Georgia Requires Marketplace Facilitators to Remit Sales Tax
A new Georgia law, that goes into effect April 1, 2020, will require marketplace facilitators, such as Amazon and eBay, to collect sales tax from Georgia customers and remit that tax to the state if a specific economic threshold is met. The new tax collection requirement kicks in when online facilitators that permit third-party sellers to conduct business on their websites reach $100,000 in annual sales in Georgia.
Remote sellers are still responsible for sales tax collection for Georgia transactions completed outside of marketplace facilitators, if the sellers meet the state's economic nexus thresholds or if the sellers establish physical nexus.
Georgia's Economic Nexus Thresholds
Since Jan. 1, 2019, Georgia has enforced economic nexus requirements. Today, out-of-state sellers must collect and remit sales tax on the sale of tangible personal property that is delivered electronically or physically to a location within Georgia as soon as the sellers reach 200 Georgia transactions or $100,000 of gross sales from Georgia transactions during the previous or current calendar year. Remote sellers with physical nexus also are responsible for remitting sales tax to the state.
The new law applies to a variety of internet sales platforms, including ride-share companies, such as Uber Technologies Inc., and vacation rental platforms, such as Airbnb Inc. Uber is expected to pursue separate legislation to grant a sales tax exemption to ride-share services.
Supporters of the new marketplace facilitator law contend that millions of dollars in sales tax is currently not collected by remote sellers from their Georgia customers. Legislators say this new law could result in additional revenue of more than $100 million a year for the state, counties and cities.
Currently, 38 states and the District of Columbia have marketplace facilitator laws. Georgia will join this list in April. Other states, such as Mississippi, have similar proposals being reviewed by legislators.