Ga. Comp. R. & Regs. R. 560-12-5-.05 - Use Tax; Collection by Dealers
(1) Liability.
(a) The owner or user of tangible personal
property acquired by a purchase or lease made outside a Local Jurisdiction,
shall be liable for a use tax under the Local Option Tax upon the first
instance of use, storage, consumption, or distribution of the property within
the Local Jurisdiction unless the use is insubstantial.
(b) "Insubstantial use" within the meaning of
paragraph (1)(a) means any use occurring solely by virtue of movement of the
property through the Local Jurisdiction.
(c) The rules stated in the foregoing
paragraphs may be illustrated as follows:
1.
Example 1. Y Corporation is engaged in the construction business
and maintains its sole office outside the Local Jurisdiction. Y Corporation in
performing a contract within the Local Jurisdiction employs certain equipment
purchased by it outside the Local Jurisdiction, such as bulldozers, on the
construction site. Under paragraph (1)(a), the use of the equipment is
taxable.
2.
Example 2.
Same facts as in Example 1, except that Y Corporation also has a truck which
makes deliveries of construction materials from the corporation's office to the
construction site and then returns to the corporation's office. Under paragraph
(1)(a), use of the truck is not taxable. Use of the construction materials is
taxable.
3.
Example 3.
X Corporation maintains a warehouse in the Local Jurisdiction in which it
stores supplies, not held for resale but to be used in its operations outside
the Local Jurisdiction. Under paragraph (1)(a), the storage is
taxable.
4.
Example 4.
Z Corporation, a retail chain, maintains a warehouse for its retail goods
outside the Local Jurisdiction. Trucks based, serviced and routed from the
warehouse are used solely to make shipments from the warehouse to retail
outlets in the Local Jurisdiction. Under paragraph (1)(a), the use of the
trucks is not taxable. If, however, the truck is assigned to a particular
retail outlet in the Local Jurisdiction for the purpose of making retail
deliveries in the Local Jurisdiction from the retail outlet, even though
returning at the end of the day to the warehouse, the use is taxable.
5.
Example 5. Same facts as in
Example 4, except the warehouse is located in the Local Jurisdiction and the
vehicles are used to make shipments outside the Local Jurisdiction. The use is
taxable.
(2)
A retailer located outside the Local Jurisdiction is required to collect the
use tax under the Local Option Tax Act but only if:
(a) The retailer has a "substantial presence"
within the Local Jurisdiction, and;
(b) A retailer shall be deemed to have a
substantial presence within the Local Jurisdiction if the retailer:
1. Has a place of business located in the
Local Jurisdiction.
2. Solicits
sales on a regular and recurring basis within a Local Jurisdiction through
agents or representatives, or
3.
Delivers goods into the Local Jurisdiction on a regular and recurring basis,
or
4. Meets, with respect to the
Local Jurisdiction, any of the criteria established by Section 4 of the State
Sales and Use Tax Act as to "dealers".
(3) A lessor outside the Local Jurisdiction
with a substantial presence within such Local Jurisdiction is required to
collect a use tax under the Local Option Tax Act with respect to leases,
regardless of where the lease is executed or property transferred, where the
lessor acquires notice that the property will be used by the lessee principally
within the Local Jurisdiction.
Notes
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