Atlanta GA Sales Tax Rate

Atlanta, Georgia, is known for its diverse culture, rich history, and bustling economic scene. It’s a place every entrepreneur would wish to set up their businesses.

However, you must understand one financial intricacy in this city: the sales tax rate.

This post explores Atlanta’s GA sales tax landscape. We’ll break down the nuances of state and local sales taxes as well as explore recent changes.

So whether you’re an ambitious entrepreneur seeking to set up a shop in Atlanta, an established business owner reassessing your financial strategy, or simply a consumer eager to understand the invisible threads that weave through every transaction, this post is worth a read.

Understanding Sales Tax Basics

A sale tax is a consumption tax imposed on the sale of goods and services. It is typically a percentage of the purchase price and is added to the final cost paid by the consumer. The purpose of sales tax is to generate revenue for the government. The revenue is used to fund public services and infrastructure.

As a business owner, understanding and adhering to sales tax regulations is crucial for your business to operate legally and avoid financial liabilities.

It’s worth noting that different jurisdictions have different levels of sales taxes. Additionally, states, counties, and municipalities may levy their own sales taxes. This explains the variations in purchase prices for the same item in different locations.

What is the Sales Tax Rate in Atlanta, Georgia?

In Georgia, many counties have a sales tax and local tax. The Atlanta, GA, combined sales tax rate is 8.9%. The city charges a local tax rate of 1.9%.

Atlanta’s sales tax rate applies to the storage, use, and consumption of all tangible personal property and retail sale of certain services.

Here’s a breakdown of the Atlanta’s  8.9% sales tax:

• Georgia state sales tax – 4%
• Fulton County sales tax – 3%
• Atlanta tax – 1.5%
• Special tax – 0.4%

Atlanta, GA Sales Tax Nexus

What if you have nexus in Atlanta, GA? For those unfamiliar with the term nexus, it’s simply a significant connection to a state.

So, if you have nexus in Atlanta, GA, you must collect sales tax on applicable sales. You also need to file and remit that tax to the state.

But what does having nexus in Atlanta, GA, mean?

An economic nexus in Atlanta occurs when:

• You have tangible property for retail sale, use, consumption, distribution, or storage.
• You have (and maintain) a retail sales office, location, distribution center, warehouse, or another place of business within Atlanta.
• You have Atlanta, GA-based affiliates who earn commission by referring sales (also known as click-through nexus)
• Solicits business via an employee or another representative.

Note: If you’re an Amazon seller, you must take note of the Fulfillment by Amazon (FBA) warehouses in Atlanta, GA. This means you have Nexus in Atlanta if you store goods for sale through FBA in Georgia. As a result, you must fulfill sales tax responsibilities.

Georgia also has a new law on economic nexus, which became effective in 2020. According to the new law, if you’re a vendor making more than $100,000 in sales yearly or in the previous calendar year in the state or have completed 200+ transactions, you should collect and remit sales tax from buyers in Atlanta, GA.

Is Atlanta, GA, Origin-Based or Destination-Based?

Atlanta, GA, is designation-based: This means that the applicable tax rate for orders shipped from one location to another is that of the destination address.

For instance, if you ship orders from Atlanta and a customer orders from your store and requires the order to be shipped to Valdosta, you should charge the customer sales tax using the rate for Valdosta and not for Atlanta.

What is Subject to Sales Tax in Atlanta, GA?

Not all goods and services are subject to Atlanta’s sales tax. Therefore, as a business owner in Atlanta, it’s essential to understand products subject to this tax and those not.

So what’s taxable and what’s not?

For goods, the sale of all tangible personal property is taxable under Atlanta’s sales tax. However, there are some exemptions which include:

• Prescription medication
• Groceries
• Some medical devices
• Any materials or equipment used in research and development

Atlanta, GA, does not charge sales tax on most services. For instance, the sales tax does not apply to pet grooming or automotive repairs. Services that the Atlanta sales tax applies to include:

• In-state transportation of individuals (i.e. taxi services)
• Accommodations such as hotel stays
• Games and amusement activities
• Admissions
• Shipping and delivery charges

Note: E-commerce store owners should be aware of the tax on shipping charges. This applies to all charges necessary to complete the sale of a taxable property, such as handling costs.

Atlanta GA Sales Tax Registration

You must register for use and sales tax if you’re a business owner or dealer in Atlanta, GA. So, how do you go about it?

Atlanta, GA, sales tax registration is done online at the Georgia Tax Center.

To register, you’ll need a corporate officer’s social security number—officers are personally liable for any unpaid sales tax in Atlanta.

After successfully completing your Atlanta, GA, sales tax registration, you’ll receive your sales tax account number via email within 15 minutes.

If you have no idea how to complete your sales tax registration, the Georgia Tax Center has a set of instructional videos to help you out. Here’s a detailed video to guide you through the Atlanta, GA, sales tax registration.

But what if my products or services are tax-exempt?

Any individual or business that meets the definition of “dealer” must register for a sales tax number and a use tax number. This is regardless of whether your sales are out-of-state, online, or tax-exempt.

