Florida & Georgia and Sales Tax – SaaS, Software & Other - Multi State Tax Solutions

Article Update: August 2024

Our blogs about SaaS and software issues get a lot of attention from our readers. So, we are refreshing some of our more popular states in our “compare and contrast” series. This month, we contrast of a couple of southeastern states – Florida and Georgia – specifically their treatment of technology items for sales tax purposes. There are several similarities between these states, but also, of course, some differences!

Florida SaaS Taxability:

SaaS is not subject to sales tax in Florida.
Cloud Computing Services are not subject to sales and use tax.
No specific statutes or regulations regarding cloud computing taxation.

Georgia SaaS Taxability:

SaaS is exempt from sales and use tax in Georgia.
Georgia does not impose sales and use tax on cloud-based or hosting services.

Software in Florida vs. Software in Georgia:

Florida: Prewritten software sold electronically is not taxable; custom software delivered electronically is not taxable.
Georgia: Prewritten and custom software delivered electronically is not taxable.

Digital Goods:

Florida: Digital products are not taxable; electronic information is not subject to sales or use tax.
Georgia: Digital products are taxable starting January 1, 2024, if the end user has permanent use and the transaction is not conditioned on continued payment.

Sales Tax Holidays:

Florida: Multiple sales tax holidays from May to September covering school supplies, computers, clothing, home appliances, and disaster preparedness items.
Georgia: No sales tax holidays.

Economy:

Florida is known for its tourism industry and diverse agricultural products, while Georgia boasts Atlanta as a global business hub and a rich agricultural sector in the southern part of the state.

Wait! Already know you need help with Florida or Georgia issues? Please reach out to us at info@milesconsultinggroup.com.

1. Florida SaaS Taxability

Software as a Service (SaaS) is subject to sales tax in several jurisdictions across the country. Approximately half of states do tax the SaaS revenue stream. As you’ll see below, both states are similar regarding their treatment of sales tax.

Cloud Computing Services are not subject to sales and use tax in Florida.

Florida has no statutes or regulations regarding the sales or use taxation of cloud computing, though there are technical advisements on the issue.

2. Georgia SaaS Taxability

SaaS is exempt from sales and use tax in Georgia.

The Georgia Department of Revenue ruled that Georgia does not impose sales and use tax on cloud-based services or hosting services.

3. Software in Florida vs. Software in Georgia

Florida does not impose sales and use tax on prewritten computer software sold electronically. Sales of canned software, electronically downloaded by the customer, are not subject to tax. Florida also does not impose sales and use tax on custom computer software delivered electronically.

The sale of prewritten computer software delivered electronically is not subject to tax in Georgia. Computer software delivered electronically is not a sale of tangible personal property and therefore is not subject to sales and use tax. The sale of custom computer software delivered electronically is not subject to tax in Georgia. Georgia does not impose sales and use tax upon the sale of “custom computer programs” regardless of the form in which the program is transferred to the customer.

4. Digital Goods

States vary in their treatment of electronically delivered goods including e-books, music, and streaming video. Some states consider all of these types of products to be taxable or not, while others call out specific taxability depending upon the product.

In Florida, digital products are not taxable. Any charge to view, access, download, or obtain information is not subject to sales or use tax so long as the information comes in an electronic format.

In Georgia, beginning January 1, 2024, digital products are taxable. Effective Jan. 1, 2024, specified digital products, other digital goods, and digital codes sold to an end user in the state are subject to state sales and use tax, provided that the end user receives the right of permanent use of such products, goods, or codes and the transaction is not conditioned upon continued payment by the end user.

5. Sales Tax Holidays

States often offer sales tax holidays during specific times of the year, during which certain items are sold tax-free. These vary greatly by state. Here’s how Florida and Georgia shake out.

Florida has a plethora of sales tax holidays which range from May to September. Some items that are sold tax-free during these times are school supplies, computers, clothing, home appliances, and disaster preparedness items. For more information on these sales tax holidays, click here.

Georgia does not have a sales tax holiday.

For more information on sales tax holidays, click here.

6. Economy

In Florida, tourism makes up one of the largest sectors of the state economy. Amusement parks, especially in the Greater Orlando area, make up a significant portion of tourism. The Walt Disney World Resort is the most visited vacation resort in the world. Many beach towns are popular tourist destinations, particularly during winter and spring break.

Agriculture is the second largest industry in Florida. Citrus fruit, especially oranges, are a major part of the economy, and Florida produces the majority of citrus fruit grown in the United States. Other products include sugarcane, tomatoes, and celery. The state is the largest producer of sweet corn and green beans in the U.S. The state is the largest producer of watermelons in the country. It also produces the most tomatoes, strawberries, and sugar.

Atlanta, the capital of Georgia, is a global city, an important node in the global economic system. It is also home to many large companies. There are 17 Fortune 500 companies and 26 Fortune 1000 companies with headquarters in Georgia, including Home Depot, UPS, Coca-Cola, TSYS, Delta Air Lines, Aflac, Southern Company, Anthem, Inc., and SunTrust Banks. Georgia is home to Hartsfield-Jackson Atlanta International Airport, one of the world’s busiest airports, measured by both aircraft traffic and passenger traffic.

Aside from the metropolitan centers in the state, farms paint the landscape of the southern part of the state. They produce peanuts, corn, and soybeans. Georgia’s agricultural outputs include poultry and eggs, pecans, peaches, cotton, peanuts, rye, cattle, hogs, dairy products, turfgrass, timber (particularly pine trees), tobacco, and vegetables.

Fun Facts

Florida Fun Facts

Port Miami is the world’s largest cruise ship port.
I-10, which spans 362 miles in Florida, traverses the panhandle, connecting Pensacola, Tallahassee, Lake City, and Jacksonville, with interchanges with I-75 in Lake City and I-95 in Jacksonville. It is the southernmost interstate in the United States terminating in Santa Monica with a total length of 2,460 miles.
Florida is home to Gatorland, the Alligator Capital of the World.
The Florida Everglades is the only place on the planet where crocodiles and alligators live together.
The highest point in Florida is Britton Hill on the Florida Panhandle and is only 345 feet above sea level.
Saint Augustine is the oldest European settlement in North America.
Key Largo is known as the Dive Capital of the World.
Fort Lauderdale is known as the Venice of America because the city has 185 miles of local waterways.

Georgia Fun Facts

Georgia is the largest state east of the Mississippi River in land area.
The main headquarters of The Weather Channel is in Atlanta.
Georgia is one of the leading states in frequency of tornadoes, though they are rarely stronger than F1.
With a coastline on the Atlantic Ocean and its proximity to the Gulf of Mexico, the state is vulnerable to hurricanes.
The port of Savannah is the fourth largest seaport in the United States, importing and exporting a total of 2.3 million TEUs per year. A twenty-foot equivalent unit (TEU) is a unit of measure used for capacity in container transportation, as in a container ship.
Georgia is in the top five blueberry producers in the United States.
In 1829, gold was discovered in the North Georgia Mountains.

We invite you to further explore Florida and Georgia in these earlier blogs we crafted over the years. Our team at Miles Consulting Group is always available to discuss the specifics of your situation, whether in Florida, Georgia, or other U.S. States, and help you navigate the complex tax structures arising from multistate operations. Contact us to help you achieve the best tax efficiencies.