Use Tax vs. Sales Tax – What’s the Difference?

Understanding the difference between Use Tax and Sales Tax is important for businesses based in Rockdale County, Georgia. Here’s a clear explanation to help you manage these taxes effectively:

1. What is Sales Tax?

• Sales tax is collected by businesses on the retail sale of tangible personal property or taxable services within Georgia.
• In Rockdale County, the combined state and local sales tax rate is currently 7%.
• Businesses must collect and remit this tax to the Georgia Department of Revenue.

2. What is Use Tax?

• Use tax applies when you purchase taxable goods from outside Georgia (such as online or out-of-state vendors) for use within Rockdale County, and no Georgia sales tax was charged at purchase.
• The use tax rate matches the local sales tax rate (7% in Rockdale County).
• Businesses are responsible for reporting and remitting use tax directly to the Georgia Department of Revenue.

3. Key Differences Between Sales Tax and Use Tax

• Who Collects It?
  • Sales Tax: Collected by sellers within Georgia.
  • Use Tax: Paid directly by the purchaser to Georgia if the seller doesn’t charge Georgia sales tax.
• When is it Paid?
  • Sales Tax: Paid at the time of purchase.
  • Use Tax: Reported and paid later, typically on your Georgia Sales and Use Tax return.
• Purpose: Use tax helps prevent unfair advantages to out-of-state businesses and ensures tax fairness among Georgia businesses.

4. Reporting and Paying Use Tax in Georgia

• Businesses report and pay use tax online through the Georgia Tax Center.
• Include use tax payments with your regular sales tax returns, filed monthly or quarterly.
• Report use tax even if you had no sales during the reporting period.
• File here: Georgia Tax Center

5. Helpful Contacts and Resources

Georgia Department of Revenue – Sales & Use Tax Division
Phone: (877) 423-6711
Website: Georgia Department of Revenue – Sales & Use Tax

Rockdale County Business Resource Hub
Your local resource providing essential tax guidance and business information tailored specifically to businesses operating in Rockdale County.

Understanding these differences ensures your Rockdale County business stays compliant and avoids potential penalties related to sales and use taxes.