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Tobacco Excise Tax Exemptions – Updated

UPDATED September 24, 2015 — IMPORTANT NEWS!

Acting upon advice from the GA DOR Auditors, S-Tax will no longer support or provide data input for Tobacco Excise Tax Exemptions.

We have been advised that virtually none of our clients will ever qualify for these exemptions and many audits have revealed that these exemptions are being taken even though the clients do not meet the qualifications for the exemption.   Auditors with the Georgia Department of Revenue have urged S-Tax to remove the facility by which our users are calculating these exemptions as a precaution against future penalties.

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Originally published bulletin below:

S-Tax Georgia does not provide tax or legal advice. However, we try very hard to keep up with everything happening that may impact you and point you in the right direction. In keeping with that policy, we have been working with a few of our customers, a couple of auditors at the Georgia DOR, and our state representatives on the issues regarding tobacco sales tax exemptions.

We have been told that S-Tax is correctly calculating the various tobacco excise tax exemptions. In the opinion of the auditors we’ve been working with, most retailers do not qualify for these exemptions. The issue is complex but the general rule for all sales taxes is simply that if you collect sales tax, you must remit it.

Therefore, since most retailers are calculating and collecting sales tax on the full retail purchase price of tobacco products, they don’t qualify for a sales tax exemption because they’ve already collected the tax. If the retailer is NOT collecting sales tax on the excise tax portion of the sale, then they have not collected sales tax on that amount and may be eligible to take the exemption BUT record keeping is VERY important! Once again, we remind you that your compliance with state law is your responsibility – we only provide the tool to make it easy to report to the state what you believe is correct.

The Audit Division of the Georgia DOR has been active in this area and will require that you prove you have qualified for any exemptions you have taken – that is their job.
S-Tax will continue to support the feature that allows you to easily calculate this exemption but that does not mean that you are entitled to the exemption.

It is entirely the responsibility of the tax preparer to be certain that all exemptions are qualified and legal.

We are working all our channels to get better clarity on this issue so that it can be easier to understand and we will pass that information along to you as it becomes available.

We will update this bulletin as more information comes to us that we can share.

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