Georgia sales tax guide for SaaS businesses

Is Saas taxable in Georgia?

As of January 1, 2024, Georgia taxes some digital goods and services, such as e-books and video games, though the list of taxable products excludes SaaS and streaming video.

When it comes to SaaS and other digital products, taxability can vary depending on the state, and laws are subject to frequent changes. It’s critical for any business with customers or employees in Georgia to monitor the latest sales tax developments and understand their sales tax obligations in the state.

How to determine if your product is taxable in Georgia

So, how do you determine whether your product is taxable in Georgia? It’s important to carefully review the specific features of your product and consult with a tax professional to ensure compliance with state and local tax laws.

You must also assess whether you have sales tax nexus in the state. Nexus refers to the connection between a business and a jurisdiction for tax purposes. If you meet the criteria established by Georgia’s sales tax nexus laws, and your product is taxable in the state, your business must collect and remit sales tax to the state.

Several factors can create a sales tax nexus:

• Physical nexus: Having a physical presence in Georgia, such as a brick-and-mortar store or office, or employees that reside in the state
• Economic nexus: Exceeding $100,000 in sales revenue or conducting 200 or more separate retail sales transactions in Georgia within a calendar year

Sales tax compliance in Georgia

If your product is subject to sales tax in Georgia and you have nexus in the state, you are required to comply with state tax laws. This includes steps such as:

• Registering for a Georgia Sales and Use Tax Certificate
• Collecting sales tax on taxable transactions
• Filing regular sales tax returns to report and remit collected taxes to the Georgia Department of Revenue

To ensure compliance, it’s crucial to maintain accurate records of your transactions, tax rates, and exemptions. Additionally, you may consider implementing tax compliance software to help automate the sales tax calculation and filing process.