A Matter of Choice: Understanding Georgia’s QEE Tax Credit

A Matter of Choice: Understanding Georgia’s QEE Tax Credit

If you are passionate about school choice, you’ll want to know about Georgia’s Qualified Education Expense (QEE) Tax Credit. Launched in 2008, the program allows individuals, married couples and businesses to claim a dollar-for-dollar tax credit on their Georgia income taxes for donations to qualified preK – 12 schools. Specially designated Student Scholarship Organizations (SSOs) use the contributions to award scholarships so that students can attend private schools chosen by their parents. Several local institutions qualify, including:

  • Fannin Christian Learning Center
  • Josephine Edwards Christian School
  • Mountain Area Christian Academy
  • North Georgia Christian Academy

Currently, Georgia taxpayers can make contributions up to the following limits:

  • Up to $1,000 for single individuals;
  • Up to $1,250 for married individuals;
  • Up to $2,500 for married couples filing jointly;
  • Up to 75 percent of their Georgia income tax liability for “C” corporations; and
  • Up to $10,000 for members of limited liability corporations (LLCs), shareholders in Subchapter “S” corporations, and partners in partnerships.

The amount of tax credit is limited to the donor’s tax liability or actual donation amount, whichever is less.

To earn the credit, go to the GaSSO website and complete the 2020 Tax Credit Form (georgiasso.us/pledge-form) by December 31, 2019. GaSSO will then file your form electronically with the Georgia Department of Revenue, which must pre-approve your donation, as there are only a limited amount of tax credits available each year ($100 million).

If you have a student attending MACA, you can apply for a scholarship for your child through GaSSO. Click this link for the application form: georgiasso.us/scholarship-application-form

Start Saving for College, Too!

Georgia’s Path2College 529 Plan (www.path2college529.com) offers significant tax advantages for those saving for future higher education expenses. Contributions grow tax-deferred, and withdrawals for qualified higher education expenses are tax-free. Funds may be used at virtually any college or university in the United States, and many abroad.

Contributions up to $2,000 per year, per beneficiary, are eligible for a Georgia state income tax deduction for those filing a single return; and $4,000 per year, per beneficiary, for those filling a joint return. The Path2College 520 Plan currently offers seven investment options, and may be opened with as little as $25.

If you’re considering participating in the QEE Tax Credit program and/or Path2College 529 Plan, just let us know and we can provide more details on the potential tax savings.

Do You Need a Sales Tax Permit?

If you’re starting a new business — whether retail, rental or even a home-based business — you may need to charge sales tax. Essentially, anyone selling tangible items in the state of Georgia needs a sales tax permit.

You can easily register your business at the Georgia Tax Center website (gtc.dor.ga.gov/_/#1) by clicking on “Register a New Georgia Business.” Before you do, make sure you have some basic information handy, including:

  • Business name, address, etc.
  • Business type
  • Business history (including any previous state IDs)
  • Business ownership details (including any partners)
  • Withholding information

Note that there is no cost to apply for a sales tax permit in Georgia (there may be other business registration fees). You will not need to renew the permit, though you will need to update it if your address or other information changes. Online registration is quick — your actual permit will arrive in the mail within days after you register.

If you have any questions about your sales tax status or need help registering, give us a call. We can also handle your sales tax payments for you, saving you the time and hassle.

The information provided here by Premier CPA Services PC is for general information only. It does not constitute legal, accounting, tax or other professional advice or services, and is presented without any representation or warranty as to the accuracy or completeness of the information. Please contact us for information as it relates to your circumstances.
Georgia Sales Tax: Your Questions Answered

Georgia Sales Tax: Your Questions Answered

The State of Georgia collected a whopping $23.79 billion in tax revenue last year — $2.12 billion this past June alone. That $2.12 billion came from a variety of sources — everything from $1.04 billion in individual income tax to $164 million in motor fuel tax and $19.2 million in alcoholic beverage tax.

Of course, much of the State’s tax revenue comes from Sales and Use Tax — something we get asked about a lot by our small business clients. In particular, many Fannin business owners and nonprofits have questions about tax-exempt sales.

Who Decides?

In general, the State of Georgia assumes that all sales are subject to sales tax until proven otherwise. The burden of proof that a sale is not subject to sales tax is on the person who makes the sale (unless the seller receives a valid ST-5 Sales Tax Certificate of Exemption from the buyer).

