Are college bookstore textbooks exempt from Georgia sales tax when the U.S. Department of Veterans Affairs pays the college directly?

Plain-English summary

The college's textbook sales were exempt because the U.S. Department of Veterans Affairs paid the college directly for books received by eligible students. Georgia's government-purchase exemption covered sales to the federal government when payment was made directly to the seller from appropriated government funds.

The payment path mattered. The ruling states that a student's own purchase would be taxable even if Veterans Affairs later reimbursed that student.

Common questions

Q: Does the exemption depend on who pays the bookstore?

A: Yes. The ruling applied when Veterans Affairs paid the college directly.

Q: What if the student pays first and receives reimbursement?

A: The ruling's footnote says that sale is taxable even if Veterans Affairs later reimburses the student.

Citations and references

• O.C.G.A. § 48-8-3(1) -- directly paid government purchases
• O.C.G.A. § 48-8-2(31) -- retail sale
• O.C.G.A. § 48-8-30 -- sales-tax imposition

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2016-06

Original ruling text

Date Issues: March 1, 2016
Georgia Letter Ruling: LR SUT-2016-06
Topic: Government Purchases

This letter is in response to your request for guidance on the application of Georgia’s sales and use tax to certain sales
of textbooks by [Redacted] College.
Facts Presented by Taxpayer
Each semester, the College invoices the Department of Veteran’s Affairs (“V.A.”) for textbooks received by eligible
students at the College bookstore. The College receives payment for these sales directly from the V.A.
Issue
Is the transaction described above subject to sales and use tax?
Analysis
Pursuant to Georgia law, sales tax is levied and imposed upon the retail purchase, retail sale, rental, storage, use, or
consumption of tangible personal property and on certain enumerated services that occur in this state. 1 All retail
purchases and sales of tangible personal property are taxable unless provided for otherwise. 2 Here, "retail sale" or a
"sale at retail" means a sale to a consumer or to any person for any purpose other than for resale of tangible personal
property or certain services.3 Because the transactions in this case do not involve the resale of tangible personal
property or services, the textbooks sold by the College constitute retail sales and are therefore subject to the tax unless
otherwise exempt.
An exemption from sales and use tax is provided for "[s]ales to the United States government, this state, any county
or municipality of this state, or any bona fide department of such governments when paid for directly to the seller by
warrant on appropriated government funds." O.C.G.A. § 48-8-3(1). The sale of the textbooks is exempt under
O.C.G.A. § 48-8-3(1) because the V.A. directly pays the College for the textbooks. 4
Ruling
The sale of textbooks is exempt when the V.A. directly pays the College for textbooks received by eligible students
at the College bookstore.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent statutory
or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is based may
subject similar future transactions to different tax treatment than that expressed in this ruling.

1

O.C.G.A. § 48-8-30.
O.C.G.A. §§ 48-8-1 and 48-8-30(b).
3
O.C.G.A. § 48-8-2(31).
4
Note that if a student pays the College for the textbooks, the sale is taxable even if the V.A. subsequently
reimburses the student.
2