Sales Tax in Georgia: How It Works and What Sellers Need to Know
If you sell products or certain services in Georgia, you’ve got to get sales tax right. That means charging customers the correct amount, collecting it at checkout, and sending it to the state on time. This guide breaks down the basics—how rates work, when you need to collect, what’s taxable, and what steps you need to take to stay on track and out of trouble.
How Sales Tax Rates Work in Georgia
Georgia has a statewide sales tax, but that’s just the beginning. Each county and city can add their own tax on top. So, the final rate depends on where your buyer is. For most sales, you figure out the total by combining the state and local rates at the spot where the customer receives the goods—whether that’s your store, their shipping address, or somewhere else.
To get the right rate, you’ve got to know where the sale “happens.” In-person? Use your store’s location. Shipping out? Go by the delivery address. Selling digital or drop-shipped stuff? Sometimes there are special rules. Either way, keep a record of how you figured out the tax rate for every sale.
When Do You Have to Collect? Understanding Nexus
You only have to collect Georgia sales tax if you have nexus in the state. Nexus just means a real connection—like if you’ve got a store, warehouse, or employees in Georgia. Even if you aren’t physically there, high enough sales into Georgia can trigger what’s called “economic nexus.” If you hit that threshold, you must register and start collecting tax.
Check your Georgia sales regularly. Remote sellers need to track how much they’re selling into the state and know when they cross the economic threshold. Keep monthly sales records by state so you don’t miss when you need to start collecting.
What’s Taxable—and What Isn’t
Not everything you sell gets taxed. Most physical goods do, and many services, too. But some things are exempt—like certain professional services, some medical supplies, and specific goods sold to buyers who qualify for exemptions (think government agencies or nonprofits with the right paperwork). If a customer claims an exemption, get the right certificate and keep it on file.
Exemptions and Special Cases
Exemptions aren’t all the same. Sometimes buyers need to show you a certificate—like for resale, manufacturing, agriculture, or charity purchases. Some items, like certain groceries or prescriptions, have their own special rules or tax rates. When you’re not sure, always collect the exemption certificate and make a note of why the sale was tax-free.
How to Register and Collect Sales Tax
Here’s what you need to do:
1. Figure out if you have nexus—physical presence or enough sales in Georgia.
2. Register as a sales tax vendor with the Georgia Department of Revenue before you start selling taxable stuff.
3. Charge customers the right combined state and local tax at checkout.
4. Give receipts and keep copies of all your sales, including exemption certificates and shipping paperwork.
Filing and Paying Sales Tax
After you register, Georgia will tell you how often to file—monthly, quarterly, or yearly—based on your sales volume. Always file on time and pay what you owe to dodge penalties and interest. Even if you made no taxable sales, you might still need to file a “zero return.”
Keep Good Records—It Matters
Solid records save you headaches. Hang on to all sales invoices, exemption certificates, shipping confirmations, and tax returns as long as the law says. Match up your point-of-sale reports with your tax filings so you can spot mistakes early. If you ever get audited, you’ll need to show clear, organized records to back up your transactions and exemptions.
Remote and Marketplace Sellers: Don’t Miss This
If you sell online or through marketplaces, pay attention. You might have to collect Georgia sales tax on deliveries into the state—or the marketplace might handle it for you. Double-check who’s responsible, so you don’t end up missing a filing or paying twice.
Smart Habits for Georgia Sellers
- Use software to automatically figure out sales tax rates, and double-check them from time to time—especially if you sell in lots of places.
- Make sure your team knows how to handle exemption certificates and special cases so you don’t lose money or refund tax by mistake.
- Reconcile your POS reports with your tax filings every month. That way, you’ll catch errors before they turn into bigger problems.
Watch Out for These Common Mistakes
- Not registering once you have nexus.
- Using the wrong rates because you guessed on sourcing.
- Accepting half-completed exemption certificates or forgetting to keep the paperwork.
- Missing deadlines or not reporting all your taxable sales.
When You Need an Expert
If your business is complicated, you sell in several states, or you deal with a big volume, it’s smart to talk to a tax pro. Questions about manufacturing exemptions, tricky sourcing rules, or whether certain services are taxable? Don’t guess—get help. You’ll cut down your risk of audits and penalties.
Final Thoughts
Sales tax compliance in Georgia takes some effort. You need to keep track of nexus, rates, sourcing, and exemptions. Make a checklist for yourself: confirm nexus, register as soon as you need to, use the right rate at checkout, keep your exemption records, reconcile your sales, and file on time. If you keep your records organized and your process clear, you can handle Georgia sales tax without losing sleep or money.