Sales Tax Rate

• As of April 2011, the Georgia state sales tax rate is 4 percent. Certain jurisdictions may charge additional sales tax. Atlanta, the state's largest city, charges an additional 1 percent sales or use tax on any item sold or used within the city limits, except the sale of motor vehicles. In Georgia, cities, counties, school districts, and state-designated Special Purpose Districts may charge additional sales taxes, with some jurisdictions charging as much as 8 percent in local and state tax. Consumers and those doing business in the state must keep abreast of this complex taxation system, as sales tax amounts and taxing districts are subject to change.
  
  

Taxable Items

• Tangible personal property is subject to the retail sales tax, as are any rentals or leases of tangible personal property or home improvement services. Equipment sold to medical providers, including doctors, dentists or optometrists, is taxable, as is equipment sold to veterinarians.
  
  

Tax-Exempt Items

• Some items and services are not subject to Georgia sales tax, and certain entities within the state do not pay the tax. These entities include federal, state or local government agencies, state hospital or housing authorities, 501(c)3 nonprofit organizations or the University of Georgia system. Repair services are exempt from charging sales tax. Food sold in supermarkets for home consumption is generally tax-exempt, but food served in restaurants or from vending machines is not. Prescription medications are free from state sales tax. Many agricultural products are tax-exempt, including livestock sold for breeding, sod and agricultural machinery. Those machines used in manufacturing are usually tax-exempt. Buy a Georgia lottery ticket -- you may get lucky, but you don't pay tax on the ticket.
  
  

Use Tax

• Similar to the sales tax and taxed at the same rate, the use tax is charged on tangible personal property bought for consumption, use or storage in Georgia in out-of-state situations where no state sales tax has been paid. These include items purchased over the Internet or by telephone or mail order, or tangible personal property bought in another state and delivered ti Georgia. The purchaser pays the use tax directly to the state.