Georgia LLC Taxes
Having a solid understanding of the tax obligations that apply to your Georgia Limited Liability Company (LLC) at a local, state, and federal level is essential to maintaining compliance.
In this article we’ll explore the various Georgia LLC taxes your business will be responsible to pay and offer a detailed walkthrough on the process of correctly filing them.
Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes.
How Is an LLC Taxed in Georgia?
Taxation in Georgia isn’t applied in the same way to all LLCs – instead, it varies depending on a number of factors, such as an LLC’s nature, locality, and tax election.
While LLCs typically benefit from pass-through taxation by default, they can elect to be taxed as one of the following:
- C Corporations: The LLC is treated as a separate entity to its owners and must pay corporate income tax on its total profit while the owners also pay personal income taxes on any distributions they take.
- S Corporations: In return for paying owners a “reasonable salary,” the LLC’s remaining profits are distributed among members without a need to pay FICA or federal self-employment tax on them.
The following sections go into the various tax responsibilities of your LLC at local, state, and federal levels in Georgia to help you ensure your LLC navigates them effectively.
Georgia Local Taxes
The local laws and tax regulations differ greatly between different localities in Georgia, where there are currently a number of unique taxes in place at a local level.
Below is a list of tax types that your city or county may impose:
Sales and Use Taxes
If you’re selling goods or services in Georgia or selling to Georgia customers, the sales/use tax rate you’ll need to collect can vary depending on the specific locality of your LLC. This is because local jurisdictions levy an additional rate, which applies on top of the statewide rate of 4% – leading to total rates of up to 8.9% in some counties.
In Georgia, local entities can also impose sales and use taxes at different rates for the following goods:
- Energy sold to manufacturers
- Jet fuel
- Motor fuel for highway use
- Carrier locomotive fuel
Note: Since sales and use tax rates are updated each quarter, check with the Georgia Department of Revenue website to find the most up-to-date rates in your area.
In addition to the taxes explored above, many local jurisdictions in Georgia impose their own unique taxes that are specific to the local area. Some examples of these miscellaneous taxes are present in:
- Atlanta: Businesses based in this city must pay a license tax based on their estimated gross revenue, number of employees, and business type. The tax comprises an annual total your LLC must pay that is equal to the sum of a standard deduction from the business’s revenue, a per-employee fee (with the first employee exempt), and a flat fee.
- Savannah: In this city, lodging tax is applied at a flat rate of 8% on short-term rentals, hotels, and other lodging establishments. The revenue from this tax is then allocated to various city projects and tourism-related initiatives.
The examples above highlight just a few of the city-specific taxes that businesses in Georgia might encounter, but tax obligations can vary significantly depending on the location of your LLC. Consult with your local government office to ensure you’re fully aware of and compliant with all relevant local tax requirements.
Recommended Service: Schedule a free consultation with 1-800Accountant to ensure your business remains legally compliant.
Georgia State Taxes
Every state has its own regulations and rules that dictate how it taxes individuals and businesses. Below is a list of the most relevant state-level taxes for LLCs in Georgia.
This group of taxes refers to the charges imposed by the state on the earnings of individuals and entities operating within Georgia. As an LLC based in this state, there are three key types of state income tax to be aware of:
- Personal Income Tax: This is a gradual tax applied at a rate that ranges from 1% to 5.75% depending on your LLC’s income level. You can use the Georgia Tax Rate Schedule within this financial year’s Individual Income Tax Booklet to find out the rate at which you’ll pay this tax.
- Corporate Income Tax: In Georgia, this tax is levied at a flat rate of 5.75% on the adjusted net income of corporations and LLCs structured as C corps based within the state. If your LLC is organized as an S corp, each of the shareholders will pay this tax instead of the business itself.
- Partnership Tax: Partnerships, or LLCs treated as such, that own property, conduct business, or earn income from sources within Georgia are subject to a 5.75% tax on their total net income. While this tax is paid by individual partners by default, partnerships also have the option to elect to pay it at an entity level.
