Georgia - GA Sales Tax Calculator: User Guide

Georgia is a US state located in the southeastern region of the country, covered with beautiful beaches, mountains, and farmlands. This 24th largest state in the area has the eleventh best economy in America, giving endless opportunities for entrepreneurs and businesses.

So if you are planning to start, relocate, or expand your business in Georgia, then you should be trained to deal with payroll, paychecks as well as income and sales taxes in the Peach State.

As it is hard to cover every factor in one guide, this guide will educate you with all the essential details about the Georgia Sales Tax.

Georgia Sales Tax Facts:

• Georgia State levy 4% of sales tax on the state level.
• On the top of Georgia State level Sales Tax, several counties charge local sales tax ranging from 2% to 4%, and Cities and/or municipalities of Georgia charges local sales tax ranging between 0% and 1.5%.
• In some cases, a special sales tax rate ranging from 0% to 1% may also be added to the combined Georgia Sales Tax.
• Georgia State levies different sales tax depending on the type of purchases. Some of the commonly imposed sales tax types include Consumers use, rental tax, sales tax, sellers use, and lodgings tax.
• Austell, Georgia levy the lowest possible combined sales tax rate of 4%.
• Waycross, Georgia levy the highest possible combined sale tax rate of 9%.
• The combined sales tax rate of Georgia is lower than 53.8% of states in the country.
• In Georgia, Machinery, Raw Materials for Manufacturing, and certain Medical Devices are exempted from Sales Tax. In contrast, Groceries are partially exempted, as they may be subjected to local sales tax but no state-wide sales tax. However, some other types of purchases are also exempted from Sales Tax, for which you can find a complete list of exemptions here.
• The Peach State, aka Georgia, has five sales tax holidays where purchasers can buy products like Clothing, computer, energy-efficient products, school supplies, and water-efficient products without paying sales tax.
• Individuals and companies in Georgia are exempted from sales tax if they are buying goods for resale, improvement, or as raw materials.

How to calculate Sales Tax in Georgia?

Businesses and Sellers who have Nexus are required to pay Sales tax to Georgia (state and local) on the sale of certain goods and services. They are required to collect, manage, and transfers it to the Georgia Department of Revenue (GDR) while staying in compliance with state laws and avoid penalties and interest.

The sales tax determined on four factors:

1. Nexus: It is a connection of business with a state. The business is only liable to pay taxes to the states with Nexus.
2. Seller's Eligibility: Seller is only required to register, collect, and remit the sales tax to the authorities in the state if it falls under the criteria provided by the state.
3. Location and Products or Services: The sales tax rate varies from product to product and location to location, so you must check the sales tax rate applicable to your product according to the product category, county, and city in Georgia.
4. Exemptions: Almost all goods are eligible for sales tax regulation. However, products, including Groceries (partially-exempted), prescription medicine, medical devices, and few more, are exempted under Georgia Law. So you should check with Georgia state government as to which goods and services sold in Georgia are subject to sales tax.

To calculate Sales Tax in Georgia, follow the steps below:

Step 1 – Determine your Nexus:

You, as a Business owner, are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in the Georgia State. And to determine your Nexus in Georgia, you must have any of the following:

• A physical location like office, warehouse, retail store, or other places of business.
• An employee working for you in this state.
• An Out-of-state seller with no physical presence in a state but having ties to businesses or affiliates in Georgia.
• Click-through nexus of the out-of-state seller
• Economic nexus of the out-of-state seller
• A seller Making sales through a marketplace.
• Storing property for sale or having inventory in the state
• Made sales during convention or trade show activities

Step 2 – Determine the eligibility to collect sales tax as a seller:

Seller is eligible to register, collect and remit sales tax under Georgia Law, if:

1. The seller has gross revenue exceeding $250,000 from sales of tangible personal property delivered electronically or physically in Georgia in the previous or current calendar year.
2. OR, Makes 200 or more sales in the previous or current calendar year from sales of tangible personal property delivered physically or electronically in Georgia.

Step 3 – Determine the Sales Tax Rate:

Once you have determined that your Nexus is with Georgia, next is to deduce the Sales Tax rate (State + Local Sales Tax) applicable on your product, for which you can refer the tables below:

Georgia Sales Tax Rates by Location:

The state-wide Sales Tax rate in Georgia is 4%. Besides, many cities and counties levy additional local sales tax on tangible personal property and certain services. Following are the Sales Tax rate on State, County, and city level in Georgia:

Step 4 – Calculate Sales Tax:

After the determination of the Sales Tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.

Example # 1:

For instance, you are selling a Printer on your store in Johns Creek, Georgia, having a net price tag of $140. The amount that a buyer has to pay (including sales tax) on a check out would be:

Manual Method:

Net Price (amount before Tax) of a Printer: $140

Total Sales Tax rate: 0.00% (Johns Creek) + 3.75% (Fulton County) + 4.00% (Georgia State) = 7.75%

Total Sales Tax amount = $140 x 7.75% = $10.85

Gross Price (Amount after Tax) = 140 + 10.85 = $150.85

It means the amount the buyer has to pay for a Printer on a cash counter would be $150.85.

Using our Sales Tax Calculator:

All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:

1. Input the $140 Net Price of a Printer as Amount Before Tax
2. Input or select 75% of the combined Sales Tax rate on the Tax Rate menu.

Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:

Reverse Sales Tax Calculation

In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.

But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.

This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Georgia Sales Tax Calculator can perform this calculation like a Pro.

Example:

Your buyer has paid $225 for a Laser Printer at your store in Valdosta, Georgia. Now the buyer is inquiring how much the Laser Printer actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of a Laser Printer:

Gross Price (Amount after Tax) of Laser Printer: $225

Total Sales Tax rate: 0.00% (Valdosta) + 4.00% (Lowndes County) + 4.00% (Georgia State) = 8.00%

Manual Method:

Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]

225 = [Net Price x ((8/100) + 1)]

225 = Net Price x 1.08

$208.3 = Net Price

So the original Price (net price) of the Laser Printer was $208.3.

Using our Sales Tax Calculator:

You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the above mentioned manual method. All you need is:

1. Input the $225 Gross Price of Laser Printer as Amount after Tax
2. Input or select 8.00% of combined Sales Tax Rate on the Tax Rate

Our calculator will automatically calculate the result and represents it in 3 different forms.

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