According to the Atlanta TV station, WXIA, Georgia will now require residents to pay an 8% online sales tax. Georgia will become the 10th state to require an online sales tax, and shopping at sites that don’t collect will result in a “use tax” paid to the Georgia Dept. of Revenue.
So how does this affect your small business? Allow me to offer some advice
Users are used to paying tax online
First, you shouldn’t panic – this isn’t the end of the world or your online sales. Shoppers routinely buy online at sites that collect sales tax, mainly because those businesses are located or have an office inside of that state, so users are somewhat conditioned to seeing a tax line on the checkout.
Collect the right taxes
Secondly, you need to be sure that your site is collecting sales tax properly. Prior to this law, when purchasing online you would often have to select your county when checking out – this will reverse that option and allow for a flat 8% sales tax, so if your site needs to collect the new tax, it should be straightforward.
Be proactive in keeping customers happy
Third, it’s no secret that this means that buying online will now cost more for Georgia residents. Business owners should consider taking a hard look at free shipping to keep buyers interested, or some sort of incentive or price break to stay competitive online.
Obviously this day was coming – as many local and state governments deal with smaller budgets and larger demands, a tax of some sort on the glorious e-commerce bucket was coming. Now that it’s here – be proactive to ensure your customers don’t price-shop elsewhere.
Wait Georgia state sales tax is 4% and the counties have a 3% (most of them) and the city of Atlanta has a 1% so the only place Georgia’s sales tax would be 8% is in the City of Atlanta (State+county+city). If they are making it 8% for online how are they handling it, is the state getting all of it, or do they have a system to identify which counties the orders originated from and then give them the other 4%. Please tell me the City of Atlanta isn’t now getting 1% of all internet sells in the state of GA. Do the sites have to provide a county by county list of sales when they pay the tax? For most of the state an 8% tax rate is 1% higher than local stores. Since before this GA tax code already required that if you didn’t pay taxes on a catalog or online purchase you should file and pay it at the end of the year, this is effectively a 1% tax increase in addition of fixing the loop hole of self reporting (which I’m sure we all did :))
Hi Joseph! From what we understand, if you are resident of GA, buying from a business in GA, you’ll pay the same ol’ sales tax (with a county dropdown) that has a varying rate. That went into effect this year also.
If you are not a resident of GA and purchase from a business in GA, you’ll pay a flat 8% sales tax. This is a “state tax”, so it will only affect merchants inside of GA and the non-state residents who purchase from them.