Refund of Sales and Use Taxes; Expedited Refunds

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. State Administrative Organization, Administration, and Enforcement
  5. Administration
  6. Refund of Sales and Use Taxes; Expedited Refunds

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    1. If a certificate or exemption determination letter issued by the commissioner certifying that the purchaser is entitled to purchase tangible personal property or taxable services without the payment of sales and use tax has not been obtained and used prior to purchasing such tangible personal property or taxable services, a refund of sales and use taxes shall be made to such purchaser without interest.
    2. For refunds of overpayments of state and local sales and use taxes made pursuant to a direct payment permit issued in accordance with Code Section 48-8-49.1, interest shall be paid on the overpaid amount of the taxes or fees pursuant to subsection (a) of Code Section 48-2-35, and subject to the provisions of Code Section 50-13A-19.1; provided, however, that interest shall begin to accrue on the overpaid amount of taxes or fees from the date an amended return or refund claim claiming a refund is filed.
  2. Any taxpayer who wishes to expedite the payment of a sales and use tax claim for refund may apply to the commissioner for such expedited refund; and as part of such application the taxpayer shall file a bond that is satisfactory to the commissioner as security for the repayment of such refund and any applicable tax, interest, penalties, fees, or costs in the event that the commissioner determines within the applicable statute of limitations that all or a portion of such refund was paid in error. The commissioner shall issue the refund within 30 days of the date of the posting of the approved bond. Any assessment of tax, interest, penalties, fees, or costs related to the payment of such refund claim shall be made within three years after the date that such refund was paid by the commissioner.
    1. As used in this subsection, the term:
      1. "Disregard" means any careless, reckless, or intentional disregard.
      2. "Excessive amount" means that portion of the claim for refund that exceeds the amount that is eligible for refund and for which there is no reasonable basis.
      3. "Frivolously filed" means a sales and use tax claim for refund in which the amount claimed exceeds the amount eligible for refund by at least 50 percent.
      4. "Negligence" includes any failure to make a reasonable attempt to comply with the provisions of this title.
      5. "Reasonable basis" means a position that is reasonably based on one or more of the following authorities: applicable provisions of this title and other statutory provisions; proposed and adopted regulations construing such statutes; court cases; official opinions of the Attorney General; and letter rulings, policy statements, informational bulletins, and other administrative pronouncements published by the commissioner. Notwithstanding the preceding list of authorities, an authority shall not continue to be an authority to the extent it is overruled or modified, implicitly or explicitly, by a body with the power to overrule or modify the earlier authority.
    2. Any taxpayer who frivolously files a sales and use tax claim for refund shall be subject to a penalty of 20 percent of the excessive amount. No penalty shall be assessed pursuant to this subsection against any portion of an excessive amount for which a refund is claimed in good faith and the filing of which was not due to negligence or disregard of the law. The determination of whether a taxpayer acted in good faith shall be made on a case-by-case basis, taking into account all pertinent facts and circumstances. Generally, the most important factor in such determination is the extent of the taxpayer's effort to assess the taxpayer's proper tax liability. Circumstances that may indicate good faith shall include an honest misunderstanding of fact or law that is reasonable in light of all the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with good faith.
    3. In addition to the penalty imposed under paragraph (2) of this subsection, when all or part of the excessive amount of the taxpayer's claim for refund is based on a position which is knowingly and willfully advanced in bad faith and is patently improper, such taxpayer shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $1,000.00.
  4. Except as provided for in this subsection, for the purposes of all claims for refund of sales and use taxes erroneously or illegally assessed and collected, the term "taxpayer" as used in Code Section 48-2-35 shall mean a dealer as defined in Code Section 48-8-2 that collected and remitted erroneous or illegal sales and use taxes to the commissioner. A person that has erroneously or illegally paid sales taxes to a dealer that collected and remitted such taxes to the commissioner may file a claim for refund either initially with the commissioner or, alternatively, elect to seek a refund from the dealer, by submitting a written request for refund to the dealer, and file a claim for refund with the commissioner after being unable to obtain a refund from such dealer. Such person shall also be considered a taxpayer for purposes of filing a claim for refund with the commissioner under Code Section 48-2-35, but only if such person:
    1. When filing a refund claim initially with the commissioner, provides the department with a notarized form prescribed by the commissioner and executed by the dealer affirming that the dealer:
      1. Has not claimed or will not claim a refund of the same tax included in the person's request for refund;
      2. Will provide to the person any information or documentation in the dealer's possession needed for submission to the department to support or prove the claim for refund;
      3. Has remitted to the state the taxes being sought for refund; and
      4. Has not taken or will not take a credit for taxes being sought for refund; or
      1. When filing a refund claim with the commissioner after being unable to obtain a refund from such dealer, such person provides a letter or other information as may be requested by the commissioner that either:
        1. The dealer refused or was unable to refund the erroneously or illegally assessed and collected taxes; or
        2. The dealer did not act upon the person's written request for refund of the erroneously or illegally assessed and collected taxes within 90 days from the date of such request for refund.
      2. Upon acceptance of such letter or information by the commissioner, the dealer shall be deemed to have assigned all rights to the refund to such person.

