Georgia's tax nexus rules determine when businesses must register for sales tax, income tax, and employment taxes in the state. Companies domiciled or incorporated in Georgia automatically have nexus and must register upon formation, while out-of-state businesses trigger registration requirements by crossing specific thresholds.
Understanding these thresholds is crucial because crossing them creates immediate compliance obligations and potential penalties for non-registration. Georgia uses different triggers for different tax types: economic thresholds for sales tax, factor-presence tests for income tax, and employee-based triggers for employment taxes. Each operates independently, so you could owe one type of tax without owing others.
Georgia has maintained its sales tax thresholds since 2020, when the state lowered the requirement from $250,000 to $100,000. The Georgia Department of Revenue updates income tax factor thresholds periodically based on economic factors.
Georgia establishes sales tax nexus through economic activity thresholds and physical presence triggers. Once either threshold is crossed, businesses must register and begin collecting Georgia sales tax immediately.
Georgia's economic nexus rule requires businesses with more than $100,000 in gross revenue from sales delivered into Georgia or more than 200 separate transactions in the current or previous calendar year to register and collect Georgia sales tax. This threshold applies to all sales, both taxable and exempt. shipped to Georgia customers, excluding only wholesale transactions with valid resale certificates.
The lookback period covers both the current and immediately preceding calendar year, meaning businesses must monitor their Georgia activity on a rolling basis. Once the threshold is exceeded, registration must occur within 30 days, with collection obligations beginning immediately.
Marketplace facilitators meeting the economic threshold must collect and remit tax on behalf of third-party sellers, relieving those sellers of separate collection obligations for marketplace-facilitated transactions. However, sellers making direct sales outside the marketplace must track their own thresholds independently.
Physical presence in Georgia creates an immediate sales tax nexus regardless of sales volume. Triggering activities include:
Even temporary employee presence can establish nexus, a sales representative spending time in Georgia, or remote employees working from Georgia, addresses both create a physical presence that requires immediate registration.
Sales tax registration occurs through the Georgia Tax Center, where businesses receive a state taxpayer identification number and select their filing frequency. Most companies file monthly returns due by the 20th of the following month, though smaller sellers may qualify for quarterly or annual filing.
Georgia's factor presence standard for corporate income tax creates nexus when out-of-state businesses exceed specific thresholds for property, payroll, or sales activity in the state.
For tax years beginning on or after January 1, 2025, corporations and LLCs electing corporate tax treatment have substantial nexus when they exceed any of these Georgia thresholds:
The 25% rule captures smaller businesses whose Georgia activity represents a significant portion of total operations, even if absolute dollar amounts fall below the threshold amounts. These thresholds are updated periodically based on economic factors.
Federal law protects some businesses from Georgia income tax even if they exceed factor-presence thresholds. Public Law 86-272 protection applies only to soliciting orders for tangible personal property that are approved and shipped from outside Georgia. The protection disappears when employees provide services, handle inventory, or perform activities beyond pure sales solicitation.
Once nexus is established, businesses must register through the Georgia Tax Center and file Form 600 (Corporate Income Tax) annually by the 15th day of the fourth month after year-end. Georgia imposes a 5.19% corporate income tax rate on apportioned income, with estimated quarterly payments required for larger tax liabilities.
Employment tax nexus in Georgia is established immediately upon hiring any employee who performs work physically within the state, creating withholding and unemployment insurance obligations.
Any employee working from a Georgia location, whether full-time staff, part-time workers, seasonal employees, or remote hires, establishes employment nexus immediately. This includes traveling employees who spend time in Georgia and remote workers whose services are performed from addresses within Georgia.
Employment nexus requires multiple registrations:
Georgia's nexus rules encompass modern business activities, including cloud-based software, digital products, and remote employee arrangements, which create tax obligations for out-of-state businesses.
Digital products with permanent access are generally taxable in Georgia. They are included in the $100,000 economic nexus threshold, but Software-as-a-Service offerings are usually not taxable for sales tax purposes. Remote sellers delivering digital products to Georgia customers must monitor their annual sales volume and transaction counts to determine registration requirements.
Remote employees working from Georgia addresses create both immediate employment tax nexus and potential income tax nexus if Georgia payroll exceeds $50,000 annually or represents 25% of total company payroll.
Third-party marketplace sales through registered facilitators are excluded from a seller's individual threshold calculation since the marketplace handles tax collection. However, direct sales outside marketplace platforms must be tracked separately for nexus purposes.
Drop-shipping arrangements with Georgia-based partners, or using third-party fulfillment services that involve inventory in Georgia, can establish a physical presence nexus requiring immediate registration regardless of sales volume.
Crossing Georgia's tax or employment nexus thresholds may also result in the need for foreign registration with the Secretary of State. Although Georgia doesn't have specific secretary of state nexus thresholds, states are more likely to consider a company as "doing business" if it's already paying taxes there. Understanding tax nexus thresholds helps identify when Secretary of State registration may also become necessary.
Once any Georgia nexus threshold is crossed, immediate registration and ongoing compliance become mandatory, with penalties and interest accruing from the date nexus was established.
Georgia requires detailed documentation supporting nexus determinations. This includes:
Georgia imposes significant penalties for late registration and non-compliance, with interest accruing from the date the tax was originally due. The Department of Revenue can assess back taxes for entire periods when nexus existed, but registration was missing.
The state offers voluntary disclosure programs that may limit lookback periods and reduce penalties for businesses that proactively address past exposure before being contacted by an auditor.
Discern provides comprehensive registered agent services and automated compliance tracking to ensure your Georgia obligations are met without administrative burden. Our platform handles foreign registrations and monitors compliance requirements across all jurisdictions where you operate.
Ready to streamline your Georgia compliance requirements? Book a demo with Discern today.
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