On May 3, 2018, Georgia Governor Nathan Deal signed H.B. 61 enacting significant changes to sales and use tax laws, including imposing a bright-line nexus rule on certain sellers of tangible personal property. Effective January 1, 2019, any seller that conducts 200 or more separate retail sales of tangible personal property for Georgia delivery or obtains more than $250,000 in gross revenue from such sales is considered a dealer that must either register to collect and remit sales tax or notify customers of use tax obligations and report to the state that such requirements have been fulfilled.

1. State & Local Tax Alert
Georgia Enacts Legislation Imposing Bright-Line Nexus Collection or
Reporting Requirements on Delivery Retailers
On May 3, 2018, Georgia Governor Nathan Deal signed H.B. 61 enacting significant
changes to sales and use tax laws, including imposing a bright-line nexus rule on certain
sellers of tangible personal property.1
Effective January 1, 2019, any seller that conducts
200 or more separate retail sales of tangible personal property for Georgia delivery or
obtains more than $250,000 in gross revenue from such sales is considered a dealer that
must either register to collect and remit sales tax or notify customers of use tax obligations
and report to the state that such requirements have been fulfilled.
Remote Seller Collection and Reporting Requirements
H.B. 61 requires delivery retailers2
with gross revenue exceeding $250,000 from retail sales
of tangible personal property or 200 or more separate retail sales in Georgia in the current
or previous calendar year to either: (i) collect and remit sales tax to the state; or (ii) comply
with new notice and reporting requirements.3
Retailers choosing to comply with the notice and reporting requirements must notify each
potential purchaser immediately prior to the completion of each retail sale that: “Sales or
use tax may be due to the State of Georgia on this purchase. Georgia law requires certain
consumers to file a sales and use tax return remitting any unpaid taxes due to the State of
Georgia.”4
Also, on or before January 31 of each year, these retailers must send a sales
and use tax statement to each purchaser who completed one or more retail sales with the
retailer of at least $500 in the aggregate during the prior calendar year in an envelope
1
Act 365 (H.B. 61), Laws 2018.
2
A delivery retailer is defined as a retailer that does not collect and remit sales tax imposed in the
previous or current year and had $250,000 or more in gross revenue from or conducted 200 or
more retail sales of tangible personal property to be delivered electronically to a location within
Georgia or physically to a location in Georgia or to be used, consumed, distributed, or stored for
use or consumption in Georgia. GA. CODE. ANN. § 48-8-30(c.2)(1)(A). Similar language has been
adopted to expand the definition of a Georgia dealer. GA. CODE. ANN. § 48-8-2(8)(M.1), (M.2).
3
GA. CODE. ANN. § 48-8-30(c.2)(2).
4
GA. CODE. ANN. § 48-8-30(c.2)(2)(A).
RELEASE DATE
May 23, 2018
STATES
Georgia
ISSUE/TOPIC
Sales and Use Tax
CONTACTS
Randy Holloway
Atlanta
T 404.704.0140
E randy.holloway@us.gt.com
Brad Brown
Atlanta
T 404.704.0133
E brad.brown@us.gt.com
Wes Davila
Atlanta
T 404.475.0046
E wes.davila@us.gt.com
Julie Arnold
Atlanta
T 404.704.0147
E julie.arnold@us.gt.com
Jamie C. Yesnowitz
Washington, DC
T 202.521.1504
E jamie.yesnowitz@us.gt.com
Chuck Jones
Chicago
T 312.602.8517
E chuck.jones@us.gt.com
Lori Stolly
Cincinnati
T 513.345.4540
E lori.stolly@us.gt.com
GT.COM/SALT

2. 2
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containing the words “IMPORTANT TAX DOCUMENT ENCLOSED” on the exterior.5
Finally, on or before
January 31 of each year, the delivery retailer must file a copy of the annual disclosure sent to each of its
purchasers with the Georgia Department of Revenue: (i) on a form prescribed by the Department; (ii)
that contains the total amount paid by each purchaser for retail sales from the delivery retailer during
the previous calendar year, along with supporting information;6
and (iii) that includes the following
statement: “Sales or use taxes may be due to the State of Georgia on the purchase(s) identified in this
statement as Georgia taxes were not collected at the time of purchase. Georgia law requires certain
consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia.”7
If
a delivery retailer fails to comply with these notice and reporting requirements and reasonable cause is
not shown, penalties will be imposed. With respect to the notice provisions to purchasers, a $5 penalty
for each failure to issue a point-of-sale notification and a $10 penalty for each failure to issue an annual
notification to a purchaser is applicable.8
A $10 penalty for each failure to report a purchaser
transaction to the Department is also applicable.9
Updated Use Tax Language
H.B. 61 modifies language requiring purchasers of out-of-state goods to pay use tax to include
application of use tax to items that are stored for use or consumption in Georgia, instead of merely for
items being stored in Georgia.10
Further, the legislation adds language stating “[i]t shall be prima-facie
evidence that such property is to be used, consumed, distributed, or stored for use or consumption in
this state if that property is delivered electronically or physically to a location within this state to the
purchaser or agent thereof.”11
Dealers making retail sales of tangible personal property to be delivered
electronically or physically to a location in Georgia are liable for the related sales or use tax, unless the
purchase is exempt.12
5
GA. CODE. ANN. § 48-8-30(c.2)(2)(B). The envelope must be sent via first class mail and separate from any other
shipments.
6
To the extent available, the statement must also include the date of each purchase, amount of each purchase and
the category of each purchase, including, if known, whether the purchase is exempt from taxation.
7
GA. CODE. ANN. § 48-8-30(c.2)(3).
8
GA. CODE. ANN. § 48-8-30(c.2)(4)(A), (B).
9
GA. CODE. ANN. § 48-8-30(c.2)(4)(C).
10
GA. CODE. ANN. § 48-8-30(c.1)(1)(A).
11
GA. CODE. ANN. § 48-8-30(c.1)(1)(C), (c.2)(5).
12
GA. CODE. ANN. § 48-8-30(c.1)(1)(B).

