Georgia State and Local Tax (SALT) Alerts
State and Local Tax Insights
Georgia State and Local Tax Alerts – October 2020
- The Georgia Dept. of Revenue has issued a letter ruling on the sales tax application on certain franchisor charges made by a taxpayer. The charges to franchisees for truck outfitting and business outfitting constitute taxable retail sales because they’re specific charges solely for tangible personal property. The charges for direct mail marketing and operations outfitting are for nontaxable services, and the taxpayer owes applicable sales and use tax on its purchases of tangible personal property. When the taxpayer makes sales of tangible personal property, it’s making a retail sale, which is subject to sales and use tax. (Georgia Letter Ruling No. LR SUT-2020-02)
- The Georgia Dept. of Revenue has announced the average retail sales prices used to calculate the prepaid local tax on motor fuel sales. The average retail sales prices are typically published semi-annually and effective for a six-month period beginning January 1 and July 1 of each year. However, the average retail sales price for fuel has changed more than 25% since July 1, 2020, requiring a revision of the average retail price of fuel effective Nov. 1, 2020. The following average retail sales prices will be in effect Nov. 1, 2020, through Dec. 31, 2020: gasoline, $1.410 per gallon and diesel, $2.044 per gallon.
- A Georgia court has ruled that a 50-year lease agreement between the Savannah Airport Commission and a private company to construct and operate a hotel didn’t create an “estate for years,” that could be subjected to ad valorem taxes. Rather, only a usufruct was created because there were restrictions imposed on the private company’s use of the premises which were inconsistent with the concept of an estate for all years. The agreement referred to the company as a lessee having only the right of possession, with the Commission retaining significant dominion and control over the property. (Dkt. No. A20A0867)
- Georgia state law now imposes a $0.50 excise tax on any for-hire ground transport trips and a $0.25 excise tax on any shared for-hire ground transport trips. The excise tax will be collected and remitted by the for-hire ground transport service provider and not the vehicle driver. Quarterly reports must be made on the number of for-hire ground transport trips provided by county of origin and destination to the department. A penalty of $10,000 will be imposed for violations. All transportation subject to the excise tax will be exempt from the sales tax.
- Georgia’s entertainment industry tax credits have been amended. Effective Jan. 1, 2021, Georgia state law amends the Georgia Entertainment Industry Investment Act. The law requires an audit of every production that receives the film tax credit and allows the Dept. of Revenue to certify CPAs meeting specified conditions to perform the required audits. In addition, the law amends provisions on the additional 10% credit for the inclusion of a qualifying Georgia promotion for specified productions and holds the issuance of such a credit until the project is commercially distributed.
- Hurricane Michael payments are exempted from income tax. Georgia state law now provides that for taxable years beginning on or after Jan. 1, 2019, and ending on or before Dec. 31, 2023, income received as payments from a disaster relief or assistance program administered by the U.S. Dept. of Agriculture in connection with Hurricane Michael will be exempt from income tax to the extent that such income is included in federal adjusted gross income or federal taxable income.
- Governor Brian Kemp has announced that the state’s September net tax collections totaled roughly $2.16 billion, for a decrease of $81.3 million, or 3.6%, compared to September 2019, when net tax collections approached $2.25 billion for the month. Year-to-date, net tax revenue collections totaled nearly $6.2 billion during the first quarter, for an increase of $365 million, or 6.3%, compared to the same period last year. For additional data: https://bit.ly/3mt9LFJ
- The Georgia Dept. of Revenue has implemented a state-wide, online alcoholic beverage license application process to handle a centralized application process. The process is for both initial applications and renewals for retailers’ licenses and permits and for the remittance and reporting of application fees.