Georgia State and Local Tax Alerts – December 2019

• In a letter ruling, the Georgia Dept. of Revenue said that ticket sales to fine arts performances and exhibitions are exempt from sales and use tax because the taxpayer is a tax-exempt organization whose primary mission is to “advance the arts in Georgia,” and which “provides programming that enriches the state’s residents.” Moreover, musical theater and scripted radio performances qualify as “fine arts” under Georgia code, while narrative performances, stand-up comedy, popular performance art and film showings do not. Download the letter ruling here: https://bit.ly/37IDX9d
• The Georgia Dept. of Revenue has announced the average retail sales prices that are used to calculate the prepaid local tax on motor fuel sales. The following average retail sales prices will be in effect Jan. 1, 2020, through June 30, 2020: gasoline, $2.153 per gallon; diesel, $2.554 per gallon; and aviation gasoline, $3 per gallon. The prepaid local tax average retail sales prices must be remitted by licensed Georgia distributors on all sales of motor fuel for highway use sold to any purchaser not licensed as a Georgia distributor.
• The Georgia Dept. of Revenue has made amendments to the Georgia Higher Education Savings Plan. The amendments go into effect Dec. 11, 2019. The regulations specify the amount that may be subtracted from federal adjusted gross income for taxable years beginning on or after Jan. 1, 2020. If a contributor files a separate return or single return, the sum of contributions constituting deductions on the contributor’s return can’t exceed $4,000 per beneficiary. Contributions or payments for any taxable year may be made during or after the taxable year, but before the deadline for making contributions to an IRA under federal law for a taxable year.
• The local sales and use tax rates for energy sold to Georgia manufacturers have been published. The Georgia Dept. of Revenue has issued a table showing the local sales and use tax rates for energy sold to manufacturers for the first quarter beginning Jan. 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. To download the January 2020 table: https://bit.ly/2LxcCgF
• Georgia amends regulations on electronic tax return filing. The Georgia Dept. of Revenue has amended regulations that now state that taxpayers who file Form 1099-K with the IRS must electronically file a copy of Form 1099-K with the tax commissioner through the Georgia Tax Center. The e-filing must be completed on or before the time (including extensions) that’s required for filing Form 1099-K with the IRS. The taxpayer must include a duplicate copy of all Forms 1099-K filed with the IRS.
• A manufacturer’s purchase of portable metal racks used in the packaging and delivery process isn’t subject to state sales and use tax. The Georgia Dept. of Revenue has ruled that the racks qualify as tax-exempt packaging supplies. The metal racks are used for a short time in the finished goods warehouse to store rolls of metalized manufacturing product prior to shipping. These metal racks also double as a packaging component for these rolls because they are used in the same manner as pallets that are expressly exempt as qualifying “packaging supplies” under Georgia state law.
• Georgia has amended its Qualified Education Expense Credit regulations. As amended, the regulations provide that when a taxpayer is a pass-through entity that has no income tax liability of its own, the tax credit will be considered earned by its members, shareholders or partners based on their profit/loss percentage at the end of the year. The expenditure is made by the pass-through entity, but all credit forms (preapproval, claiming and reporting) will be filed in the name of its members, shareholders or partners. The amended regulations are applicable to years beginning on or after Jan. 1, 2019.
• Georgia’s November 2019 net tax revenues decrease 1.2%. November’s net tax collections totaled nearly $1.81 billion, a decrease of $22.4 million (or 1.2%), compared to fiscal year 2019. Year-to-date, net tax revenue collections totaled $9.62 billion, for a decrease of roughly $33.6 million, or 0.3% percent, compared to fiscal year 2019. For additional November 2019 tax collection numbers, visit: https://bit.ly/2M3HRA4

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