Georgia Sales Tax Nonpayment Risk Checklist
Sales tax nonpayment in Georgia occurs when a business or seller collects sales tax from customers but fails to remit it to the Georgia Department of Revenue. This represents a serious compliance issue because the tax collected belongs to the state, not to the business.
When nonpayment is identified through audit, filing gaps, or reporting discrepancies, the state begins enforcement procedures to recover the unpaid amount plus Georgia sales tax nonpayment penalties and interest. Ignoring this problem typically results in escalated collection efforts, growing financial penalties, and potential legal action.
What This Issue Means
Sales tax nonpayment means that sales tax collected from customers was not sent to the
Georgia Department of Revenue by the filing deadline. Several methods help the state identify nonpayment: a business fails to file a return, files a return without payment, an audit reveals under-reported sales or unpaid tax, or state records show a pattern of incomplete payments.
Why the State Issues This Notice
Georgia sales and use tax law requires businesses to collect and remit sales tax on taxable transactions. The state requires timely remittance because sales tax revenue funds state services and programs.
Common triggers include filing gaps, audit findings revealing unreported sales, a business reporting zero tax owed when similar businesses typically have tax liability, or credible third-party information suggesting sales tax was collected but not remitted. Administrative action to collect the unpaid amount begins when the Georgia Department of Revenue identifies that a business has not paid sales tax that was due.
What Happens If This Is Ignored
If sales tax nonpayment is not addressed, the Georgia Department of Revenue typically initiates collection activity. This may include sending formal collection notices such as Notice of
Proposed Assessment or Official Assessment and Demand for Payment, assessing penalties and interest on the unpaid amount, placing a lien through a Notice of State Tax Execution on business assets or personal property, and pursuing legal action or wage garnishment.
Under O.C.G.A. 48-8-66 sales tax penalties, failure to file or pay results in 5% or $5 (whichever
is greater) per 30-day period, capped at 25% or $25 (whichever is greater). Interest accrues
monthly at an annual rate equal to the Federal Reserve prime rate plus 3%, which is 10.5% as of 2025.
Criminal charges under O.C.G.A. § 48-8-7 apply if nonpayment involves knowing and willful failure to collect or remit tax: first conviction is a misdemeanor of high and aggravated nature with up to $5,000 fine or up to one year imprisonment, while second or subsequent conviction is a felony with up to $10,000 fine or up to five years imprisonment.
What This Does NOT Mean
Nonpayment does not automatically mean you face criminal charges, though knowing and willful violations carry criminal penalties under state law. License suspension is possible during collection proceedings, but it does not mean your business is immediately closed.
The state has not seized your accounts or property yet, as those steps come later if collection efforts are not successful. You can negotiate or arrange payment through a Georgia Department of Revenue payment plan, and nonpayment does not erase if you ignore it.
Checklist: What to Do After Receiving a Notice
Step 1: Locate and review any written notice from the Georgia Department of Revenue. Check
all mail for notices labeled “Notice of Proposed Assessment,” “Official Assessment and Demand for Payment,” “Notice of State Tax Execution,” or “Statement of Taxpayers Account.”
Step 2: Verify the specific tax period and amount listed on the notice. Confirm the months or
quarters referenced. Check the total unpaid tax amount plus penalties and interest. Note the filing deadline that was missed. Document your reasons if you disagree with the amount.
Step 3: Gather all records related to the tax period in question. Locate sales records,
point-of-sale reports, and transaction documentation. Collect invoices, receipts, and filed returns for that period. Obtain bank statements showing whether payment was made and prior correspondence with the Department of Revenue.
Step 4: Determine whether the nonpayment resulted from a filing error, payment error, or
non-filing. Review your records to see if a return was filed. Check whether the payment was attached or sent separately if a return was filed. Determine why no return was filed if applicable and document your findings.
Step 5: Contact the Georgia Department of Revenue to clarify the issue. Call (877) 423-6711
and provide your business name, sales tax account number, and the tax period in question. Ask specifically what the nonpayment relates to and request an explanation of the penalties assessed. Take notes on what you learn.
Step 6: Request an itemized statement of account. This statement should show the original
unpaid tax amount, penalties assessed, interest calculated, and the current total owed.
Step 7: Evaluate your ability to pay the full amount. Determine whether you can pay the total in
full. Gather financial records showing your current business situation. Consider what payment arrangement might be feasible if full payment is not possible.
Step 8: Explore available payment options. Georgia Department of Revenue payment plans
may not exceed 60 months and require a minimum monthly payment of $25. Plans include a
$50 administrative fee for auto-draft plans or $100 fee for paper check payment plans. Plans cannot be changed once established, though the Department may agree to cancel and create a new agreement with a $50 modification fee.
Step 9: Make agreed-upon payments on time and keep records. Set payment reminders to
avoid missing installment deadlines. Pay through the method confirmed by the Department of
Revenue. Keep copies of all payment confirmations and document all correspondence.
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
Step 10: If you disagree with the assessment, request a formal hearing or appeal. The Georgia
Department of Revenue normally has three years to assess sales tax after the return is filed. No statute of limitations applies if no return was filed or a false return was filed with the intent to evade tax.
Common Mistakes to Avoid
Missing deadlines in correspondence can result in loss of appeal rights or continued enforcement action. Failing to respond to notices does not make the issue go away and typically leads to increased penalties and collection efforts.
Providing incomplete information can delay resolution and confuse the actual amount owed. Not keeping copies of all communication creates problems when disputes arise later, while assuming the debt will go away is incorrect because sales tax nonpayment does not expire without action.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
We help with:
20+ years experience • Same-day reviews available
