This post deals specifically with e-commerce tax issues in the state of Georgia
Although web sales are generally thought to be non-taxable, if your client has a physical location they will have to pay sales tax for all of their in-state sales. Not only are there state taxes to process, there are additional county-based local taxes which have to be accounted for in your e-commerce solution. I know this sounds like a huge pain, and it somewhat is, but it is a necessary thing to consider in order to ensure that your client does not receive any unnecessary headaches while running their new e-commerce website.
There is however a kink to this process when considering online sales. Local taxes are county based. When was the last time you saw a “County” line on a checkout form? Since it is rather unconventional to include a “County” line on your checkout forms, these rates are typically calculated based on the zip codes provided when customers are purchasing items.
SPOILER ALERT! The remainder of this article deals specifically with Sales Tax issues for the state of Georgia
Georgia Tax Rates for Online Sales
In reviewing this situation for a current project we are working on for a company based in Georgia, we decided to add a 7% tax for all items purchased from within the state of Georgia (4% state tax + 3% Local Tax). Since there are only 9 counties with a lower local tax rate, we then determined (conservatively) the zip codes for all the counties that had a lower Local Tax rate (2% rather than the traditional 3%). We then created a negative tax rate criteria for all orders from these zip codes, so when someone made a purchase from a zip code that fell within the lower rate it would reduce the tax amount by 1% (2% in the case of Whitfield County since they only have a 1% local tax bringing the total tax rate to 5%). We’ve provided a breakdown below of all the Counties and associated zip codes with the lower rates.
Counties & Associated Zip Codes with 2% Tax Rate
Counties and Associated Zip Codes with 1% Tax Rate
We hope this helps you and maybe saves you a little time! If you happen to be looking into an e-commerce solution for your own company, we would love to talk with you! Contact us and we’ll be in touch with you shortly.