A few weeks ago, Annie mentioned that wineries shipping directly to Georgia that do not otherwise have a nexus in Georgia are not required to collect sales tax. We have had a number of questions about this issue, mostly related to the fact that different people have received different answers to this question in the past from Georgia. A few months ago, a representative from the Georgia Department of Revenue gave clear guidance on this in a pair of emails. Responding to the question of whether a winery with no wholesaler in Georgia has to collect sales tax, the representative wrote the following
The simple answer to your question is that the Special Order Shipping License is not conditioned on licencees paying sales tax to the State of Georgia. There is no general requirement saying that these licencees must collect and pay Georgia sales tax on sales. Whether a Special Order Shipping Licensee is subject to sales tax collection requirements must be analyzed on a case by case basis taking into account whether the licensee has a nexus with the State. Relevant questions in the analysis of nexus would include, but not be limited to, whether the licensee has a physical presence in the State such as having an office or having salespeople that are based in the State.
When asked for further clarification on whether the Special Order Shipping License creates a nexus in Georgia by a winery that does not have any presence in Georgia, the winery received the response below
A Special Order Shipping License alone, without any other conditions that would establish a nexus with Georgia, does not establish a nexus. The Georgia law that created the Special Order Shipping License was effective July 1, 2000, not in 2006. The information listed on the Georgia Department of Revenue site www.etax.dor.ga.gov/salestax/salestax_genlinfo.shtml is correct. Tangible personal property (in this case wine) purchased by a Georgia resident via the Internet and delivered to a Georgia address is subject to Georgia sales and use tax regardless of where the vendor is located. The Georgia resident would report and remit Use Tax on Form ST-3USE. The tax rate is based on the county where delivery takes place. You have asked if the consumer does not pay the tax themselves on the purchase of your wine, could this fall back on your winery? Lacking nexus, you would not be required to collect and remit the sales tax; nor would you be required to remit the consumer’s use tax. However, a company that charges and collects the Georgia sales tax must remit that tax to the State of Georgia.
To summarize, any winery can make onsite shipments into Georgia. Only wineries without a distributor in Georgia can receive a Special Order Shipping License and make offsite shipments (as well as onsite shipments). In both cases, the winery is not required to collect or pay sales tax.