Georgia—Sales and Use Tax: Sale of Hemp Extract Dietary Supplement Discussed

Georgia: In a letter ruling, the Georgia Department of Revenue (department) discussed sales and use tax treatment of a retail seller’s sale of hemp extract dietary supplements. The taxpayer explained that it was rolling out five new dietary supplement products containing hemp extracts. The taxpayer sold those products through distributors, who paid a fee when they signed up to be a distributor, and were required to renew their status annually.

The taxpayer requested the department’s clarification on taxability of its products and charges for enrollment and renewal of the distributors.

The department clarified that the taxpayer’s sales of products that were properly labeled with a “Supplement Facts” box and topical balms were sales of tangible personal properties, that did not fall within an exemption, subject to state and local tax. However, the taxpayer’s charges for enrollment and renewal of distributor status were not taxable as Georgia sales and use tax is not applicable “the right to sell products”. Letter Ruling 2019-08, Georgia Department of Revenue, October 18, 2019, released August 2020

About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

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