TITLE 48 REVENUE AND TAXATION

Section 8. Sales and Use Taxes, 48-8-1 through 48-8-278.

ARTICLE 1 STATE SALES AND USE TAX

48-8-77. Sourcing; definitions; sales of advertising and promotional direct mail and other direct mail; sales of telecommunications service.

1. This Code section shall not be construed to impose sales and use tax on any tangible personal property or service which was not subject to such tax prior to January 1, 2011.
2. 1. The retail sale, excluding lease or rental, of a product shall be sourced as follows:
      1. When the product is received by the purchaser at a business location of the seller, the sale is sourced to that business location;
      2. When the product is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser, or the purchaser's donee, designated as such by the purchaser, occurs, including the location indicated by instructions for delivery to the purchaser or donee, known to the seller;
      3. When subparagraph (A) or (B) of this paragraph does not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith;
      4. When subparagraph (A), (B), or (C) of this paragraph does not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, when use of this address does not constitute bad faith;
      5. When subparagraph (A), (B), (C), or (D) of this paragraph does not apply, including the circumstance in which the seller is without sufficient information to apply the previous rules, then the location will be determined by the address from which tangible personal property was shipped, from which the digital good or the computer software delivered electronically was first available for transmission by the seller, or from which the service was provided, disregarding for these purposes any location that merely provided the digital transfer of the product sold.
   2. The lease or rental of tangible personal property, other than property identified in paragraph (3) or (4) of this subsection, shall be sourced as follows:
      1. For a lease or rental that requires recurring periodic payments, the first periodic payment is sourced the same as a retail sale in accordance with the provisions of paragraph (1) of this subsection. Periodic payments made subsequent to the first payment are sourced to the primary property location for each period covered by the payment. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location shall not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.
      2. For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of paragraph (1) of this subsection.
      3. This subsection does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
   3. The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment, as defined in paragraph (4) of this subsection, shall be sourced as follows:
      1. For a lease or rental that requires recurring periodic payments, each periodic payment is sourced to the primary property location. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. This location shall not be altered by intermittent use at different locations.
      2. For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of paragraph (1) of this subsection.
      3. This subsection shall not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
   4. The retail sale, including lease or rental, of transportation equipment shall be sourced the same as a retail sale in accordance with the provisions of paragraph (1) of this subsection, notwithstanding the exclusion of lease or rental in paragraph (1) of this subsection. As used in this paragraph, "transportation equipment" means any of the following:
      1. Locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce.
      2. Trucks and truck-tractors with a Gross Vehicle Weight Rating of 10,001 pounds or greater, trailers, semitrailers, or passenger buses that are:
         1. Registered through the International Registration Plan; and
         2. Operated under authority of a carrier authorized and certificated by the U.S. Department of Transportation or another federal authority to engage in the carriage of persons or property in interstate commerce.
      3. Aircraft that are operated by air carriers authorized and certificated by the U.S. Department of Transportation or another federal or a foreign authority to engage in the carriage of persons or property in interstate or foreign commerce.
      4. Containers designed for use on and component parts attached or secured on the items set forth in subparagraph (A), (B), or (C) of this paragraph.
3. For the purposes of paragraph (1) of subsection (b) of this Code section, the terms "receive" and "receipt" mean:
   1. Taking possession of tangible personal property;
   2. Making first use of services; or
   3. Taking possession or making first use of digital goods, whichever comes first.

      The terms "receive" and "receipt" shall not include possession by a shipping company on behalf of the purchaser.

