An online sales tax for Georgia?

Gov. Nathan Deal has proposed extending the state sales tax to online sales.

Eight states already tax electronic commerce, but most states have held off because Congress had signaled it would devise a national model to simplify the thousands of tax rates used by state and local governments across the country.

“In the absence of congressional activity on that … I think there will be some appetite to act on that in the legislature,” he said. “That’s still in the very, very early stages of discussion.”

The governor told the members of the Georgia Press Association that it could be a way to replace taxes the state would give up by exempting energy factories use from sales tax, an idea he is pushing this legislative session in hopes it will lure more manufacturing employers.

“It’s not something that can be easily done,” said Rep. Mickey Channell, chairman of the House Ways and Means Committee.

Federal court decisions limit how states can apply the tax, he said, adding that he favors it as a former retailer.

Earlier this year, made headlines when it challenged California’s sales tax on online sales, but ultimately backed down when a deal was reached with the state government.

Last year, in the comments to another post, I stated that if I were to buy an iPad at the Apple store, I’d pay the state sales tax, but by ordering it online, I might avoid the sales tax. A commenter whom I believe has reason to know better noted that if I did order it online and avoided paying sales tax, I’d still be obliged to pay a Georgia use tax on the purchase, though compliance with that tax is likely very low.


  1. Three Jack says:

    So basically the governor wants to provide targeted tax breaks to manufacturing companies represented by many lobbyists on the backs of Georgia consumers not represented by lobbyists.

    As I have stated many times before, overhaul the tax system in Georgia…stop with the crony capitalistic tax breaks for very specific industries.

  2. Charlie says:

    The trigger for online sales tax right now is whether or not the seller has a physical presence in the state. If they do, they are required to collect sales tax.

    This is why I support the extension of the tax to all online purchases, though I frankly don’t know how the state has an enforcement mechanism to collect taxes from out of state companies who have no Georgia presence.

    The current tax structure penalizes business who locate here and rewards those who don’t. As sales taxes continue to increase (SPLOSTS, FairTax, etc), the difference grows wider.

    I do hold Three Jack’s concern, however, that as we broaden the base, the tax relief continues to be targeted at a special few. While I do understand that energy on manufacturing can be considered like an embedded VAT instead of a pure sales tax, extending sales taxes to online purchases while giving Arthur Blank $415M (so far) plus waiving his sales tax on building the new Falcons stadium is a problematic link that will be very easy for opponants to make.

    • Doug Deal says:

      What benefits do out of state businesses receive from Georgia? What moral right does the state have to their profit?

      Laws are already in place to tax the consumer. If the consumer is not complying, then there is a very unpopular solution, instead of expecting out of state businesses to fund your excesses.

  3. saltycracker says:

    Software is available to collect and distribute sales tax at many levels of jurisdiction anywhere in the U.S. selling stuff with your i-device.

  4. Harry says:

    It may indeed be smart strategy for Georgia to lobby congress for the statutory ability to tax incoming no-nexus web commerce and offset the revenue with further sales tax exemptions for energy used in production. There is lots of distribution originating from this state, but it’s primarily national companies with all-state nexus anyway, so they don’t escape collecting and remitting sales tax as things stand. On the other hand, few web commerce activities who are able to take advantage of favorable no-nexus conditions, are based in Georgia. We don’t seem to have enough breed of yuppies and hipsters to be strong in that arena. On the other hand, it seems an excellent opportunity to improve manufacturing (Porsche?) if we could become more competitive with our neighbors.

    • Todd Rehm says:

      Like your thinking Harry, though I think it’s more likely we might get an Audi plant up in Extreme Northwest Georgia. Porsche has made major upgrades to it’s Leipzig manufacturing facility, and Audi has been known to be shopping for a stateside location.

  5. Rick Day says:

    My business paid about $80k in sales tax last year.

    This week I drove to Gainesville, FL to save tax and shipping on something I FOUND online but did not BUY online. Between ‘cash talks’, no shipping, no sales tax, less time and gas and I still saved a bit over $800.

    Today I spent that $800, and then some, on a repoed POS system for the business.

    Even while weaving in and out of the grey market, I pay my share of tax.

    Obviously ‘tough times’ is a subjective term.

  6. All I ask Deal and company is to work with Amazon and other online merchants in fashioning Georgia’s plan… otherwise many of the largest online retailers will fire their Georgia based affiliates… and there are thousands of us. That means thousands of Georgians out of work. It would force me to close one of my businesses or move it to another state.

  7. you says:

    Having an internet business, will I have to collect sales tax on every sale now? As it stands, I only collect sales tax on those who live in GA. If we have to collect sales tax on every sale, no matter where they live, it will hurt sales. If we are required to collect for every state, that is just a pain and time consuming for a small business. Aren’t there enough regulations for small businesses already? It is no wonder that so many are closing; politicians are making it impossible to make a living.

    • saltycracker says:

      And it will hurt “you” sales because folks will buy locally, leaving price or unique product as the internet advantage ?

      • you says:

        I have a local store and I already collect sales tax from GA residents. People who shop online are often looking for the best deal. It will hurt my business because people from other states will buy from the online site that is not in GA. If every state was collecting sales tax then it would not really matter, assuming all sales tax are around the same rate.

  8. Engineer says:

    Personally, I feel sales tax for internet companies should be based on the location of the business. It is like if somebody goes shop at a store in Jacksonville, FL, should the business be forced to charge you Georgia sales taxes or their normal Florida Sales Taxes? Obviously, they go based on the local Florida tax rates.

    However, if you purchase the same item, from the same location, online, should the business be forced to pay Georgia sales taxes?

    So for this reason it is my opinion that the local sales tax of the dealer should be the sales tax issued.

    • you says:

      When buying a car you are charged sales tax based on where you live, not the location of the business. I never understood this. A business should collect sales tax for the area it is located.

      • Engineer says:

        Yeah, I have never understood the reasoning or the Constitutionality of that rule either. In the case I mentioned, I was referring to stuff like clothes or car parts (tires, rims, etc.) or some stuff to that effect.

        The Constitution, prohibits interstate taxes. In the case of Quill v. North Dakota (in 1992) the Supreme Court reaffirmed that the US Constitution granted exclusive power to the Congress to regulate interstate commerce and that individual states could not force companies in other states to collect state sales taxes.

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