What Happens if Georgia Revokes Your Sales Tax Certificate?

What Happens if Georgia Revokes Your Sales Tax Certificate?

In Georgia, businesses that meet the legal definition of “dealer” must have a sales tax certificate. This includes those who sell or import for sale tangible property, maintain a place of business within the state, manufacture goods for retail sale, or solicit business in Georgia. This means that both in-state and out-of-state businesses may be required to have a Georgia sales tax certificate. 

However, having a sales tax certificate comes with certain responsibilities and obligations. Falling short of those obligations can lead to the revocation of your tax certificate, resulting in significant problems for your business. Per Georgia Code 48-8-62, the state of Georgia has the legal right to revoke a business’s certificate if the business breaks certain rules or regulations relating to sales tax. Learn more about how revocation happens, how you can protect your business, and how to prevent the loss of your business license.

Key Takeaways

• Most businesses operating in Georgia and many out-of-state businesses with a customer base in Georgia must have a sales tax certificate.

• Failure to file on time, pay on time, or otherwise follow tax laws may lead to the loss of your license.
• Be prepared to fix the issues that led to revocation if you want your license reinstated.
• In extreme cases, these issues may lead to criminal charges.

Common Causes of Sales Tax Certificate Revocation in Georgia

Sales and use tax is a trust fund tax in Georgia. This means that businesses are expected to collect it from customers and remit it to the state on their next scheduled payment date. Sales tax is actually paid by individuals to the state, but it’s collected by businesses. 

That means that sales tax is the property of the state, and businesses are not to use it for any other purpose. Because of this, the regulations around sales tax certificates are very strict. Some of the most common reasons businesses may lose their license include:

• Failure to file sales tax returns: Most business owners file their required sales tax returns electronically, as only those with very low sales tax balances can file on paper. Payments are typically due monthly, but some business owners are on quarterly or annual schedules. If a business consistently fails to file tax returns, the Department of Revenue may revoke its sales tax certificate.
• Failure to remit sales tax: Even if a business files its returns on time, it may still lose its certificate if it doesn’t actually remit its collected sales tax. There are also penalties for paying or filing sales tax late.
• False or fraudulent returns: Businesses that file returns with false or fraudulent information are often penalized with the loss of their sales tax certificate.
• Inaccurate registration information: Businesses have an obligation to keep their information up-to-date with the appropriate owner name, address, and contact information. If the Department is unable to contact an entity because its information is inaccurate, its certificate may be revoked.
• Chronic issues: The Department of Revenue is generally forgiving of one-time issues if business owners are compliant going forward. But if a business entity constantly files returns late, pays late or not at all, or submits returns with incomplete information, the DOR may revoke its certificate.

What to Expect After Your Certificate is Revoked

Under Georgia Code 48-8-62, the Department of Revenue must follow certain protocols to revoke a sales tax license. The state will first notify the person of its decision and provide a date and time for a hearing. 

That hearing is your chance to explain why your registration should not be revoked. If you want to show that your license should not be revoked successfully, be ready to prove that you have rectified whichever issues led to the initial notice.

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