Moreover, any dealer is required to register for the following:

• A state hotel-motel fee account if you’re an innkeeper who must charge the state hotel-motel fee
• A prepaid wireless 911 charge account if you’re a retail seller of prepaid wireless
• A fireworks excise tax account if you sell consumer fireworks

Note: You don’t need to renew sales and use tax registration. It remains in effect as long as your business exists with no change in structure or ownership.

How to File Sales Tax Returns in Atlanta, GA

There are two primary ways for filing Atlanta GA sales tax returns:

• Electronically via the Georgia Tax Center or approved software vendors
• Via paper Form ST-3

The first option is mandatory for vendors owing more than $500. However, if you owe less than $500, you can choose from the two options.

As a vendor or business owner, you must file a return even if no sales tax is due.

Additionally, vendors are allowed to keep a particular percentage of the tax collected. This is known as the Vendor’s Compensation. 

Here’s how the vendor’s compensation works: you’ll keep 3% of the first $3000 collected. For any amount over $3000, you’ll get 0.5% as the Vendor’s compensation.  It’s worth noting that the Vendor’s Compensation only applies to returns filed and paid on time.

Are There Any Deadlines for Filing Atlanta, GA, Sales Tax Returns?

Like any other tax, there’s a deadline for filing sales tax in Atlanta, GA. Therefore, it’s important to understand sales tax deadlines to avoid tax penalties and other consequences.

So when should you file sales tax in Atlanta, GA?

For the first six months, you must file your sales tax returns monthly. After this period, you have two choices: continue filing your returns monthly or choose a different frequency.

However, if you choose a different frequency, you must make a written request and get a written approval. This flexibility is designed to accommodate businesses’ varying financial structures and needs, offering a more personalized approach to tax compliance.

If your request is approved, your filing frequency will be based on the amount of tax you’ve collected and owe.

You can opt for quarterly filings if your average tax liability over the preceding six months has been $200 per month or less. This option offers a more extended timeframe between filings, allowing businesses with lower tax liabilities to streamline their administrative process.

Those with modest tax obligations can choose the annual filing option. However, this option is only viable if your tax liability over the previous six months has averaged $50 per month or less. This option minimizes the frequency of filings, offering a more efficient and streamlined approach for businesses with minimal tax obligations.

After the initial six months, you may request a different filing period known as special period filing. This option is ideal, especially for businesses that experience unique circumstances or fluctuations in their financial activities. The special period filing offers a tailored approach to filing frequency, aligning more closely with your business’s specific needs during specific periods.

Deadline for Monthly Filers

If you prefer monthly tax filing for your sales tax in Atlanta, GA, your returns will be due on the 20th of the following month. For instance, returns for January are due on February 20th, February returns are due on March 20th, March returns are due on April 20th, and so on.

However, if the 20th falls on a legal holiday, weekend, or any day when the Federal Reserve Bank is closed, the return and payment will be due the following business day.

Deadline for Quarterly Filers

If you choose quarterly sales tax returns filings, your returns will be due on the 20th of the month following the end of the quarter.

Here’s how it works:

• Quarter 1: January – March: Returns due on April 20th
• Quarter 2: April  — June: Returns due on July 20th
• Quarter 3: July September: Returns due on October 20th
• Quarter 4: October —December: Returns due on January 20th

Deadline for Annual Filers

Annual filers only need to file their sales returns once every year. Their returns are due on January 20th of the following year.

Atlanta GA Sales Tax Penalties and Interest

You might ask, what if you file your sales tax returns late or fail to file them ultimately? First, sales tax returns in Atlanta, GA, are considered late if not filed by the 20th of the month following the end of the tax period.

If you use electronic payments, the Electronic Funds Transfer (EFT) must be completed by the due date. The return must be postmarked by the due date for those mailed via US mail.

Note that delinquent returns or payments will forfeit your Vendor’s Compensation amount. And in the case of a delinquent filing, all the taxes collected will be due.

So, what happens if you make partial payments or file returns or payments late? The following penalties will apply:

• Less than 30 days late: the greater of 5% or $5
• 30 days late or more: the greater of 5% or $5 for each 30-day period during which the payment was late

Note: The penalty for a single violation must not be more than 25% of the total tax due on the return date.

If you make a fraudulent sales tax return or file a return late with willful intent to defraud the state, you may face a 50% penalty.

What if I don’t file the tax returns entirely?

Unpaid taxes are also subject to interest in addition to penalties. The state charges interest at the annual prime rate plus 3% and accrues monthly. If unpaid, your interest will begin accruing on the due date.

Need Help With Atlanta, GA’s Sales Tax?

Whether you’re an ambitious entrepreneur, a small business owner, an established business owner, or a concerned consumer, it’s important to understand Atlanta GA sales tax rates. If you’re a business operating in Atlanta, you can stay informed, comply with regulations, and adapt to changes.

Remember to register your business for sales tax and file your tax returns in time to avoid penalties and interests. When choosing a filing period, choose one that aligns with your business size, needs, and capability.

Lastly, we encourage you to share this guide so that we can foster a more informed and compliant business environment in Atlanta, GA. 

Need help with any aspect of Atlanta, GA, sales tax? Contact Cumberland Law Group today for all your tax needs.