initially by ordinance following the phased-in schedule rates.

Georgia DoR issues ruling on sales tax application of taxpayer’s car wash business

The Georgia Dept. of Revenue issued a ruling on the sales tax application relating to a taxpayer’s car wash business. In this case, the transactions used only small amounts of tangible personal property, such as wax, coatings and water. Thus, only a small amount of tangible personal property might be transferred to customers. The department ruled that the taxpayer’s washing and waxing services were nontaxable personal services but would be liable for sales and use tax on any purchases of tangible personal property that it uses in rendering such services. (Georgia Letter Ruling No. LR SUT-2019-11)

The rule on remote administrative hearings has been made permanent

The Georgia Dept. of Revenue has adopted as permanent regulations that provide that administrative hearings at the Alcohol and Tobacco Division may be conducted by alternate means if all parties have consented and that the procedure will not jeopardize the rights of any party to the hearing. Alternate means include remote communication methods, such as two-way videoconferencing applications.

Georgia DoR rules on sales tax applicability on resale of hotel room accommodations

The Georgia Dept. of Revenue has issued a ruling on the sales tax application on a taxpayer who’s engaged in the sale of hotel room accommodations. The taxpayer’s purchases of hotel rooms from hotel operators aren’t subject to sales tax as they’re purchases made for resale. The taxpayer may purchase the hotel rooms for resale tax-free by providing the hotel operator a properly executed resale certificate. As the ultimate seller of the hotel rooms to end users, however, the taxpayer must remit tax on the sale price charged by the taxpayer to the end users, unless an exemption applies. (Georgia Letter Ruling No. LR SUT-2020-01)

 

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