Understanding the nuances of your state income taxes is crucial for individuals and corporations as they form a central part of your statewide tax responsibilities.
Net Worth Tax
In Georgia, any corporation (or LLC taxed as one) with a net worth exceeding $100,000 is required to pay net worth tax. This is a tax on the total value of the business’s net assets, levied as a cost for the privilege of conducting business within the state.
The amount a corporation will need to pay is based on its net worth, with the maximum tax set at $5,000 for businesses with a net worth that’s greater than $22 million. For new corporations in Georgia, filing your initial net worth tax return is a crucial step that must be completed by the 15th day of the third month after qualification in the state.
Note: While corporations with a net worth of $100,000 or less are exempt from paying the tax, they will still be required to file an annual return using Tax Form 600.
In Georgia, sales and use tax is levied at a flat rate of 4% on the price of all tangible goods and services sold across the state. It’s worth noting that, depending on the local jurisdiction your LLC is based in, your total sales and use tax can vary up to a maximum of 8.9%.
Most physical goods (i.e., personal property such as clothes, electronics, and furniture) are considered taxable for the sake of sales and use tax – though there are some exemptions, including:
- Healthcare Products
- Food and Food Ingredients
- Museum Sales
- Religious Sales
Sales tax returns and their corresponding payments must be submitted no later than the 20th day of the month following the period for which you are reporting. You’ll typically be expected to file on a monthly basis but can request a change in filing frequency by submitting a written application.
Note: While you can file a paper return using Form ST-3, reporting and remitting sales and use tax is primarily done online through the Georgia Tax Center, as this simplifies the process. If the sales or use tax you owe exceeds $500 for any return, you'll be required to file and pay electronically anyway.
Business Privilege Taxes
In Georgia, there are a number of statewide taxes and charges levied on LLCs for the privilege of engaging in certain specific sectors and business activities. The state has authorized a number of these business privilege taxes, with some of the most common ones being:
- Film Tax
- State Hotel-Motel Fee
- Fireworks Excise Tax
- Non-Prepaid 911 and Prepaid Wireless 911 Charges
- Transportation Services Tax
The specifics of each of these taxes – including rates, filing requirements, and exemptions – will vary on a case-by-case basis, which makes it important to consult an accountant in order to ensure your LLC’s compliance.
For a full list of all these business taxes, as well as more information on how they work, visit the Georgia Department of Revenue website.
All businesses in Georgia with employees will have some additional state-level employer tax obligations to satisfy. Two of the main taxes that you’ll need to pay in addition to your federal employer taxes include:
In Georgia, employers are required to deduct a proportion from their employees' wages and pay it directly to the government — this allows the employees’ income tax to be collected from their earnings throughout the year instead of having to be paid as a lump sum at the end.
The rates of withholding tax that you’ll need to collect vary between 1% and 5.75%, depending on the personal income tax bracket that each employee falls into. Depending on the amount your employees’ salaries are withholding, your business may need to pay WH tax every other week, every month, every quarter, or every year.
The deadline for your business to submit its withholding tax will vary depending on when you file this tax, as each payroll period has its own due date. You can find more information about these deadlines using the Withholding Tax Due Dates page on the Georgia Department of Revenue website.
Note: For more information on all the relevant forms you’ll need in order to file your state withholding taxes, be sure to see the Georgia Department of Revenue website.
Unemployment tax is a mandatory quarterly payment that businesses with employees must make on the first $9500 of each employee’s annual salary in order to support the unemployment benefits system in Georgia.
Your LLC will be required to pay unemployment tax if it meets any of the following criteria:
- General Employers: Businesses with a total payroll of at least $1,500 in any quarter of the year or with at least one worker that was employed during 20 different weeks in a calendar year, must pay unemployment tax.
