Georgia Tax - Recovery of Georgia sales/use tax erroneously paid on 2009 purchases of qualifying manufacturing machinery and equipment

In Informational Bulletin SUT 2009-10-28, the Georgia Department of Revenue announced a limited opportunity permitting taxpayers to recover Georgia sales and use taxes erroneously paid on qualifying purchases of manufacturing machinery or equipment during 2009. Under the terms of the Bulletin, taxpayers may recover the erroneously paid tax by taking deductions on specified Georgia sales and use tax returns.


Overview

In Informational Bulletin SUT 2009-10-28 (the "Bulletin"), the Georgia Department of Revenue ("DOR") announced a limited opportunity permitting taxpayers to recover Georgia sales and use taxes erroneously paid on qualifying purchases of manufacturing machinery or equipment during 2009. Under the terms of the Bulletin, taxpayers may recover the erroneously paid tax by taking deductions on specified Georgia sales and use tax returns. In this Tax Alert we summarize the requirements for taking these deductions.


The DOR Announcement

Under the terms of the Bulletin, the deduction "may include both use taxes accrued and remitted, and sales taxes paid to a vendor in error, on eligible purchase of manufacturing machinery and equipment" during 2009. However, the deduction amount does not include interest on the erroneously paid tax.4 The deduction must be calculated and first taken on timely filed sales and use tax returns for any of the monthly periods of October, November, and December 2009. Thus, deductions may not be initially taken on any return filed subsequent to the December 2009 return. The deduction taken on a return may not reduce the tax amount due below zero. However, a taxpayer may carry forward to its 2010 returns any unused deductions until such deductions are fully utilized.

Taxpayers that seek to recover the erroneously paid tax by taking deductions in accordance with the Bulletin are not required to file a Form ST-12A (Waiver of Vendor's Right to Refund). However, taxpayers that forego this opportunity and, instead, seek recovery under the normal refund process must submit to the DOR a Form ST-12A for each vendor to whom they paid sales tax on an eligible purchase, a Form ST-12 (Claim for Refund), and all applicable supporting documentation.