US: Georgia imposes sales tax on digital downloads

The state of Georgia’s expansion of its sales tax law to include many digital products will soon go into effect.

Timeline

The expanded scope of the sales tax law will go into effect on January 1, 2024.

Impact

The state of Georgia’s expansion of its sales tax law to include many digital products will go into effect on January 1, 2024. The scope of this expansion covers the sale of a “specified digital product, other digital good, or digital code sold to an end user” provided that the end user receives a right of permanent use. This includes but is not limited to the sale of digital audio visual works, digital audio works, digital books, video games, as well as digital artwork, photographs, newspapers, and greeting cards.

Notably, only items sold with the right of permanent use will be taxable, meaning that digital products that are only accessible for a limited time or require continued payment to access should not be considered taxable under the new rules.

Any business making sales of these digital products to customers in Georgia and who has nexus in the state should begin charging Georgia sales tax on these sales from January 1, 2024.