By Stephanie Dodson Dougherty
Nonresident contractors and subcontractors who plan to perform work in Georgia must register their business with the Georgia Department of Revenue for tax purposes. This registration must be completed within six months before or after the start date for the Georgia work. Tax types for which nonresident contractors must register include Sales and Use, Prepaid Wireless 911 Charge, Payroll Withholding, International Fuel Tax, Alcohol Tax, Tobacco Tax, Motor Fuel Distributor, and Miscellaneous Withholding. New businesses registered in Georgia must file a tax return monthly for six months, after which the business may change their filing frequency.
Registration requires various forms depending on the type of work to be performed and the contract price to be paid. Basic required information for registration includes business type, legal name, contact information, an operational and monitored email address, FEIN, and other taxpayer information. Registration also requires the names and detailed information for company officers and responsible parties. Partnership and LLCs are required to register at least two officers. Each business registration costs a small processing fee.
NAICS codes are also required. The North American Industry Classification System (NAICS) is the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. Careful attention should be paid when determining the proper NAICS codes for one’s business. The most recent catalogue of codes is the official 2012 U.S. NAICS Manual, which includes definitions for each industry, background information, tables showing changes between 2007 and 2012, and a comprehensive index. This Manual is available online at http://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart=2012.
Business registration requires various Georgia Department of Revenue forms depending on the contract under which one plans to perform in Georgia. Nonresident contractors and subcontractors should be prepared to issue a Power of Attorney and bonds proportional to the contract price. For contracts over $250,000.00, optional supplemental bonds are available, under which a 2% retainage is required. Additional filing is required after project completion to release any retainage held.
Although some information about this registration process in available online, the Georgia Department of Revenue’s website and rules have not been updated to match the most recent statutory requirements. Additionally, each registration presents unique and often unforeseeable challenges. Therefore, it is advisable to consult an attorney whenever a business attempts to complete a new business registration in Georgia. If you have any questions about starting this process, please feel free to contact us.