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Monday June 1st, 2020 9:13AM

Third-party sellers to pay Georgia sales tax under new law

By The Associated Press

ATLANTA (AP) — Third-party sellers using online marketplaces such as Amazon, eBay and Airbnb will have to pay sales taxes to the state of Georgia under a bill the governor signed into law Thursday.

State officials estimate that House Bill 276, which takes effect April 1, is expected to bring in $78 million for the state and $65 million for local governments in the first year. Other estimates have suggested much greater revenue gains.

Lawmakers reached an agreement on the measure in the opening days of this year's legislative session, eager for it to bolster revenues in the current budget year that ends June 30. It will also increase tax revenues in the 2021 budget that lawmakers are now writing.

The measure is aimed at collecting sales taxes from third-party sellers whose commerce moves through online marketplaces. For example, Amazon lets third parties use its platform to sell goods. Those sales may not be taxed now, but will be under the bill.

More revenue would be welcome in the wake of midyear budget cuts ordered by Gov. Brian Kemp and his calls for another income tax cut and teacher pay raise. Georgia's tax collections have lagged badly since the Republican-led legislature cut the state's top income tax rate last year.

Lawmakers had projected $800 million more in revenue for this year's spending plan, but revenue has barely risen in the past six months.

Despite the extra revenue expected from the new law, legislators may decide not to count on it. Kelly Farr, director of Kemp's Office of Planning and Budget, warned last week against relying on estimates. On Wednesday, Senate Majority Leader Mike Dugan, a Republican from Carrollton, told reporters that it could be hard to estimate revenues.

“We have a wide band of what those revenue numbers will look like,” Dugan said. “So, which end do you go with? The low end or the high end?”

The new law doesn't include an exemption for ride-hailing services such as Uber and Lyft, although earlier versions of the bill proposed it. Uber is disputing whether its sales are taxable in Georgia. Lawmakers have said they're likely to consider a separate bill later in the session setting a flat tax rate of 50 cents a ride.

___

Follow Jeff Amy on Twitter at http://twitter.com/jeffamy

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Online Congress News, AP Business, AP Online - Georgia News, AP Online Headlines - Georgia News, AP Business - Economy
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