By Vidor A. Nosce
The Georgia Department of Revenue has amended, effective September 7, 2024, Regulation § 560-12-2-.107, Computer Equipment, regarding the Georgia sales and use tax exemption for computer equipment purchased by high-technology companies that became effective January 1, 2024.
Exclusion from exemption
The amended regulation excludes computers and devices issued to employees including smartphones, tablets, wearables, PCs, laptops, and prewritten computer software from the sales tax exemption.
Tax payment requirement
The amended regulation requires taxpayers to pay 10% of all state and local sales and use taxes on the first $15 million of computer equipment purchased each year for which the exemption is claimed. Taxpayers claiming the exemption by way of refund will receive a refund of 90% of the tax imposed on the first $15 million of eligible purchases for which the exemption is claimed.
Threshold calculation
The amended regulation clarifies that the threshold of $15 million in purchases or leases for each year for the exemption to apply is based on the fair market value of the taxable computer equipment purchased or leased.
Reporting requirements
Retroactive to July 1, 2021, each high technology company that has been issued a certificate of exemption must report to the Department a list of the facilities into which exempt computer equipment was incorporated, and the amount of taxes exempted during the preceding calendar year. The report is due by March 31 of each year following the year the high technology company utilized a certificate of exemption.
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