Telecommunications Companies That Must Register with the Georgia Department of Revenue
Georgia law requires entities conducting business within the state to register for a business license, permit, and certain identification numbers specific to the State of Georgia. Additionally, they must file a sales and use tax registration to obtain a tax number. This applies to all sales regardless of how they are conducted, including out of state, or exempt.
Although telecommunications companies must comply with the sales tax rate on retail sales of goods and services in Georgia, the Internet Tax Freedom Act has certain provisions. These provisions include the prohibition of state or local taxes on internet charges.
This law defines internet access in a few ways.
- Services that enable users to connect to an internet-based search engine platform to access information and other services or content offered on that platform.
- Any telecommunications providing the services that allow individuals to access information, content, or other services through the platform, and services needed to make sure users can access the service.
The tax on wireless service in Georgia is usually set at the state and local levels. The taxes imposed fluctuate based on federal surcharges. This makes the rate imposed and the tax imposed higher.
Georgia is a member state of the Streamlined Sales Tax (STS), where they can remit taxes between states. Entities needing to use the Streamlined Sales Tax Agreement must complete the Streamlined Sales Tax Exemption Form (ST-5-SST). Each state has its own information. Payment is paid through the SST Centralized Registration System.
Direct payments are not permitted to purchase local telephone services. Initially, the entity must pay their sales and use tax for the first six months based on a calendar month basis. This covers what was listed on the application. If the taxes for a six-month period averages less than $200 per month, they can file quarterly. For sales that average less than $50 per month, they may file annually.
The Registration Process
- It is important for business entities to know that any corporate officer who has the authority to collect and remit tax must provide their personal social security numbers t the time of registration.
- Entities can register online via the Georgia Tax Center (GTC). This expedites the process, and entities should receive their tax account numbers by email within 15 minutes.
- The Certificate of Registration is issued to a dealer (entity), giving them the power to collect sales and use tax.
- The information on the certificate is also used when dealing with the Sales and Use Tax Forms. There is no fee associated with obtaining the certificate.
Renewal for Georgia Telecommunications Companies
No renewal is needed for sales and use tax registration.
As long as the entity does not have notable changes in structure or ownership, the certificate retains its validity. Instances, where the registration may have to be renewed, are when the business entity is closed down, moves to another county, or changes the business model.
The Department must be notified so they can issue a new certificate. Any renewals are charged a fee of $1.00. If an entity is found to be breaking any specific rules, the certificate can be revoked or suspended.
Telecom Tax Exemptions in Georgia
In the State of Georgia, instate calls are subject to sales tax, while interstate calls are classified as exempt.
How to File a Voluntary Disclosure Agreement in Georgia
The Georgia Department of Revenue has a Voluntary Disclosure Program (VDA) which assists taxpayers who have been underreporting or not reporting their state and local sales tax. These entities have an advantage because they have not been identified or contacted by the Department of Revenue for auditing of the tax imposed. This gives those entities an opportunity to come forth before that happens.
In most cases, entities that come forward are eligible to receive a waiver of their penalties.
- The entity is also able to limit the amount of time they must disclose the tax information and do not have to pay the total amount of previous taxes owed.
- The amount of time that is limited is known as the look-back period.
- In Georgia, this period is usually three years but can be altered based on the circumstances and history of the entity.
How Do Entities Know They are Eligible for the VDA?
There is a process the entity must follow, beginning with an application. Along with the application, a few stipulations must be followed.
- The entity must be compliant with all existing tax obligations in Georgia that will not fall under the VDA.
- The entity must also be void of contact with the Department of Revenue.
- If the entity has been contacted by the Department or one of their agents, they will be unable to get the VDA.
- Entities may be eligible to apply for multiple VDAs based on the tax type.
- They should all be listed on the application.
- Only the time periods outlined in the VDA can have their penalties removed as a condition of compliance.
- Interest still accrues on all amounts.
What is a Look-back Period?
The look-back period is set by the Department. This period requires the entity to pay any tax imposed. There are certain criteria set for determining the look-back period, including the information given in the application and the entity’s activities.
At a minimum, the look-back period is usually three years for every tax type. For withholding or sales and use taxes, this period is usually about thirty-six months. The Department can choose to extend this period as far back as they see fit to collect those taxes.
Conquer Georgia Telecom Tax Requirements Once and For All
For help registering, reporting, recording, or the management of Georgia’s Telecom Tax process for communication services, contact the team at FAStek.
Our experienced agents have worked with many telecommunications companies in Georgia, and have the expertise to help you conquer communications tax once and for all.