Georgia shoppers have had a long respite from having to pay taxes on goods purchased online. Those days are over thanks to a change in the state’s tax code that went into effect this week.
Prior to this point, Internet shoppers on national sites like Amazon, Overstock and Zappos have been exempt from paying the 8 percent Georgia state sales tax since those retailers did not have brick-and-mortar locations in the state of Georgia.
Internet retailers with storefronts in Georgia like Home Depot, Walmart and Macy’s were required to collect sales tax.
With the move this week, Georgia becomes the 10th state to modify its tax code requiring online stores to collect sales tax on purchases.
If shoppers use sites that do not collect taxes, they will be hit with a “use tax” paid to the Georgia Department of Revenue at income tax time.
“The sales tax here in Georgia is 8%. So retailers should offer 8% or some kind of equal discount to entice shoppers to continue to shop online through their stores since they are not getting the benefit of saving on sales tax,” said Internet shopper Mae Armstrong.
“I would now think twice about buying on the Internet. Maybe if the merchants would subsidize the taxes by waiving the shipping fees that would maybe entice me a little bit more but I have to think about it now,” said Stacey Johnson, another Internet shopper.
Small business owners said that is exactly what they wanted to see happen – they want shoppers to think twice before walking into their stores, finding what they want and then going to the Internet and saving the 8% sales tax on their purchases.
The state of Georgia says the changes in the tax code will bring in about $18 million a year in sales tax revenue on Internet purchases.