- Agricultural Employers: Businesses involved in agriculture are liable for unemployment tax if they have a gross payroll of $20,000 or more in any quarter or if they employ 10 or more workers on any day during 20 different weeks in a calendar year.
- Domestic Employers: Businesses that hire workers for domestic services (like housekeeping) are required to pay unemployment tax if they have a payroll of at least $1,000 in any quarter.
In all these cases, employers who meet these conditions must file tax and wage reports every quarter. These reports, along with any payments due, must be submitted by April 30th, July 31st, October 31st, and January 31st (or the next working business day if these dates fall on a weekend or a legal holiday).
Regardless of where your business is located, if you run an LLC in the US, there are a number of federal taxes you’ll need to pay. Below are some of the main types your LLC may be required to pay for federal tax purposes:
By default, the IRS will not treat single and multi-member LLCs as a separate entity from you for tax purposes. What this means is that you’ll need to report your share of your LLC’s profits on your individual tax returns and pay federal income tax on them at the personal rate of your tax bracket.
Having said that, keep in mind that LLCs can also elect to be taxed as C corps or S corps, which changes how these taxes are levied in different ways.
In addition to being required to pay individual income tax, members of single- and multi-member LLCs will need to pay self-employment tax on the share of the business’s profits that they report on their personal tax return at the end of the year.
This tax is levied at a flat rate of 15.3% against businesses with net earnings that exceed $400, though it is applied slightly differently to LLCs that have elected to be taxed as S corps or C corps.
If your LLC hires any employees, it will need to withhold a portion of their salaries to cover various types of taxes on your employees’ behalf – including Social Security, Medicare (FICA), and payroll taxes.
Furthermore, the members of any LLCs that have elected to be taxed as an S corp will be required to pay employment taxes on their salaries. However, in return for this, the remainder of the business’s profit after these salaries have been distributed will be safe from both self-employment and FICA taxes.
If your LLC engages in certain types of business (such as the sale of alcohol and tobacco or operating a heavy highway vehicle, among others), it may need to pay federal excise taxes in order to do so legally. Each excise tax comes with its own set of rules, rates, and filing obligations you’ll need to be aware of.
Understanding and fulfilling these federal tax obligations is crucial for keeping your LLC compliant and avoiding unnecessary financial penalties and/or fines.
How to File LLC Taxes in Georgia
Below, we’ve outlined the general process an LLC in Georgia will need to follow in order to file their tax return correctly. Note that the specificities of each step will vary slightly depending on how your LLC is organized and the specific locality it’s based in.
Step 1: Gather Your Documentation
To ensure accurate tax filing, thorough record-keeping is essential. Begin by collecting your personal information, including:
- You and your partner’s Social Security number, date of birth, and residential address
- The previous year’s tax returns
- Your LLC’s Employer Identification Number (EIN)
Then, you’ll need to gather all documentation related to your business’s income, such as:
- Invoices you’ve issued
- Sales transaction logs
- Electronic payment reports from services like PayPal or Stripe
Lastly, assemble all records pertaining to your business expenses, which should cover:
- Lease receipts for your business premises
- Bills for utilities
- Records of office supplies purchases
- Documentation of business-related travel
- Payroll records for employees
Note: Depending on how your LLC is organized and its tax election, you may need different information for your tax return.
Step 2: Find The Right Tax Forms
Once you've gathered all necessary documents, the next step is to select the correct tax forms for your LLC based on its organization:
- Single-Member LLCs: The business’s total income and expenses are reported on a Schedule C form, which is attached to the owner’s personal tax return and due by April 15 or the following business day if it lands on a weekend or holiday.
- Multi-Member LLCs: File an information return using Form 1065. Members must fill out a Schedule K-1 showing their individual earnings or losses by March 15 or the next business day.
- C Corporations: File a corporate tax return using Form 1120 by the April 15 deadline or on the next business day if it's a weekend or holiday.