4. 1. Notwithstanding subsection (b) of this Code section, the following provisions shall apply to sales of advertising and promotional direct mail:
      1. A purchaser of advertising and promotional direct mail may provide the seller with either:
         1. A direct pay permit;
         2. An agreement certificate of exemption claiming direct mail or other written statement approved, authorized, or accepted by the state; or
         3. Information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients;
      2. If the purchaser provides the permit, certificate, or statement referred to in division (i) or (ii) of subparagraph (A) of this paragraph, the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving advertising and promotional direct mail to which the permit, certificate, or statement applies. The purchaser shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered to the recipients and shall report and pay any applicable tax due;
      3. If the purchaser provides the seller information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients, the seller shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered and shall collect and remit the applicable tax. In the absence of bad faith, the seller is relieved of any further obligation to collect any additional tax on the sale of advertising and promotional direct mail where the seller has sourced the sale according to the delivery information provided by the purchaser; and
      4. If the purchaser does not provide the seller with any of the items listed in subparagraph (A) of this paragraph, the sale shall be sourced according to Section 310.A.5 of the Streamlined Sales and Use Tax Agreement. The state to which the advertising and promotional direct mail is delivered may disallow credit for tax paid on sales sourced under this paragraph.
   2. Notwithstanding subsection (b) of this Code section, the following provisions shall apply to sales of other direct mail:
      1. Except as otherwise provided in this paragraph, sales of other direct mail are sourced in accordance with subparagraph (b)(1)(C) of this Code section;
      2. A purchaser of other direct mail may provide the seller with either:
         1. A direct pay permit; or
         2. An agreement certificate of exemption claiming direct mail or other written statement approved, authorized, or accepted by the state; and
      3. If the purchaser provides the permit, certificate, or statement referred to in paragraph (1) or (2) of this subsection, the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the permit, certificate, or statement applies. Notwithstanding paragraph (1) of this subsection, the sale shall be sourced to the jurisdictions to which the other direct mail is to be delivered to the recipients and the purchaser shall report and pay applicable tax due.
   3. For purposes of this subsection, the term:
      1. "Advertising and promotional direct mail" means:
         1. Printed material that meets the definition of direct mail, under Code Section 48-8-2;
         2. The primary purpose of which is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. As used in this division, the term "product" means tangible personal property, a product transferred electronically, or a service.
      2. "Other direct mail" means any direct mail that is not advertising and promotional direct mail regardless of whether advertising and promotional direct mail is included in the same mailing. The term includes, but is not limited to:
         1. Transactional direct mail that contains personal information specific to the addressee including, but not limited to, invoices, bills, statements of account, and payroll advices;
         2. Any legally required mailings including, but not limited to, privacy notices, tax reports, and stockholder reports; and
         3. Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents including, but not limited to, newsletters and informational messages.

         Other direct mail does not include the development of billing information or the provision of any data processing service that is more than incidental.

   4. 1. 1. This paragraph shall apply to a transaction characterized under this chapter as the sale of services only if the service is an integral part of the production and distribution of printed material that meets the definition of direct mail.
         2. This paragraph shall not apply to any transaction that includes the development of billing information or the provision of any data processing service that is more than incidental regardless of whether advertising and promotional direct mail is included in the same mailing.
      2. If a transaction is a bundled transaction that includes advertising and promotional direct mail, this subsection shall apply only if the primary purpose of the transaction is the sale of products or services that meet the definition of advertising and promotional direct mail.
      3. Nothing in this paragraph shall limit any purchaser's:
         1. Obligation for sales or use tax to any state to which the direct mail is delivered;
         2. Right under local, state, federal, or constitutional law, to a credit for sales or use taxes legally due and paid to other jurisdictions; or
         3. Right to a refund of sales or use taxes overpaid to any jurisdiction.
      4. This subsection applies for purposes of uniformly sourcing direct mail transactions and does not otherwise impose requirements regarding the taxation of products that meet the definition of direct mail or to the application of sales for resale or other exemptions.
5. 1. Except for the defined telecommunications service in paragraph (3) of this subsection, the sale of telecommunications service sold on a call-by-call basis shall be sourced to:
      1. Each level of taxing jurisdiction where the call originates and terminates in that jurisdiction; or
      2. Each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
   2. Except for the defined telecommunications service in paragraph (3) of this subsection, a sale of telecommunications service sold on a basis other than a call-by-call basis shall be sourced to the customer's place of primary use.
   3. A sale of prepaid calling service or a sale of a prepaid wireless calling service is sourced in accordance with subsection (b) of this Code section; provided, however, that in the case of a sale of prepaid wireless calling service, the rule provided in subparagraph (b)(1)(E) of this Code section shall include as an option the location associated with the mobile telephone number.
   4. The sale of an ancillary service is sourced to the customer's place of primary use.

(Code 1981, §48-8-77, enacted by Ga. L. 2010, p. 662, § 18/HB 1221; Ga. L. 2011, p. 38, § 8/HB 168; Ga. L. 2013, p. 141, § 48/HB 79.)