Georgia Requires Remote Sellers to Collect and Report Sales and Use Tax or Comply with Information Reporting Requirements

By Tim Clancy

Beginning on January 1, 2019, certain out-of-state remote sellers will be subject to a new “economic nexus” threshold on sales delivered into Georgia under HB 61, which was signed into law by Governor Nathan Deal on May 3, 2018.  Retailers making sales of tangible personal property outside of Georgia for delivery to purchasers in Georgia must comply with these new requirements if, in the previous or current calendar year, they made over $250,000 of gross revenue from these sales or conducted 200 or more separate retail sales of such property. 

Retailers meeting these thresholds must either collect sales and use tax or provide notice to purchasers immediately before the sale informing them that Georgia sales and use tax may be due and the filing of a sales and use tax return may be required.  By January 31 of each year, retailers not collecting tax must also send a sales and use tax statement to each purchaser who completed sales totaling $500 or more during the previous year and must report this information to the Department of Revenue.

Penalties Imposed for Failure to Comply
The state will impose various penalties on sellers who do not comply with the reporting requirements.  The penalties are as follows:

  • Sellers who fail to provide the required notice to purchasers immediately before the sale will be penalized $5 for each failure.
  • Failure to send year-end sales and use statements to purchasers will be subject to a $10 penalty for each failure.
  • Failure to file a copy of the year-end sale and use tax statement with the Department of Revenue carries a penalty of $10 for each failure.

Passage of HB 61 is a preemptive move by Georgia to collect sales and use taxes on significant online sales.  Compliance with HB 61 presents a burden particularly to smaller retailers who likely do not have systems in place to accumulate the necessary information.  Retail sellers, including online sellers, should act as soon as possible to ensure they are prepared to collect, remit, and report sales and use taxes as required under HB 61.

For additional information, please contact: 
Tim Clancy
State and Local Tax Practice Leader
Windham Brannon P.C.

Denise Mummert
Director, Tax
Windham Brannon P.C.