- S Corporations: Use Form 1120-S for the corporate tax return and distribute Schedule K-1 forms to shareholders for reporting their shares of profits or losses. The deadline for filing taxes using 1120-S is March 15 or the following business day.
Since state and local taxes will have their own individual forms and requirements, we recommend contacting your municipality or hiring an accountant for guidance.
With the appropriate documentation gathered and the correct tax forms for your business entity on hand, you’ll be ready to fill them out and submit them.
Step 3: File Your Taxes
The majority of businesses choose electronic filing for its speed, enhanced security, and reliability compared to paper filing, which can be slower and more prone to errors. Here’s how it works:
- Federal Tax Returns: The IRS provides two electronic services for tax submission: Free File for businesses with an AGI below $72,000 and Free Fillable Forms for those above the threshold.
- State and Local Tax Returns: While the filing requirements will vary depending on each specific tax, you’ll be able to file the majority of your taxes online using either the Georgia Tax Center or a Free File Vendor approved by the Georgia Department of Revenue.
Note: These electronic filing tools are best suited for those who are already confident in handling their LLC taxes as if filling out a paper form.
For new business owners, we recommend opting for the expertise of a tax professional in order to ensure both accuracy and compliance in your tax filings.
Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes.
Keep Your Georgia LLC Compliant
While LLCs are generally easier to maintain than corporations, there are certain state and local formalities your LLC must satisfy in order to remain compliant.
Georgia LLC Annual Registration
Along with most other business entities, LLCs have an obligation to file an annual report (known as an annual registration), which is due between January 1 and April 1. When filing the annual registration, you'll need to provide up-to-date information about your LLC, such as the names and addresses of the members and/or managers, the registered agent, and the principal office address.
Your annual registration must be accompanied by a filing fee, which is $50 if you choose to file online or $60 if you use a paper form to file instead. If you fail to file your annual registration on time, you’ll also need to pay an additional late fee of $25.
Note: Regardless of how you choose to file, the process will need to be completed through the Georgia Corporations Division Annual Registration page.
Licensure and Tax Requirements
In Georgia, almost all businesses are required to obtain various licenses and permits at the local, state, and federal levels. Below, we’ve broken down three of the most common types your LLC may need:
- Sales Tax Licenses: Any business dealing with tangible goods, certain taxable services, or service contracts must register to pay this tax online using the Georgia Tax Center.
- Professional Licenses: Individuals in certain professions must acquire a professional license to lawfully practice their trade. These licenses, issued by Georgia's Professional Licensing Boards, cover a wide range of professions, from architects and interior designers to operators of wastewater treatment plants.
- Environmental Permits: Businesses that engage in activities that might affect the environment will need to obtain the relevant license from the Georgia Environmental Protection Division (EPD), in order to operate legally.
Georgia LLC Taxes FAQs
In Georgia, LLCs must pay income taxes on their earnings at a state level in addition to any federal income taxes. In addition to Georgia income tax, LLCs are liable to pay a number of other state taxes, including sales taxes, payroll taxes, and other employer taxes.
To find out more about this topic, see our LLC Taxes article.
LLCs in Georgia benefit from pass-through taxation, meaning income is only taxed once at the individual member level and avoiding corporate income tax. This structure provides flexibility in profit distribution and can result in lower overall tax liabilities compared to some other business structures.
To find out how you can start benefiting from this structure today, see our Georgia LLC formation article.
Net worth tax is a tax levied against the net value of all a business’s assets. While LLCs aren't subject to net worth tax by default, they can be if they elect to be taxed as a C Corporation. It's advisable for LLCs, especially those considering C corp taxation, to consult with a tax professional for guidance on their specific tax obligations.
The annual fee for an LLC in Georgia is $50 if filed online and $60 if filed with a paper form. This fee is for the annual registration required by the Georgia Secretary of State and must be paid in addition to any other state federal taxes to keep the LLC in good standing.
For more information, see the Annual Registration section above.