Ever since the South Dakota vs. Wayfair decision, state governments are debating and legislating about how to comply with the ruling. While some states have solidified their positions on the issue, other state governing bodies, such as Georgia’s, have a taxation plan in place but hint that changes could be on the way in 2019.
A Question Of Nexus
When thinking about tax compliance in Georgia, what is at issue is whether or not you have nexus in the state. The definition of nexus is a connection to the state that tax law defines as significant. If you have:
- Stored Inventory
- An office or employee
- An affiliate location
- A temporary location
Then you have nexus in the state of Georgia and must pay tax on sales.
Nexus Requirements
If you discover that you do have Nexus in the state of Georgia, financially or otherwise, here are steps you must take to remain compliant with tax laws. You need to register for a state tax permit, charge the sales tax, and remit it to the Georgia Department of Revenue.
Economic Nexus
Even if your business is not in Georgia, you may have to pay state tax on items that you sold to residents of the state if you have economic nexus. According to H.B. 61, after your business completes over 200 sales transactions to Georgia residents or total monetary value of over $250,000 in a year, you have economic nexus in the state and you must either:
• Collect the sales tax and remit to the state of Georgia, or optionally:
• Submit a sales report to the Georgia Department of Revenue, and
• Send notifications to customers informing them of their tax obligation
If you need assistance in making sure you are compliant with changing tax laws, an experienced tax attorney familiar with both state and federal tax regulations will be an excellent resource for your business.