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Georgia's New Rule for Itemization of Sales and Use Tax

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A new rule adopted by the Georgia Department of Revenue (GA DOR) gives retailers two choices when adding sales and use tax to purchases in the state.

Option 1: Itemize the sales price and the tax
If a retailer chooses this option, then the receipt must clearly show the sales price and the applicable tax as separate line items.

The GA DOR provides the following example of how itemization of sales tax works:

  • 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.

Option 2: Include the tax in the total charge
If a retailer chooses to include the tax in the total charge and not itemize then the retailer must give written notification to the customer explaining that the total charge includes sales tax.

Using the same scenario as above, if the retailer provides written notification to the purchaser that the purchase includes tax, the retailer may charge of $214.00 and remit $14.00 of tax to the Department.

Tax Absorption Compliance
The only time that a retailer does not have to add applicable sales and use tax to the sales price is if the retailer is absorbing the tax. However, the GA DOR sets strict requirements for tax absorption under O.C.G.A. §48-8-36, including:

  1. If the retailer advertises that he/she is absorbing the tax, the advertisement must clearly explain that the retailer is remitting the tax to the state on behalf of the purchaser;
  2. The purchaser must be provided with written notification that the retailer will remit the tax to the state on the purchaser’s behalf and the retailer will be solely liable to the state for the tax payment.

For more information about the Georgia Department of Revenue’s adoption of this Itemization of Tax rule (Reg. §560-12-2-.21) visit the Georgia Tax Center.

About the Author: Lauren Stinson, CMI, is Owner and President of Windward Tax, a sales and use tax consulting firm. She has more than 20 years of experience working with manufacturers on sales and use tax issues. Lauren is pleased to share her expertise with SalesTaxSupport readers. She is the Manufacturing contributor for SalesTaxSupport’s Industry blog and she is the Georgia Sales Tax contributor for SalesTaxSupport’s State blog.

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Additional contact options (and Consultation Requests) are also available on Lauren's associated Firm Profile page.

Other recent “Georgia (GA)” posts by Lauren Stinson, CMI:

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