Sales and Use Tax for Contractors Examples

Contractors report their sales and use tax on the ST-3 sales and use tax return. An ST-3 is due for each filing period even if no tax is due.

Materials purchased in a 6% GA jurisdiction and sales tax paid at time of purchase

• Materials used in a 6% GA jurisdiction, No use tax due, zero use tax reported on the ST-3

Materials purchased and no sales tax paid

• Materials used in a 6% jurisdiction, Contractor must accrue 6% use tax, Contractor reports the 6% use tax on his ST-3 

Materials purchased in a 6% jurisdiction and sales tax paid at the time of purchase

• Material used in an 8% jurisdiction, contractor must accrue 2% use tax, Contractor repots the 2% use tax on his ST-3 return. When a contractor pays sales tax to another state, Georgia will grant reciprocal credit for a legally imposed taxes paid to the other state. Credit is granted “like tax against like tax”. O.C.G.A 48-8-30
• “Like tax against like tax” means state tax credited against state tax and local tax credited against local tax.

Materials purchased in TN with a 6% state tax paid, 1% local tax paid

• Materials used in a 6%(4% state,2% local) GA jurisdiction, Contractor will not owe any of the 4% GA state sales tax, contractor will owe an additional 1% local use tax, contractor reports 1% local use tax on his ST-3 

Materials purchased materials and paid 8% sales tax (4% state and 4% local)

• Contractor uses materials in a 6% jurisdiction, contractor reports “0” tax due on his ST-3, and there is no credit (or refund) for the 2% “overpayment”