Why Do Businesses Have Problems with Georgia Sales Tax?
Georgia sales tax is a tax that the state of Georgia or a municipality demands must be added to the purchase price of a good or service. The person who sells the good or service is the person who is supposed to collect the sales tax.
In other words, Georgia or the city are, in essence, ordering the merchant or seller to act as the tax collector of that tax. The government has now forced the merchant to take responsibility for collecting the tax, setting it aside in a safe place, keeping accurate records of the amounts, and forwarding the tax on to the government at the appropriate times intervals.
There are serious problems with this scenario for the business person.
Most small business persons are not accountants and yet they are being required to keep accurate records of money that doesn’t belong to them.
Filling out tax forms, and filing them on time
No one likes preparing tax returns, but the small business person is now being forced to fill out and file sales tax returns on a regular schedule, and they are not supposed to file the tax forms late.
Must send the sales tax money to Georgia
The business must also forward, or pay over, to Georgia, the sales tax money they had collected from the consumer.
Accidentally Misuse of sales tax money
The business person much safeguard the sales tax, and be very careful to not spend the money. Lots of small business persons don’t manage their bank accounts very well. They sometimes “co-mingle” their business revenue with their personal money. They may only have one bank account that bother business and personal money flows through.
If sales tax money is placed into that account, the odds are very high that the business owner will accidentally spend some of the tax money to pay business or personal bills.
Lots of times this is an accident, but since small businesses often don’t have any excess cash, by the time the business person catches their error they won’t have any excess money available to put back into the account to pay the sales tax.
Intentionally Misuse of Sales tax money
Another scenario that happens is when the business owner is experiencing cash flow problems, meaning the business is not producing enough cash flow each week or month to pay its own bills and allow the owner to make a living as well.
When this happens, the business owner may make the decision to “borrow” the tax money and pay their business or personal bills with it. Most of the time the business owner has good intentions of repaying the “loan” and redepositing the sales tax money into the account.
But a lot of the times, the business owner’s cash flow problem doesn’t get any better and there isn’t any excess money available for the business owner to repay what was meant to be a temporary bridge loan, albeit an illegal loan.
Fear Takes Over
If an event, no matter whether it is self-caused or not, ever causes a business owner to not be able to file or pay the sales tax money over to the state, this causes the business owner to have great fear of what the government will do to them. They fear that their business will be shut down, or that they’ll be sent to jail.
This fear causes the business owner to take no action to fulfill their responsibilities. The business owner may stop filing their Georgia sales tax returns altogether for months or years.
Don’t Let Fear Control You
Unless you can get a grip on your fears and get help, you are in big trouble. You must begin dealing with your sales tax problem.
The action you must take is not easy, but its necessary. If you want to know all your options you must seek out an experience tax professional.
Georgia Sales Tax Forms
The Georgia tax forms for sales tax at be found on the Georgia Department of Revenue’s sales tax’s form page.
Where to File or Make a Payment
A business owner should go to the Georgia Department of Revenue’s Georgia Tax Center at www.GaTaxInfo.org. Once there the business should register and set up an account to enable your online access.
The Georgia Tax Center is a secure, on-line, self-service portal. The Georgia Tax Center has replaced all other ways of sending in payments or tax forms to the Department of Revenue. In other words, you can no longer us the e-File/e-Pay system for filing, payments, and correspondence to the Department.
I hope you found this information helpful.
Jeff Fouts, Tax Attorney.
I’ve included two definitions below that define Georgia Sales and Excise Tax.
Definition of of Sales Tax in Georgia
A Georgia sales tax is a tax paid by a consumer to a merchant when the consumer purchases certain goods or services. A sales tax can be assessed by the state of Georgia, or a municipality.
The merchant is acting as the tax collector on behalf of Georgia or the particular municipality which has assessed the tax.
The tax amount is usually a percentage of the amount of the sale price.
The State of Georgia has exempted certain goods or services from the sales tax.
What is an Excise Tax?
Excise taxes are taxes paid by a consumer when they purchase a specific item or product, such as:
- diesel fuel
- airline tickets
- trucks, etc.
Excise taxes are usually included in the price of the product. This makes excise taxes different from Georgia sales taxes which are added separately. Georgia sales tax is calculated, in addition to, or on top of, the cost of the product, with the cost including the excise taxes.
The excise tax is usually calculated on a per unit basis, for example:
- per gallon of gasoline or diesel fuel
- per gallon of wine or liquor
- per packet of cigarettes
The excise tax is usually passed on by the manufacturer to the consumer who purchases and consumes the product.