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How To Get A Georgia Sales Tax Certificate of Exemption

How To Get A Georgia Sales Tax Certificate of Exemption

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How To Get A Georgia Sales Tax Certificate of Exemption

A Georgia Sales Tax Exemption Certificate (also referred to as a Resale Certificate) is a document that allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling them.

Learn how the Georgia Certificate of Exemption works, how to get one, and more.

Related: Guide to starting a business in Georgia

How Does a Sales Tax Certificate of Exemption Work?

When retailers purchase products to resell, the small business owner doesn’t often pay sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying the state sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.

For instance, when a bookstore in Georgia purchases books from a distributor to sell in their store, by having a Sales Tax Certificate of Exemption, the bookstore owner won’t usually pay sales tax on this transaction. When a customer purchases a book, the retailer will charge sales tax to the customer based on the full price of the book. Then, typically at the end of the month, the bookstore owner will take all of the state sales taxes that were collected and send them to the Georgia Department of Revenue.

It’s important to know that the sales tax exemption is only intended to be used for inventory that will be resold and not intended for the tax-free purchase of items used in normal business operations such as paper, pens, etc.

Steps To Fill the Georgia Sales Tax Certificate of Exemption (Form ST-5)

ST-5 Georgia Sales Tax Certificate of Exemption Form

Before a business starts selling products or providing taxable services, it must first get a Georgia Sales Tax Number from the Georgia Department of Revenue. After registering, this number will be used when filling out the Georgia Sales Tax Certificate of Exemption. 

Step 1: Download Form ST-5

Begin by downloading the Georgia Sales Tax Certificate of Exemption Form ST-5 

Step 2: Certify the exemption being claimed

Certify the type of exemption being claimed (Most resellers are going to select the first checkbox (Purchases or leases of tangible personal property or services for resale only under O.C.G.A. § 48-8-30)

Step 3: Identify the seller’s information

Fill out the seller’s name and address.

Step 4: Identify the buyer’s information

The information needed from the buyer includes:

– Business Name (Refers to the legal name of the business)
– Sales tax number
– Type of business
– Address
– Printed name and signature
– Title
– Telephone number
– Email

Georgia Sales Tax Certificate of Exemption FAQs

How much does a Georgia Sales Tax Certificate of Exemption cost?

There is no cost for a Certificate of Exemption in Georgia.

Does a Georgia Sales Tax Certificate of Exemption expire?

The Georgia exemption certificate is valid until revoked in writing.

How often is Georgia sales tax due?

Most new businesses are set up to file and pay sales and use tax monthly, but depending on the amount of tax collected, your business may have a different filing frequency.

Where do I file the Georgia sales tax exemption certificate?

In Georgia, the certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise to the reseller).

Is a Sales Tax Certificate of Exemption the same as a Sales Tax Number?

No – The Sales Tax Number and Certificate of Exemption are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax Number allows a business to sell and collect sales tax from taxable products and services in the state, while the Certificate of Exemption allows the retailer to make tax-exempt purchases for products they intend to resell.

Also, in addition to these, your business may need to register for additional items. For more information, check out our guide to Georgia business licenses.

What steps should a business take to accept a resale certificate?

When a business is presented with a resale certificate, it is the seller’s responsibility to verify the buyer’s information and maintain records to demonstrate the seller’s due diligence. Failing to verify this information may result in the seller being liable for Georgia sales taxes.

Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out.  
– Verify that the purchaser’s Georgia Sales Tax ID is valid with the Department of Revenue’s Verification Tool.
– Sellers are also responsible for considering whether the goods and services sold are consistent with their type of business.  For example, if the buyer’s business is a car dealership, but they want to purchase office supplies tax-free, the seller should investigate further.  
– Keep a file of resale certificates. 

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

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How To Get A Georgia Sales Tax Certificate of Exemption

How To Get A Georgia Sales Tax Certificate of Exemption

8 Responses

  1. Can I use the sales tax certificate of exemption when I make purchases in states other than in Georgia? Will out-of-state suppliers be able to honor my sales tax exemption certificate?

    1. Hi Angela

      Generally, all out-of-state suppliers will honor your sales tax exemption certificate, though they are not required to.

      Hope this helps!
      Greg

  2. I’ve been selling on eBay for a long time, but am going to start reselling on Amazon.

    It says that the sales tax would still need to be paid, but am I right to assume that is the part where Amazon charges sales tax?

    Also, do you need to be an LLC or something similar to get a resell certificate to get tax exemption status?

    Thanks!

    1. Hi Heather – Amazon does collect sales tax for all sellers (https://www.amazon.com/gp/help/customer/display.html?nodeId=202211260), but there are some complications in Colorado as some cities are able to separately charge sales tax if they haven’t adopted marketplace facilitator laws – https://blog.taxjar.com/file-sales-taxes-colorado-home-rule-jurisdictions/

      An LLC isn’t required to get the sales tax exemption certificate. You will still need to register for the sales tax number with the Geogiat Department of Revenue’s Georgia Tax Center first. and then you can fill out the ST-5 Georgia Sales Tax Certificate of Exemption.

      Hope that helps. Let me know if you have any other questions!
      Greg

  3. I recently relocated to Georgia, my business is incorporated in Delaware. We invest in passive income opportunities. One of the opportunities will involve buying/reselling. Do I need to register my business with GA Dept of Revenue and obtain a Sales Tax Number for GA?

    1. Hi LaVerne

      If you will have a physical presence where you are operating in the state, you will need to get a sales tax number – https://startup101.com/how-to-register-for-a-sales-tax-number-in-georgia/

      Also, as an out of state corporation, you will need to register as a foreign corporation – https://sos.ga.gov/how-to-guide/how-to-guide-register-foreign-entity

      In addition, depending on the city, you may need to register with them as well – https://startup101.com/what-business-licenses-permits-are-needed-in-georgia/

      I hope this helps. Let me know if you have any other questions!

      Greg

  4. Can a company with a FL certificate of exemption use this exemption in GA? or does it need to apply for GA Certificate of exemption?

    1. You don’t have to (and can’t) get a resale certificate from each state where you buy inventory for resale. So, as a Florida company purchasing inventory from a Georgia company (or any company in the US), the Georgia vendor would accept your Florida certificate of exemption.

      Hope that helps!
      Thanks!
      Greg

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