Georgia has enacted a temporary and refundable exemption applying to the purchases of construction materials by qualifying museums. The exemption starts on July 1, 2018 and sunsets on December 31, 2020. This exemption applies to both state and local sales and use taxes. This exemption is refundable and has a cap on state and local sales and use tax to $960,000 that can be refunded.
To qualify as a museum, the facility must contain a main building with a permanent gallery of at least 57,000 square feet, three temporary galleries, a theater, a garage for restoration or storage of at least 26,500 square feet, and an outdoor pavilion. The museum must indirectly or directly be owned or operated by a nonprofit organization incorporated in Georgia and tax-exempt under §501(c)(3). The museum must primarily celebrate the diverse heritage of automobiles through changing exhibits while providing educational and engaging experiences for the benefit of Georgia citizens.
Contractors must pay sales and use tax at the time of purchase or first use in Georgia. The ultimate owner of the property can file the tax refund claim and the exemption does not apply to items that remain tangible personal property in a contractor’s possession after construction.
Every year by June 30th, eligible museums seeking to claim or renew the exemption must submit to the Department electronically (1) the total number of visitors admitted, (2) the average monthly number of full-time employees, and (3) the total amount of exempt purchases the museum made in the preceding calendar year.
If you have erroneously remitted taxes on qualifying construction materials and are a qualifying museum you may be entitled to tax refund. To apply for a tax refund with the Georgia Department of Revenue fill out the applicable ST-12 Claim for Refund. A qualified tax attorney can assist with the execution of the application and potential questions or concerns that may arise in the process.
Jeanette Moffa is an attorney who concentrates on state and local taxes at Moffa, Sutton, & Donnini, P.A. She is also an adjunct professor and assistant editor to the American Bar Association’s The Sales and Use Tax Deskbook. For more information please call us at 888-966-8216.