SALT Report 2238 – The Georgia State Legislature passed a Bill to enact Streamlined Sales and Use Tax Agreement conformity and to amend the exemptions for agricultural producers and manufacturers. The provisions in House Bill 266 are effective March 5, 2013.
Streamlined Sales and Use Tax Conformity
The legislation modifies the good faith language regarding a retailer’s acceptance of an exemption or resale certificate. Specifically, the language now states that the burden of proving that a sale of tangible personal property is not a retail sale is on the person making the sale, unless that person accepts, in good faith, a certificate stating that the property is being purchased for resale or is otherwise exempt from tax from the purchaser.
A certificate is now considered accepted in good faith when the certificate is fully completed; is in a form appropriate for the exemption; claims an exemption that is statutorily available on the transaction date where the transaction is sourced; claims an exemption appropriate to the item purchased; and claims an exemption that is appropriate to the purchaser’s business.
Additionally, the good faith component now requires that the seller accept a certificate from a purchaser who is engaged in the business of selling tangible personal property, who has a valid sales tax registration number at the time of purchase, and who lists its registration number on the certificate. Finally, the good faith component now requires the seller not to have reason to believe at the time of sale that the purchaser does not intend to resell the item in the regular course of business.
Lastly, the bill removes the 90/120-day rule for exemption certificates. Specifically, removed is the language stating that the Georgia Department of Revenue will relieve a seller of tax due if the seller obtains a fully completed exemption certificate or if the seller either:
- Captures the relevant data required by the SST Agreement within 90 days after the sale; or
- Obtains a fully completed exemption certificate from the purchaser taken in good faith within 120 days following the Department’s request for substantiation, or obtains other information within that 120 days establishing that the transaction was not subject to sales tax.
Agricultural and Manufacturing Exemptions
Modifications are made to the sales and use tax exemption for sales to, or uses by, a qualified agriculture producer of energy used in agriculture. Specifically, the definition of “energy used in agriculture” has been amended and now excludes fuels subject to the prepaid state tax.
However, a dealer that performs both manufacturing and agricultural operations at a single business location can use the exemption provided in O.C.G.A. Sec. 48-8-3.2 for manufacturer’s purchases of machinery or equipment, packaging supplies, industrial materials, and energy. Or, O.C.G.A. Sec. 48-8-3.3 for qualified agriculture producers on their purchases of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment.
The exemptions cannot be used simultaneously in a single place of business in a calendar year, instead the dealer must choose one or the other.
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