Georgia – Local Excise Tax for Manufacturers’ Energy Purchases Amended

SALT Report 2484 – Recently enacted legislation in Georgia amends the local excise tax that is imposed on sales to, and uses by, energy manufacturers. The local excise tax is being phased in over a four-year period that began on January 1, 2013. Alternatively, the 4% state sales and use tax and the 1% local sales and use tax imposed on the same transactions will be phased out over the same four year period.

Energy Used in Construction Projects

The local excise tax does not apply to sales or uses of energy used in the construction of a competitive project of regional significance. A “competitive project of regional significance” means the construction or expansion of a business enterprise in Georgia that the Commissioner of Economic Development determines will have a significant regional impact. This exemption applies to sales and uses of energy between January 1, 2012 and June 30, 2014.

Reporting and Payment of Tax

Generally, all dealers are required to file returns and remit any taxes due to the local governing authority that is imposing the tax by the 20th day of the month. If a dealer’s estimated tax liability for a taxable period is more than $2,500, and the dealer’s monthly payments exceeded $2,500 for at least three consecutive months during the previous fiscal year, the dealer will be required to file a return and remit at least 50% of their estimated tax liability by the 20th day of the taxable period.

Record-Keeping Requirements

Dealers who are required to collect and remit the local excise tax must maintain records to verify any taxable energy charges, the exemption certificates received by the dealer, and any other books necessary to determine the amount of tax due. These records must be available for examination by the local governing authority imposing the tax. Failure to keep adequate records may result in criminal penalties.

Vendor Compensation

A vendor discount is available for energy dealers as reimbursement for submitting, reporting, and paying the local excise tax due. The vendor discount is available as follows:

  • A 3% deduction of the amount due for the first $3,000 of excise tax due to each governmental authority imposing the tax, and
  • A 0.5% deduction of the amount due that exceeds $3,000

Penalties and Interest

If a dealer fails to file a return reporting the local excise tax, or fails to pay the full amount of the local excise tax due, a penalty of 5% or $5 (whichever is greater) will be added for each 30 days, or fraction of, that the failure to file or pay continues. A penalty of 50% of the local excise tax due will be assessed in the case of a false or fraudulent return, or if there is willful intent to defraud the governing authority.

The following offenses will be considered aggravated misdemeanors when committed the first time, and felonies when committed two or more times:

  • A dealer knowingly and willfully fails, neglects, or refuses to collect the local excise tax,
  • A dealer makes a false or fraudulent return with intent to evade the local excise tax,
  • A dealer knowingly and willfully fails or refuses to provide a required return, or fails or refuses to provide a supplemental return requested by the governing authority imposing the local excise tax, and
  • A dealer knowingly and willfully fails to keep records or fails to provide records for inspection as required by law

A first-time conviction of any of these offenses is punishable by a fine of up to $5,000, imprisonment for up to one year, or both. A second or subsequent conviction of these offenses is punishable by a fine of up to $10,000, imprisonment of up to five years, or both.

Assessments

If a dealer fails to file a return, fails to pay the tax, or files a grossly incorrect, false, or fraudulent return, the local governing authority imposing the tax will make an estimate for the taxable period of the dealer’s taxable charges. Based on this estimate, the governing authority will assess and collect the taxes, interest, and penalties. This assessment can be made at any time.

For Further Information

Georgia State Legislature – House Bill 250, Laws 2013