3. 3
© 2018 Grant Thornton International Ltd. All rights reserved.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms,
as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s
acts or omissions.
Department Declaratory Action
The legislation permits the Department to bring a declaratory action13
against any dealer that has not
been collecting and remitting the required sales tax.14
It appears that this clause was included in
recognition of the unsettled nature of similar state laws pending a decision in the Wayfair case.15
Specifically, the law allows the Department to establish that the collection obligation is applicable and
valid under state and federal law with respect to such a dealer.16
Further, if the action presents a
question for judicial determination related to the constitutionality of the imposition of taxes upon such a
dealer, the court must enjoin the state from enforcing the collection obligation.17
The superior court is
required to act on the declaratory judgment and issue a final decision in an expeditious manner.18
Commentary
Georgia legislators passed the new law including the bright-line nexus test on their second attempt,
having failed to complete full passage of similar legislation introduced in last year’s legislative session.19
With its enactment, Georgia joins a growing number of states which have enacted bright-line nexus
standards for sales and use tax, as well as notice and reporting requirements.20
Given the option to
follow notice and reporting requirements provided to delivery retailers, the bill does not explicitly require
delivery retailers to register for a sales and use tax license, which would be necessary in order to collect
sales tax and remit it to the state. The bill also modernizes the sales and use tax rules by specifically
stating that the electronic delivery of tangible personal property to a Georgia location is taxable. This
13
Declaratory actions are typically filed to provide certainty with respect to specific legal issues. Since there is
currently some uncertainty regarding whether a state can legally impose bright-line nexus rules for sales and use
tax collection on out-of-state retailers with no physical presence, the statute permits a Georgia court to issue a
declaratory judgment interpreting Georgia law and whether the bright-line nexus rules are permitted under Georgia
law.
14
GA. CODE. ANN. § 48-8-30(c.1)(2).
15
South Dakota v. Wayfair, Inc., No. 17-494 (U.S. 2018). See GT SALT Alert: Supreme Court Considers
Landmark Wayfair Case.
16
GA. CODE. ANN. § 48-8-30(c.1)(2).
17
Id.
18
Id.
19
H.B. 61, passed by House on Feb. 15, 2017.
20
For example, Pennsylvania and Oklahoma have enacted similar legislation. See GT SALT Alert: Pennsylvania
Enacts Legislation Imposing Collection and Reporting Requirements on Marketplace Sales, Modifying Net Loss
Deduction Limitation and GT SALT Alert: Oklahoma Enacts Legislation Imposing Collection and Reporting
Requirements on Marketplace Sales.

4. 4
© 2018 Grant Thornton International Ltd. All rights reserved.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms,
as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s
acts or omissions.
update tacitly recognizes the fact that modern business transactions are now completed electronically
rather than physically.
It is important to recognize that the Wayfair21
decision will have a major impact on what aspects of the
legislation ultimately are utilized. If the U.S. Supreme Court decides in favor of Wayfair and upholds the
physical presence nexus standard, Georgia would not be able to forcibly impose the economic nexus
provisions and require dealers to collect and remit sales and use tax on that basis alone. However, the
notice and reporting requirements would not necessarily be impacted, as such provisions have been
endorsed by the 10th Circuit in its Direct Marketing Association decision.22
If instead, the U.S. Supreme
Court decides in favor of South Dakota and endorses the use of economic nexus standards, Georgia
likely would be free to impose economic nexus standards and require dealers to collect and remit sales
and use tax. In that case, Georgia (and other states) may be motivated to eliminate the notice and
reporting requirement option currently being extended to remote sellers with economic presence.
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21
South Dakota v. Wayfair, Inc., No. 17-494 (U.S. 2018).
22
Direct Marketing Association v. Brohl, 814 F.3d 1129 (10th Cir. 2016), cert. denied.

5. 5
© 2018 Grant Thornton International Ltd. All rights reserved.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms,
as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s
acts or omissions.
such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as
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