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Georgia Sales and Use Tax: Construction Exemption for Private Colleges Enacted

Enacted Georgia legislation creates a temporary, refundable sales and use tax exemption for sales and uses of construction materials used for or in the construction of buildings at a private college. Provisions in the legislation pertaining to property tax are reported separately.

The sales and use tax exemption applies from July 1, 2015, through June 30, 2016, or until the refunded, aggregate state sales and use tax exceeds $350,000, whichever occurs first. Qualifying items are construction materials that will remain at the college after construction is completed, and all construction materials that become incorporated into the college’s real property structures. The exemption does not apply to items that remain in a contractor’s possession after the construction is completed.

The exemption applies to both state and local sales and use taxes paid. Refunds of sales and use taxes paid do not include interest. For purposes of the exemption, “private college” means a college in Georgia that is operated by an organization that is tax-exempt under Internal Revenue Code §501(c)(3) and that has between 1,000 and 3,000 enrolled students. The local sales and use taxes that can be refunded under the exemption are joint county and municipal sales and use taxes, homestead option sales and use taxes, county sales and use taxes, water and sewer projects and costs sales and use taxes, special district transportation sales and use taxes, and sales and use taxes imposed under the Metropolitan Atlanta Rapid Transit Authority Act of 1965. Finally, a contractor’s purchases can qualify for the exemption if the contractor pays the tax on the sale or use of qualifying items and the private college applies for the tax refund. H.B. 202, Laws 2015, effective January 1, 2016, and applicable as noted