Leaving Alabama last week, I made a stop in seemingly no where Georgia, but it does happen to be one of the most unusual places of natural wonder within the state. I’m talking about the 1,000-acre Providence Canyon State Park in southwest Georgia.
This is some unusual geology for Georgia, in many places Providence Canyon looks like a miniature ‘Grand Canyon’, and almost all of this spectacular view was created by years of erosion resulting from poor agricultural practices. There is a $5.00 parking fee to get in to the park, but you won’t pay any Sales Tax here unless you partake of food or souvenirs.
But speaking of sales tax, big changes are underway with regard to Georgia Sales Tax. Beginning April 1, 2018 numerous local sales and use tax rate changes will take effect. For example, in Clarke, Colquitt, Decatur, Haralson, Putnam, Walker and Ware counties, the sales and use tax rate will increase from 7% to 8%. The rate in Fulton County, which includes sections of Atlanta, will also change. In the portion of Fulton County that’s inside Atlanta city limits, the combined rate will be 8.9% on April 1. In the portion of Fulton County outside Atlanta city limits, the rate will be 7.75%.
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It’s changes like these, and several others we will address later in this article, that make sales tax administration such a nightmare for small businesses. And that’s one reason small businesses need the help that Avalara can provide to keep them on track with sales tax demands.
Thanks to Avalara, Insightful Accountant is publishing Sales Tax Tuesday 2018. As we did back in 2015, we will be covering sales tax issues associated with each and every state tax jurisdiction in the United States as part of our new (2018) 50-part series. So, come take a ride with me in my big RV as we journey from state-to-state looking for what's great, and paying sales taxes all along the way.
If you haven’t guessed by now Georgia is our seventh state in this new series. Georgia is ranked 24th in terms of area within the United State at just over 59,400 square miles. It is ranked 10th in population with more than 10,315,000 residents. Georgia is ranked 14th for its economy among the states with a median household income of almost $51,000, and it’s ranked 15th for government efficiency. It is also highly ranked in terms of job growth, new business development and overall GDP growth.
Atlanta, is not only the largest city, and largest metropolitan area, but also the state’s capital.
It’s hard to look at this picture and imagine that everything you see is completely new, because was essentially not once but twice in 1864 during the Civil War. In September of that year Confederate forces retreated from Atlanta which was under siege by General William Sherman, they burned most of the public buildings on their way out of the city. Atlanta was then occupied by Union forces for a short time before being burned again as General Sherman marched his forces to the Atlantic.
The initial post-Civil War reconstruction of Atlanta took place between 1866 and 1871 and included the Georgia Railroad freight depot finished in 1869. Today that depot stands at the entrance of what is known as Underground Atlanta displaying many original storefronts from the post-war reconstruction era. For many years this area was home to numerous restaurants, bars, nightclubs and music venues many of which are named for Civil War era establishments and people (real and fictional). During 2017 Underground Atlanta was sold by the City of Atlanta to private developers, at present more than ½ of the underground is closed to the public. To me this was one of the most unique aspects of spending time in downtown Atlanta, a mixture of old and new, or ‘old South’ and ‘new South’, of peoples and their past.
But there is one place certain that I am going to visit when I am in downtown Atlanta, it’s the World of CocaCola at CocaCola Center, because Atlanta is the home of CocaCola. Here you can experience the real stories behind the world’s most famous soft drink. You can connect and interact as you step inside Coke history and experience the earliest of advertisements to the greatest advertising campaigns to impact the planet.
You will see vintage Coke fountain machines and bottle dispensers and experience the varieties of Coke offered over the product’s history. Then sip away, because the free beverage lounge affords you with a never-ending supply of ‘my’ favorite beverage of all time.
While the Coke maybe free, the admission isn’t, and then be ready to pay state and local sales tax on top of the base admittance charge. I can remember when I sold those small glass coke bottles out of the Coke machine at my dad’s shop for just 10-cents each and coke paid me 2-cents for each returned bottle.
Unfortunately, before we leave Atlanta I have some more Sales Tax ‘bad news’ to convey. Atlanta is located in DeKalb county, where voters decided to suspend the existing Homestead Option Sales Tax (HOST) as of April 1 and in its place levy an Equalized Homestead Option Sales Tax (EHOST) on a countywide basis, including in the City of Atlanta.
In addition, a new Special Purpose Local Option Sales Tax (SPLOST) will be levied in those parts of DeKalb County that are located outside of Atlanta.
Collectively what this means is that the sales tax rate in DeKalb County inside the City of Atlanta will be 8.9% as of April 1, and the rate in the rest of DeKalb County (outside of Atlanta) will be 8%.
To complicate matters even more, food and food ingredients which are exempt from state sales tax, but which have generally been taxable on a local basis will now be exempt from the new SPLOST tax that takes effect in DeKalb County outside the City of Atlanta.
I’m sure this all seems as clear as ‘Georgia mud’ which is the nickname for one of my favorite things to each there, ‘Georgia Mud Pie’. Sorry Mississippi, I think Georgia Mud Pie is better than Mississippi Mud Pie.
