Georgia Sales Tax Exemption
Churches, religious, charitable, civic and other nonprofit organizations are required to pay Georgia sales tax on all purchases of tangible personal property. When these organizations engage in selling tangible personal property at retail, they are required to collect sales tax and send it to the state.
However, Georgia provides limited exemptions from the payment of Georgia sales tax to a specific list of qualifying non-profit organizations. These include:
- Orphanages, adoption agencies and maternity homes
- In-patient hospitals, mental hospitals, nursing homes and hospices
- Non-profit private schools (grades 1-12)
- Groups that raise money for public libraries
- Organizations that provide services to the developmentally disabled
- Non-profit health centers
- Volunteer health clinics
- Blood banks
- Construction materials for qualifying private colleges, zoological institutions and aquariums
In addition, Georgia exempts certain non-profit organizations from the collection of Georgia sales tax. These include:
- Boy Scouts and Girl Scouts
- Licensed orphanages, adoption agencies, and maternity homes (Limited to 30 days in any one calendar year.)
- Parent Teacher Organizations
- Religious institutions (Limited to 30 days per fundraising activity in any calendar year.)
- Nonprofit groups whose primary activity is raising money for public libraries
- Public and private schools (grades K-12)
Sales Tax Exemption Extended to Food Banks
The list of of organization exempt from the payment of Georgia sales tax was indefinitely extended to food banks, according to a bill signed by the Governor on August 5, 2020.
A food bank qualifies for the exemption if the food bank is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. In addition, it must operate primarily for the purpose of providing hunger relief to low-income persons residing in Georgia.
Letter of Authorization
To make tax-exempt purchases, a qualified food bank must present a valid Letter of Authorization (“LOA”) to the seller. The seller must retain a copy of the LOA for audit purposes. Sellers are permitted to deliver food and food ingredients purchased with an LOA to any location operated by the food bank.
To receive a refund of tax paid on food or food ingredients, a food bank must hold an LOA that is valid for the period in which the purchase was made.
To obtain an LOA, food banks must apply online through the Georgia Tax Center. The application requires the following information for the prior year: Firstly, the applicant indicates the total number of clients served. Secondly, the applicant reports the total pounds of food donated by donors in the business of selling food. Thirdly, applicant indicates the total dollar amount of exempt purchases made by the food bank.
Taxpayers must apply for a new LOA annually. LOA’s expire on June 30 each year.
Please note that an LOA does not relieve food banks of the responsibility to remit sales tax on retail sales.
For more information about sales tax, non-profit organizations, IRS matters, or other tax and accounting matters, give our Atlanta office a call at 678-235-5460. If you would like to learn more about the tax and accounting services we provide, visit our Home Page!
Founded by Gary Massey, CPA, Massey and Company CPA is a boutique accounting firm located in Atlanta, Georgia. We provide tax preparation, tax planning, IRS representation and accounting services to individuals, small businesses and non-profits.