(Code 1981, §48-2-35.1, enacted by Ga. L. 2004, p. 630, § 1; Ga. L. 2009, p. 813, § 1/HB 441; Ga. L. 2009, p. 816, § 4/HB 485; Ga. L. 2013, p. 677, § 1/SB 137; Ga. L. 2020, p. 184, § 1-3/HB 846.)

The 2020 amendment, effective September 1, 2020, designated the existing provisions of subsection (a) as paragraph (a)(1); inserted "to such purchaser" near the end of paragraph (a)(1); and added paragraph (a)(2). See Editor's notes for applicability.

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2009, subsection (a) as enacted by Ga. L. 2009, p. 816, § 4/HB 485 was redesignated as subsection (d). Subsection (b) as designated by Ga. L. 2009, p. 816, § 4/HB 485 was identical to subsection (a) as designated by Ga. L. 2009, p. 813, § 1/HB 441, so the subsection (a) designation by Ga. L. 2009, p. 813, § 1/HB 441, was retained.

Editor's notes.

- Ga. L. 2004, p. 630, § 2, not codified by the General Assembly, provides that this Code section shall be applicable to any sales and use tax refund claim filed on or after July 1, 2004.

Ga. L. 2009, p. 816, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Improved Taxpayer Customer Service Act of 2009.'"

Ga. L. 2020, p. 184, § 4-1(b)/HB 846, not codified by the General Assembly, provides, in part, that: "The revisions to paragraph (2) of subsection (h) of Code Section 48-2-35 in Section 1-2 of this Act shall apply to notices for final refund amounts received by a political subdivision on or after September 1, 2020, and the interest rate provided in Section 1-3 of this Act shall apply to interest accruing on or after September 1, 2020."

Law reviews.

- For annual survey on administrative law, see 70 Mercer L. Rev. 1 (2018). For annual survey on state and local taxation: a two-year survey, see 71 Mercer L. Rev. 279 (2019).

JUDICIAL DECISIONS

Direct cause of action not permitted.

- Since the plain language of O.C.G.A. § 48-2-35.1(d) provides that a person may seek a refund of erroneously paid sales tax from a dealer who collected and remitted the tax to the commissioner or directly from the commissioner, but does not mention a direct cause of action against the dealer, the customers were not authorized to bring a direct action for a refund of allegedly over-collected sales tax against the power company. Ga. Power Co. v. Cazier, 321 Ga. App. 576, 740 S.E.2d 458 (2013).

Dealer not required to prepay potenially refundable taxes prior to seeking approval of refund from Department of Revenue.

- With regard to the period beginning by May 5, 2009 and ending on September 7, 2010, the court of appeals erred by affirming the dismissal of the dealer's case requesting a tax refund from the Georgia Department of Revenue because the statutes did not require a dealer to prepay potentially refundable taxes to consumers prior to seeking approval for a refund from the Department; and, although the Department's regulations required a dealer to pay any refund amount to the dealer's customers prior to the point that the dealer could acquire repayment of those funds from the Department, the stautes did not require a dealer to repay funds to the dealer's customers prior to filing a request for a refund or prior to the Department's decision of whether or not a refund was due. New Cingular Wireless PCS, LLC v. Ga. Dep't of Revenue, 303 Ga. 468, 813 S.E.2d 388 (2018).

Amendment granting standing to dealers was procedural and operated retroactively.

- Because a dealer had statutorily granted representational standing under amended O.C.G.A. § 48-2-35.1 to recover wrongfully paid sales taxes from the state on behalf of the dealer's customers, and the amendment was procedural and could be applied retroactively, the dealer had standing to file a claim for any taxes for periods before the statute was amended. New Cingular Wireless PCS, LLC v. Dep't of Revenue, 308 Ga. 729, 843 S.E.2d 431 (2020).

OPINIONS OF THE ATTORNEY GENERAL

Fingerprinting not required.

- An offense arising from a violation of O.C.G.A. § 48-2-35.1 does not, at this time, appear to be an offense for which fingerprinting is required; thus, this offense is not designated as one for which those charged are to be fingerprinted. 2010 Op. Att'y Gen. No. 2010-2.

RESEARCH REFERENCES

ALR.

- Construction and operation of statutory time limit for filing claim for state tax refund, 14 A.L.R.6th 119.


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