Depending on whether I’m eating my Mud Pie outside Atlanta in DeKalb County, or in Atlanta, will determine how much sales tax I pay for my Georgia mud. The same would be true for fried chicken which also abounds here, after all, Georgia is the unofficial Fried Chicken Capital of the World.
Leaving Atlanta, I’m heading to one of the most beautiful places on the planet. No, I wouldn’t say it is natural beauty although nature is in it’s bounty there, but it takes a good deal of grooming for this showplace. We are headed for Augusta, home of the Augusta National Golf Club and while it isn’t ‘Master Tournament’ time just yet, you can not say that this place is not already the home of ‘splendor in the grass.’
This is truly a place unto its own. We are not even going to estimate the immensity of the sales tax collected over the big tournament from the spectators buying souvenirs, soft drinks, and other libations.
Departing from Augusta, I turn south with hopes of finding evidence of the ‘old South’. You know, the south where before the Civil War plantation life grew among the white elite of Georgia, and where Southern aristocrats resisted every attempt to change their way of life, a way best described in 1936 by Margaret Mitchell as, "There was a land of Cavaliers and Cotton Fields called the Old South...Here in the pretty world Gallantry took its last bow. Here was the last ever to be seen of Knights and their Ladies Fair, of master and of Slave. Look for it only in books, for it is no more than a dream remembered. A Civilization 'gone with the wind'...".1
Finally, I reach one of the Sebastian’s of southern life, Savannah, which is undoubtedly one of the most beautiful cities in the South. There is a certain majesty here among the Spanish moss and porched houses many of which date back before the Civil War and are today restored to their splendor of old.
Yet despite the beauty and ‘old South’ charm there is a definite eeriness to this place, and Savannah not only knows it, but they exploit it. Daytime and night, you can take a tour that highlights the deaths that allegedly occurred at mansions as you pass by, like the Mercer Williams house Shown on the left below.
The Ghost tours at night will show you some of even the creepier spots, like Bonaventure Cemetery (a setting for the book and film Midnight in the Garden of Good and Evil shown in the picture on the right above), and Colonial Park Cemetery.
If you are fortunate enough to be in Savannah in September, you are likely to experience some of the best Jazz and Blues music around during their multi-week festival. Of course there are plenty of places to enjoy the musical talents of the city all year long.
But no matter what time of the year you are in Savannah the seafood, which goes so well with the Jazz and Blues, abounds. One of the best places is River House Seafood on historic River Street. Of course, you won’t get out of there without paying sales tax.
I’m certain, with all the emphasis I have placed on the increases in Sales Tax that Georgia is about to experience next month, that you recognize what critical revenue source it is for states, like Georgia. That means, from the perspective of the Georgia Department of Revenue making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is essential government policy.
This series is intended to help insure you are aware of the key sales tax facts for YOUR state, so let’s take this opportunity to lake at some other Georgia Sales Tax Facts.
Sales Tax Facts:
- Georgia’s state sales tax rate is 4% but can be as high as 8.9% depending on local municipality rates.
- Numerous tax rate changes are effective April 1, 2018, for more information see the Georgia Department of Revenue 2018 ST-3 Sales and Use Tax Changes and New Rates website.
- There is no sales tax on prescription drugs and certain medical devices.
- There is no state sales tax on food items and ingredients for home consumption; but they generally are subject to local sales and use taxes.
- Historically Georgia has had two sales tax holidays: one in August for Back to School supplies and one in October for energy efficiency products. However, Georgia cancelled both sales tax holidays in 2017 and it is unknown if they will resume in 2018.
- All taxes are collected by the Georgia Department of Revenue and then properly distributed according to any agreements that each county has with its cities.
- Georgia is a destination sourcing state. This means that sales tax is based on the location of the buyer.
- Georgia is a member of Streamlined Sales Tax (SST)
- Georgia raised taxes on gas for the first time in 44 years in July 2015. At that time Georgia's 7.5 cent excise tax and 4 percent sales tax was replaced with a flat 26 cent excise tax resulting in an increase of 6 or 7 cents per gallon, on average. In 2017, that rate increased again to 31.02 cents per gallon.
It can be deceivingly easy to be lured into a false sense of compliance when it comes to sales tax; after all we have seen where there is a tremendous variance in the tax rate, and taxability of things, just right across the street. That's why you need someone to help guide you through the Georgia mud and mire of sales tax regulations. Because just one sales tax mix-up and you may find that your small business is 'gone with the wind' as well.
Whether you are selling Georgia Mud Pie in DeKalb county, Fried Chicken at a road-side cafe outside Athens, Shrimp and Oysters in Savannah, or CocaCola in downtown Atlanta, you had better be clear on what is and isn't taxable, and at what rate this side of the road vs the other side of the road. With the changing tax regulations split by so many jurisdictions, trying to remain compliant makes you prone to error and consumes valuable hours of your time in collection, accounting and reporting for what is pass-through paperwork rather than revenue-generating activities.
Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avatax gives you the assurance of compliance without sacrificing productivity so that your sales tax is way less taxing than ever before.
Footnote:
1 - Gone with the Wind by Margaret Mitchell, 1936, Macmillan Publishers