Rule 560-12-7-.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 taxing district, shall be liable for a use tax under the Educational Local Option Tax upon the first instance of use, storage, consumption, or distribution of the property within the taxing district unless the use is insubstantial.(b) "Insubstantial use" within the meaning of paragraph (1)(a) means use occurring solely by virtue of movement of the property through the taxing district.(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 taxing district. Y Corporation, in performing a contract within the taxing district employs on the construction site certain equipment, such as bulldozers, purchased by it outside the taxing district. Under paragraph (1)(a), the use of equipment is taxable under the Educational Local Option Tax Act.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)(b), use of the truck is not taxable under the Educational Local Option Tax Act. Use of the construction materials are taxable.3.Example 3. X Corporation maintains a warehouse in the taxing district in which it stores supplies, not held for resale but to be used in its operations outside the taxing district. Under paragraph (1)(a), the storage is taxable under the Educational Local Option Tax Act.4.Example 4. Z Corporation, a retail chain, maintains a warehouse for its retail goods outside the taxing district. Trucks based, serviced and routed from the warehouse are used solely to make shipments from the warehouse to retail outlets in the taxing district. Under paragraph (1)(b), the use of the trucks is not taxable under the Educational Local Option Tax Act. If, however, the truck is assigned to a particular retail outlet in the taxing district for the purpose of making retail deliveries in the taxing district 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 that the warehouse is located in the taxing district and the vehicles are used to make shipments outside the taxing district. The use is taxable under the Educational Local Option Tax Act.(2) A retailer located outside the taxing district is required to collect the use tax under the Educational Local Option Tax Act but only if: (a) The retailer has a "substantial presence" within the taxing district, and;(b) A retailer shall be deemed to have a substantial presence within the taxing district if the retailer: 1. Has a place of business located in the taxing district; or2. Solicits sales on a regular and recurring basis within a taxing district through agents or representatives; or3. Delivers goods into the taxing district on a regular and recurring basis; or4. Meets, with respect to the taxing district, any of the criteria established by O.C.G.A. § 48-8-2(3)as to "dealers."(3) A lessor outside the taxing district with a substantial presence within such taxing district is required to collect a use tax under the Educational 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 taxing district.Ga. Comp. R. & Regs. R. 560-12-7-.05
O.C.G.A. Secs. 48-2-12, 48-8-141.
Original Rule entitled "Use Tax; Collection by Dealers" was adopted as ER. 560-12-7-0.11-.05. F. June 23, 1997, eff. July 1, 1997, to remain in effect for 120 days or until the effective date of a permanent Rule covering the same subject matter superseding this ER is adopted, as specified by the Agency.Amended: Permanent Rule of same title adopted. F. Nov. 3, 1997; eff. Nov. 23, 1997.