Big picture, the State imposes tax on the retail sales price of most tangible personal property — everything from furniture and home appliances to motor vehicles — with exceptions for things like prescription medication. A common misconception is that nonprofit organizations are not required to pay sales tax. The reality is that most nonprofits — churches, religious, charitable, civic and other 501(c)3-type organizations — are only exempt from income taxes and are subject to sales tax just like any other entity. (Of course, there are a few exceptions to this.).

Unlike tangible goods, most services are tax-exempt in Georgia, but the State does tax the sale of:

  • Accommodations (e.g., hotels, cabin rentals)
  • In-state transportation of individuals (e.g., taxis, limos)
  • Admissions and charges for participation in games and amusement activities
  • Charges made for delivery, transportation, freight or shipping & handling that are part of the taxable sales price
  • Mandatory gratuities on a taxable sale
  • Restocking fees
  • Newspaper and magazine sales, including subscriptions

The reality is that it can get a little crazy trying to figure out what is taxable and what is not. For example, ear piercing is not a taxable service. However, if the piercing charge is a mandatory charge associated with a taxable sale – such as the sale of earrings – then the piercing charge is subject to tax.

In fact, the list of services and items that are tax-exempt runs 17 pages long on this official list from the State of Georgia.

Who Do You Charge (and How Much)?

Once you determine if an item or service is taxable, the next step is to determine how much sales tax you need to charge different customers.

Store Sales — For traditional business owners selling goods or services onsite, sales are taxed at the rate based on the location of the store. So, if you own a boutique in downtown Blue Ridge, you would charge customers a flat tax of 7% on all sales. This is based on Georgia’s 4% sales tax + Fannin County’s 3% sales tax, which includes our 1% Special Purpose Local Option Sales Tax (SPLOST).

In-state SalesThe state of Georgia follows what is known as a destination-based sales tax policy. So, if you are selling hot tub supplies over the internet, for example, sales are taxed according to the address of the buyer. A customer living in Savannah who purchases a $350 hot tub cover would be charged the State’s 4% sales tax + 3% for Chatham County, for a total sales tax of $24.50. If you charge for shipping, that would also be taxed.

Out of State Sales — The only time you need to pay sales tax on out-of-state sales is if your business has “nexus” in other states. Nexus means that your business has a physical presence in another state. Common types of nexus include:

  • A physical location, such as an office, store or warehouse
  • An employee who works remotely or who is a traveling sales representative
  • A marketing affiliate
  • Drop-shipping from a third party seller
  • A temporary physical location, including festival and fair booths

When Is It Due?

The Georgia Department of Revenue requires businesses to file sales tax returns and submit sales tax payments online. How often you need to file depends upon the total amount of sales tax your business collects.

Annual: If your business collects less than $50 in sales tax per month, then your business should file returns on an annual basis.

Quarterly: If your business collects between $50 and $200 in sales tax per month, then your business should file returns on a quarterly basis.

Monthly: If your business collects more than $200 in sales tax per month, then your business should file returns on a monthly basis.

Need Some Help?

Computing, collecting and remitting Georgia sales tax can add an unwelcome level of complexity to running your business. The consequences of getting it wrong include costly fines and the dreaded sales tax audit.

If you’re thinking of opening a business — or just want to make sure you’re handling sales tax correctly with your current one — give us a call. We’ll be happy to answer your questions and can even show you how to set up QuickBooks to correctly compute and collect sales tax.

(Source: Georgia Department of Revenue)

Valuation Appeal Deadline Approaching

If you own property in Fannin County, you should have received an Annual Assessment Notice from the Fannin County Board of Assessors in the mail recently. This annual notice shows the amount of your 2019 ad valorem tax bill based on your property’s appraised and assessed values.

It also provides information on filing a property tax appeal, which must be done in writing no later than 45 days after the date of the notice. If you do not file an appeal by the due date, your right to appeal will be forfeited.

Details and forms for filing a property tax appeal are available on the Georgia Department of Revenue website. You may also visit the Fannin County Tax Commissioner’s website.

u

Fun Facts

1.

One in eight American workers have been employed by McDonald’s.

2.

Walmart averages a profit of $1.8 million every hour.

3.

Yahoo is an acronym for “Yet Another Hierarchical Officious Oracle.”

4.

Google was originally called BackRub.

5.

70% of small businesses are owned and operated by a single person.