In this Article, we will give you a snapshot of the legal compliance requirement and associated fees required to register Limited Liability Company (LLC) in Georgia and most importantly, maintain the status of an LLC, especially as a small business e-commerce start up.
In the United States, LLCs are registered on the state level, therefore you can register an LLC in any of the 50 States in the United States, including Washington DC.
You can check out the best states in the US to register your LLC as a small business e-commerce start-up, if you want to pay less State fees, less State imposed taxes and do less periodic paperwork in order to maintain your LLC.
In this Article, our focus is on Georgia LLC. What cost should you expect to pay when you register an Georgia LLC? What periodic filings requirements are imposed on Georgia LLCs? What State taxes are levied on e-commerce small business start ups in Georgia and what are the tax rates? What business permits are required to be obtained by e-commerce businesses in Georgia, what’s the cost of these permits and are there any renewal requirements?
This Article presents you a snapshot, so you know what fees and legal compliance requirements to expect if you Georgia to register an LLC for your e-commerce small business start up in Georgia, operate with the required licenses and maintain your LLC status.
Business registration and compliance on Georgia
- LLC Registration cost; the state fee for registering an LLC in Georgia is $100. You can register your Georgia LLC with Bizee for a service charge of $0 + the State fee.
- LLC registration Publishing requirement; No, LLCs in Alabama are not required to publish their registration in a local newspaper.
- Has the Option to register as an Anonymous LLC; LLCs in Alabama have the option to register as an anonymous LLC. This means that the LLC can be registered without putting the names and personal details of the LLC Owners on public record of the State.
- DBA requirement; DBA is required if your LLC is operating under a different name than your LLC registered name. Cost of registration varies by county, the length of approval is indefinite. There is a requirement to publish the registered DBA in a local newspaper at least once per week for two consecutive weeks. You can register a DBA in Georgia online. (Georgia DBA registration online varies by County) or outsource the registration of your Alabama DBA (if needed) to Bizee.
- Annual report filing requirement; yes. The cost of filing an annual report for a Georgia LLC is $50 for online filling; $60 for paper filling.
You can file the Georgia annual returns yourself, you’ll need to visit the Georgia Corporations Division Annual Registration or you can outsource the filling of your annual returns to Bizee for a $99 service charge.
Annual Franchise tax filing and compliance in Georgia
- State Franchise tax requirement; LLCs Corporations in Georgia are generally not subject to the net worth tax (franchise tax). except if the LLC has elected to be taxed as an S or C-Corporation.
Georgia’s net worth tax is applied at flat dollar amounts, determined by a corporation’s apportioned net worth. This tax spans a range from $125 to $5,000.
Corporations with a net worth of $100,000 or less in Georgia are exempt from the net worth tax but are still required to file a return.
You can learn more about Georgia net worth tax (Franchise tax).
Annual State income tax filing and compliance in Georgia
- State income tax requirement; Georgia has a progressive individual income tax, with rates ranging from 1.00 percent to 5.75 percent. Georgia corporate income tax rate is 5.75 percent.
- Who files State income tax; LLCs by default are passed through entities meaning that tax obligation passes through to the individuals who own the LLC. Therefore an LLC with a default tax status pays the individual state income tax. Interestingly, if the individuals behind the LLC are not resident in the state and do not have state source income (a dependent agent in the state), then they are not required to pay “individual State income tax”.
If the LLC owners are resident in the State or have State source income (a dependent agent in the state), then the LLC Owners are required to pay “individual State income tax”.
If the LLC has elected to be taxed as a corporation (C-corp), then the LLC is required to pay “Corporate State income tax”.
- How to file state income tax; You can file your Georgia State income tax by yourself. You will need to visit the State website. Alternatively, we recommend using the Service of a Certified Public Accountant (CPA), through H&R Block to file your state income tax.
Periodic Sales tax filing and compliance in Georgia.
- Sales tax requirement; Georgia has a 4.00 percent state sales tax rate, a maximum local sales tax rate of 5 percent, and an average combined state and local sales tax rate of 7.4 percent.
- Sales tax nexus; Sales tax nexus is the state-defined threshold between a Seller and a state, which when reached makes it obligatory for the Seller to register for a Seller permit in the state, charge sales tax to customers in the state and remit the sales tax to the State Government.
Generally, there is the “physical sales tax nexus” and “economic sales tax nexus”.
Physical sales tax nexus is reached when the Seller had physical presence in the state (i.e have an office address, a warehouse etc).
In most States, “economic sales tax nexus” is reached when a Seller makes up to 200 transactions or $100,000 in sales in a State.
It’s important to note that, when you register your LLC in the State of Georgia (which generally requires that you have a registered business address in Georgia), you automatically meet the physical sales tax nexus and will be required to obtain a Sales tax permit in Georgia, charge applicable sales tax rates to customers in Georgia and remit sales tax to the Georgia State Government.
- Sales tax permit; It costs $0 to register for a Georgia Georgia sales and use tax number Georgia sales tax permit remains in effect as long as the business exists with no changes in Business ownership.
Reseller/Resale Certificate; Businesses who purchase products from their suppliers for the purpose of reselling those products to their customers can make sales tax free purchases from their suppliers if they have a resale certificate.
This means that Resale businesses can get cheaper product prices from their suppliers (that is product prices without sales tax included) which can help these Businesses have a higher profit margin and/or maintain competitive selling prices to their Customers.
Generally, suppliers will charge the sales tax rate applicable in the State where the product is to be delivered unless the business presents to the supplier a Resale Certificate (also called a Reseller Certificate).
The Resale certificate must be valid and acceptable in the state where the product is to be delivered.
Businesses can present any of the below listed Resale certificates to suppliers if they want to make sales tax free purchases for product delivery to a Georgia address.
- MTC Uniform Sales & Use Tax Resale Certificate (The MTC form serves as a uniform resale certificate for various states, streamlining the process by replacing the need for multiple state-specific resale forms when dealing with your supplier.)
- SST Certificate of Exemption (The SST form also serves as a uniform resale certificate for various states, streamlining the process by replacing the need for multiple state-specific resale forms when dealing with your supplier.)
Note; Note; Georgia accepts the use of out-of-State Seller ID.
This means that Resale Businesses seeking sales-tax-free purchases in Georgia can use an out-of-state seller ID (i.e a seller ID issued by another US state or their home state) to fill-out the MTC uniform resale certificate or SST Certificate of Exemption form. They can indicate an out-of-state seller ID as their Georgia Seller ID on the MTC form or SST form.
In Georgia, A blanket Resale certificate (This means that the resale certificate is kept on file by the Supplier to cover multiple purchase transactions between a specific Supplier and Reseller) does not expire unless it is revoked in writing.
Conclusion
This Article shows you a snapshot of the legal fillings and compliance requirements for LLCs that are registered in Georgia, specifically for LLCs that want to carry on the business of selling and especially for small e-commerce start up LLCs that are registered in Georgia.
If you are wondering what might be the best State in the United States to register your small business (especially if you are a reseller or an e-commerce business), we have written this Article, where we go over our most recommended states for registering a business in the United States, if you want to pay less LLC filing and legal compliance fees, if you want less state imposed taxes and if you want to do less periodic legal paperwork required to maintain your LLC status.
