Georgia residents who make out-of-state purchases may be subject to use tax. Use tax is a tax on tangible personal property that is purchased for use within a given state, but not from within that state. In simpler terms, it is a tax on items purchased out of state and brought into Georgia for use.
What is Georgia use tax?
The Georgia use tax is a tax on tangible personal property purchased for use within the state, when the property was not subjected to sales tax at the time of sale.
FAQs about Georgia use tax:
1. Do I have to pay use tax on all out-of-state purchases?
Not necessarily. Use tax is typically only applied to taxable items that were purchased from out-of-state and brought into Georgia for use. Items such as groceries or prescription medication are usually exempt from use tax.
2. How is Georgia use tax different from sales tax?
Sales tax is applied at the time of purchase within the state, while use tax is applied when tangible personal property is brought into the state for use without paying sales tax at the time of purchase.
3. How do I pay Georgia use tax?
Georgia residents can pay use tax by reporting their out-of-state purchases on their state income tax return and paying the appropriate amount.
4. What if I don’t pay Georgia use tax?
Failure to pay use tax on taxable items could result in penalties and interest being assessed by the Georgia Department of Revenue.
5. Are there any exemptions to Georgia use tax?
Yes, there are certain exemptions to use tax in Georgia, such as purchases for resale, purchases of raw materials for manufacturing, and purchases made by non-profit organizations.
6. Can I claim a credit for sales tax paid in another state?
Georgia allows residents to claim a credit for sales tax paid in another state if the tax rate is equal to or greater than the Georgia state sales tax rate.
7. Do I have to keep records of my out-of-state purchases?
It is recommended to keep records of out-of-state purchases, such as receipts or invoices, in case the Georgia Department of Revenue requests documentation.
8. How can the Georgia Department of Revenue enforce use tax compliance?
The Georgia Department of Revenue can enforce use tax compliance through audits, data matching programs, and information sharing agreements with other states.
9. Can I be audited for not paying Georgia use tax?
Yes, if the Georgia Department of Revenue suspects that a taxpayer has not paid the appropriate use tax on out-of-state purchases, they may conduct an audit to verify compliance.
10. Are there any states that do not have a use tax?
Currently, all states either have a use tax or a similar tax on out-of-state purchases to ensure that residents are paying their fair share of taxes.
11. What if I purchase items online from a retailer that does not collect sales tax?
If a retailer does not collect sales tax on online purchases, it is the responsibility of the consumer to report and pay the appropriate use tax on those items.
12. Can I set up a payment plan for Georgia use tax owed?
The Georgia Department of Revenue may work with taxpayers to set up payment plans for outstanding use tax liabilities, depending on the individual circumstances.