Georgia’s sales tax and keeping up with changes

Find out interesting insights with John Silverstein, VP of FP&A ,Extreme Reach

Moderated by Srishti, Financial Technology Consultant at Hyperbots

Don’t want to watch a video? Read the interview transcript below.

Srishti: Hello, everyone! My name is Rishi Rajre, and I’m a Fintech advisor here at Hyperbots. Today, I’m delighted to have John Silverstein as one of my guests. Thank you so much, John, for taking out the time today. It has been amazing working with you in the past, and hopefully, we can continue that from here. So for our viewers, a little bit about John. He is the VP of FP&A at Extreme Reach, and today we will be discussing Georgia’s sales tax rules and how companies can keep updated with all the tax changes. Whenever you’re ready, John, let’s get started.

John Silverstein: All right. Let’s get started. Happy to be here.

Srishti: Of course. Thank you. John, let’s start with a very basic question. Can you provide an overview of Georgia’s state and local sales tax structure?

John Silverstein: Sure, I can. In Georgia, there’s a base rate. Every state’s different, as we’ve talked about before, but there’s a base sales tax rate of 4% in Georgia. However, because that’s just the base, local jurisdictions are allowed to add up to 5% in additional taxes. The combined rate could be up to 9% in some areas. For instance, cities in Muskogee County have a combined sales tax of 9%, while some areas in Glenn County may be closer to 6% due to fewer additional levies. This layered approach allows for flexibility in funding local projects but can be more complex for businesses to keep on top of.

Srishti: I see that, and that perfectly makes sense. That brings me to the next question. Are there any specific exemptions from sales tax in Georgia that companies should typically be aware of?

John Silverstein: Yes, similar to other states, Georgia has some exemptions too. Groceries, for example, are exempt from the state’s portion of the tax, although they may still be subject to local tax. Prescription drugs are entirely exempt from both state and local sales tax. Medical equipment, such as prosthetics or other prescribed devices, is also exempt if prescribed by a licensed professional. This helps reduce the financial burden of essential goods but requires companies to correctly categorize and track such items.

Srishti: That is very interesting and definitely a good initiative by the Georgia government. How does Georgia handle sales tax on digital goods and services?

John Silverstein: In Georgia, digital goods are taxable, similar to physical goods. Downloadable music, eBooks, and streaming services are subject to the same sales tax as physical equivalents. If a company is selling digital content in Georgia, you need to account for sales tax, which can add complexity to operations across states with varying tax policies. For example, if your customer is in Georgia, you have to calculate the sales tax and are liable to collect it.

Srishti: I see, and that brings me to the next question. Can you share some examples of jurisdictions within Georgia that have notably high or low combined sales tax rates?

John Silverstein: The combined sales tax in Georgia can range widely. For example, in Muskogee County, it goes up to 9% due to the local options added on top of the 4% state rate. On the other hand, Glenn County’s combined rate can be around 6% or slightly higher. These local rate variations can impact pricing strategies and tax compliance for businesses operating in different counties.

Srishti: I see, understand. Now, if we compare Georgia to other states, how does it compare in terms of its sales tax rates and frequency of changes?

John Silverstein: That’s a good question. Georgia’s state sales tax is 4%, which is relatively low, ranking around the middle compared to other states. However, local taxes bring the combined average rate closer to 7.75%, which is slightly above the national average. The state has maintained a consistent 4% base rate for many years, but local jurisdictions occasionally adjust rates. For example, states like California see more frequent changes due to district and municipality taxes, especially in areas with voter-approved measures for local funding.

Srishti: That’s very interesting. How frequently do changes in sales tax rates occur, and are there any tools to stay updated?

John Silverstein: Georgia doesn’t adjust its state rate often because it’s slightly above the national average and hasn’t needed to increase for more revenue. However, companies turn to tools like the Sales Tax Handbook, Georgia’s Department of Revenue website, and automated tax management solutions to stay updated. These tools help businesses remain compliant and avoid non-compliance issues.

Srishti: That is definitely very helpful. Now, let’s talk about challenges. What challenges do companies face when managing sales tax for different goods and services in Georgia?

John Silverstein: One of the key challenges is compliance across diverse categories such as groceries, digital goods, and medical devices. Each has its own sales tax rules. For example, groceries are exempt from state tax, but prepared foods are fully taxable. This differentiation requires accurate categorization and tracking systems. Another challenge is keeping up with changes across counties, especially for companies with statewide operations. If you’re selling digital goods or operating across multiple counties, tax rates can vary significantly, making compliance even more complex.

Srishti: That’s really something to look out for. Given your experience, can you share how AI can help businesses stay updated on sales tax changes and improve tax compliance?

John Silverstein: AI is already playing a key role in helping companies remain compliant. It continuously scans legislative updates, rate changes, exemptions, and tax holidays. AI can alert companies to new exemptions or rate changes and ensure categories are accurately aligned with state rulings. Additionally, AI can integrate with ERP systems to automatically adjust calculations, reducing the risk of manual errors. For businesses operating in multiple states—or even multiple counties, as in Georgia—AI is invaluable for managing the complexity of tax compliance.

Srishti: That’s amazing. AI has really made strides in this area. With that, we come to the end of today’s discussion on Georgia sales tax and keeping up with all these changes. Again, thank you so much for joining us, John, and sharing your insights. Also, a big thanks to our viewers. I’ll see you around. Goodbye, and have a very good day.