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Georgia Department of Revenue regulation helps GCIA keep Allstate on the hook for reimbursing shops for sales tax charged to consumers for paint and materials.
The Georgia Collision Industry Association (GCIA) announced that it has been successful in getting Allstate to reverse its decision that it would no longer reimburse shops for the sales tax charged to consumers on paint and materials.
According to GCIA, a few weeks ago, Allstate communicated this change in policy to many GCIA members. GCIA then contacted the Georgia Department of Revenue, which cited Regulation 560-12-2-.08:
In general, regulation
[560-12-2-.08] provides that the sale of auto painting can be
structured as either 1) the sale of painting services, where the auto painter must pay tax on all tangible personal
property used to perform his service and will bill his customer for
painting services only; or 2) the retail sale of paint with painting
labor, where the auto body shop will purchase the paint
exempt for resale, and then bill his customer for the paint and
repair/painting labor, and then collect tax on the sale to the customer.
Of course, the labor charge will be exempt if itemized on the
customer’s invoice. Regulation 560-12-2-.08 supports both types of
transactions. The Department can only require that the tax be applied
correctly to the type of transaction chosen by the seller and buyer.
On Tuesday, September 25, 2012, Dan Risley, market manager (south) for Allstate, spoke to Howard Batchelor, executive director of GCIA, and told him that Allstate will pay sales tax on paint and materials.
GCIA is attempting to obtain an official written statement from Allstate. In addition, GCIA is working on guidelines for members as to how shops should pay, collect and remit the sales tax on paint and material items. Anyone wishing to assist in writing these guidelines should contact Howard Batchelor at (770) 367-9816 or [email protected].