TAX NEWS - August 2009

Rentals / Leases Tax FAQ - State of Georgia tax

Q. Are leases/rentals of tangible personal property taxable?

A. Yes, total gross proceeds are taxable.


Q. How does common ownership apply to tangible personal property and sales and use tax?

A. When an owner owns one or more companies and leases tangible personal property to a commonly owned company, Georgia sales tax is not due on the leased item if the company making the lease of the tangible personal property paid sales tax on the item at the time of purchase.


Q. Is the rental of a cabin subject to sales tax?

A. Yes. The rental of a cabin is considered accommodations and therefore subject to sales tax unless rented for 90 continuous days or more.


Q. Is the rental of office space subject to sales tax?

A. No. The rental of real property is not considered a retail sale.


Q. Is a charge for meeting rooms taxable?

A. An itemized charge for a meeting room is not subject to sales tax. If the charge is bundled together with other items, the tax would apply to the total invoice amount.


Q. Is the property tax charged on a lease taxable to the lessee?

A. Yes. It is considered a component of gross proceeds and therefore taxable.


Q. Is real property taxable?

A. No. Sales tax is imposed on tangible personal property, not real property.