Sales Tax and Use Tax Exemptions
Georgia helps companies lower their cost of doing business by offering the ability to purchase various types of goods and services tax free. These sales tax exemptions are defined in O.C.G.A. § 48-8-3 and several key exemptions are outlined in the table below.
|Manufacturing Machinery & Equipment||Manufacturing machinery and equipment that is integral and necessary to the manufacturing process and used in a manufacturing facility located in this state is exempt from sales tax. Qualifying machinery or equipment must be purchased for a new manufacturing facility, as replacement machinery in an existing manufacturing facility, or for the upgrade or expansion of an existing manufacturing facility. [Ga. Comp. R. & Regs. 560-12-2-.62]|
|Repair to Industrial Machinery||The sale or use of repair or replacement parts, machinery clothing, molds, dies, waxes or tooling for machinery which is necessary and integral to the manufacture of tangible personal property in a presently existing manufacturing plant is exempt from taxation.|
|Raw Materials and Packaging||Materials used for further processing, manufacture, or conversion into components of a finished product; materials coated upon or impregnated into a product being manufactured for sale; and non-reusable materials used to package products for sale or shipment may be purchased tax-free.|
|Energy Used in Manufacturing (New starting in 2013!)||The sale, use, storage, or consumption of energy which is necessary and integral to the manufacture of tangible personal property at a manufacturing plant in this state shall be exempt from all sales and use taxation except for the sales and use tax for educational purposes. This includes energy used directly or indirectly in a manufacturing facility. The exemption will be implemented over four years, with 25% phased-in each year beginning on January 1, 2013, and reaching 100% on January 1, 2016.|
|Primary Material Handling Equipment||Machinery and Equipment used to handle, move, or store tangible personal property in a new or expanded distribution or warehouse facility where the total purchase or expansion is valued at $5 million or more is exempt. The distribution or warehouse facility may not have retail sales equal to or greater than 15 percent of the facility’s total revenues. [Ga. Comp. R. & Regs. 560-12-2-.103]|
|Pollution Control Equipment||Machinery & equipment used for the primary purpose of reducing or eliminating air and water pollution is exempt.|
|Computer Hardware and Software for High Technology Companies||The sale of certain computer equipment is exempt when the total qualifying purchases by a High Technology Company in a calendar year exceed $15 million. A High Technology Company must be classified under North American Industry Classification System code 334413, 334611, 51121, 51331, 51333, 51334, 51421, 52232, 54133, 54171, 54172, 513321, 513322, 514191, 541511, 541512, 511513, or 511519.
[Ga. Comp. R. & Regs. 560-12-2-.107]
|Clean Room Equipment||Machinery and equipment and materials used in the construction or operation of a clean room of Class 100 or less when the clean room is used directly in the manufacture of tangible personal property is exempt.|
|Water Costs||The sale of water delivered through mains, lines, or pipes is specifically exempt.|
|Telecommunications Services||Instate calls are taxed. Interstate calls are exempt.|
Sales and Use Taxes and Exemptions are processed by the Georgia Department of Revenue. For more information, visit the Department of Revenue’s website. https://etax.dor.ga.gov/BusTax_SalesTax.aspx.
For Sales and Use Tax Forms listed on the Georgia Department of Revenue’s website, visit:https://etax.dor.ga.gov/salestax/st3forms/st3_indx.aspx.