Rules and Regulations of the State of Georgia
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Subject 560-1-1 ORGANIZATION

Rule 560-1-1-.01 [Repealed]

Rule 560-1-1-.02 Division Organization

(1) The Department of Revenue is responsible for administering and enforcing the revenue laws of the state, under the direction of the State Revenue Commissioner. The Commissioner is also responsible for the administration of Georgia laws relating to alcoholic beverages, tobacco, and motor vehicle registrations, licenses, and titles.
(2) The Commissioner has established several divisions of the Department to facilitate the administration of its duties, pursuant to O.C.G.A. § 48-2-6. Each division is led by a director and is further subdivided into sections, pursuant to O.C.G.A. § 50-4-2.
(3) The Department's divisions and their respective responsibilities are as follows:
(a) Alcohol & Tobacco. This division administers and enforces alcohol, tobacco, and motor fuel tax laws. The division reviews and issues licenses, promotes voluntary compliance, provides law enforcement services, and collects and audits excise taxes.
(b) Audits. This division audits both individual and business taxpayers. It audits and appropriately assesses corporate income tax, sales and use tax, individual income tax, withholding tax, non-resident withholding tax, tax of pass-through entities, international fuel fax, International Registration Program compliance, film withholding, motor fuel tax, and other tax types. It also administers Voluntary Disclosure Agreements.
(c) Commissioner's Office. This division assists the Commissioner, as chief executive of the Department, in the administration of the Department. The Deputy Commissioner oversees the Department's discharge of duties as designated by the Commissioner, pursuant to O.C.G.A. § 48-2-5. The division also handles Open Records Act requests and media inquiries.
(d) Collections. This division oversees, promotes, and ensures taxpayers' voluntary compliance with Georgia tax requirements. The division issues assessments and other notices of liabilities, assists and educates taxpayers, resolves taxpayers' problems, and collects delinquent taxes.
(e) Finance. This division provides administrative services to the Department by overseeing and accounting for the Department's resources. The division also provides comprehensive personnel services to the Department.
(f) Information Technology. This division develops, enhances, maintains, and secures the Department's computer applications, associated infrastructure, and information. The division also facilitates the exchange of information with the public. The division is also responsible for overseeing the retention of Department records.
(g) Legal Affairs & Tax Policy. This division provides legal and tax policy guidance to the Department divisions, taxpayers, and state officials. It also provides counsel on day-to-day affairs of the Department and issues written guidance to assist taxpayers in complying with the laws that the Department administers. The division also serves as the Department's liaison for all judicial proceedings.
(h) Local Government Services. This division oversees local tax administration by training local officials, reviewing tax digests, overseeing local tax administration, and distributing funds to the local governments. The division also administers unclaimed property.
(i) Motor Vehicles. This division administers the registration, licensing, and titling of motor vehicles in Georgia and partners with Georgia counties to facilitate applications and payments for title and vehicle registrations and license plates.
(j) Office of Special Investigations. This division investigates and collects evidence of violations of the tax and motor vehicle title and registration laws, and enforces criminal and civil sanctions for violations of such laws.
(k) Processing. This division processes tax returns and supporting documentation received either by mail or electronically.
(l) Taxpayer Services. This division provides support to taxpayers by answering questions, resolving problems, registering new taxpayers, and resolving protests.
(4) All legal notices should be directed to the Commissioner at the Department of Revenue headquarters: 1800 Century Boulevard, Atlanta, GA 30345.
(5) Records available for public inspection are available at the Department of Revenue headquarters: 1800 Century Boulevard, Atlanta, GA 30345.

Rule 560-1-1-.03 [Repealed]

Rule 560-1-1-.04 [Repealed]

Rule 560-1-1-.05 Inspection of Records

Most records that the Department of Revenue maintains are confidential pursuant to O.C.G.A. § 48-2-15 and § 48-7-60, and are not public records available for inspection by the public. Rules, statements of policy, interpretations, final orders, and decisions which are public, may be inspected during business hours at the Department of Revenue's headquarters in Atlanta, Georgia.

Rule 560-1-1-.06 [Repealed]

Rule 560-1-1-.07 Repealed

Rule 560-1-1-.08 [Repealed]

Rule 560-1-1-.09 Procedure to Petition for the Adoption of Rules

(1) Purpose. To prescribe the procedure for an interested person desiring to petition the Department of Revenue requesting the promulgation, amendment, or repeal of a rule pursuant to Section 9 of the Georgia Administrative Procedure Act.
(2) Submission.
a. The petitioner shall submit a petition in writing to the State Revenue Commissioner.
b. The petition shall state fully:
i. The rule involved, and
ii. The reason for the desired change.
(3) Consideration. The Commissioner shall consider all information in the petition when rendering a determination.
(4) Disposition. Within 30 days after submission of a petition, the Department will notify the petition in writing of its disposition of the request.
a. Denial. If the Department denies the request, it will send such denial to the taxpayer, stating its reasons for the denial.
b. Grant. If the Department does not deny the request, it will initiate the rule-making proceedings in accordance with the Georgia Administrative Procedure Act.

Rule 560-1-1-.10 Letter Rulings

(1) Purpose. The purpose of this regulation is to prescribe the guidelines and procedures of the Department for the submission of letter ruling requests and the issuance, redaction, and public disclosure of letter rulings on specific issues interpreting and applying Georgia tax laws and regulations. Letter rulings issued pursuant to this rule constitute declaratory rulings pursuant to O.C.G.A. §§ 48-2-15.2 and 50-13-11.
(2) Definitions.
(a) "Declaratory ruling" means the disposition of a petition filed pursuant O.C.G.A. § 50-13-11.
(b) "Informal advice" includes, but is not limited to, any oral or written comments, assistance, or advice provided by the Department in response to questions submitted on an informal basis.
(c) "Letter ruling" or "ruling" means a written determination that is issued to a taxpayer by the Commissioner in response to such taxpayer's written inquiry about the taxpayer's status for tax purposes or tax effects of acts or transactions, and is based on applying the tax statutes, regulations, or other legal authority to such taxpayer's specific set of facts.
(3) Subject Matter of Letter Rulings. The Department issues letter rulings on the tax effects of specific acts or transactions. A letter ruling request must be based on a specific fact situation and specific parties.
(a) Ineligible Requests. The Department will not issue letter rulings in regard to:
1. Alternative tax treatments or hypothetical situations or questions;
2. Notices of proposed or official assessments or decisions thereon;
3. Decisions on refund claims, offers in compromise, installment payment agreement requests, voluntary disclosure or closing agreements, or applications to waive penalty or interest;
4. Matters scheduled for or currently under audit, currently under protest or appeal, or related to pending or ongoing litigation;
5. Questions involving nexus or residency of a taxpayer;
6. Questions clearly answered by the tax statutes, regulations, or other legal authority; or
7. Federal tax matters, unless the request concerns differences in treatment for federal and state purposes.
(b) Department's Discretion. The Department may decline to issue a letter ruling whenever warranted by the facts and circumstances of the particular request.
(c) Notice. The Department will notify the requesting taxpayer that the request is not eligible for a letter ruling.
(4) Procedure to Request a Letter Ruling.
(a) Written Requests. Letter ruling requests must be made in writing and must be from a specific taxpayer or that taxpayer's representative. The Department will not issue letter rulings in response to oral requests.
(b) Address. Letter ruling requests may be submitted via mail to the Georgia Department of Revenue, Legal Affairs & Tax Policy, 1800 Century Blvd NE, Suite 15000, Atlanta, Georgia 30345 or via email to
(c) Contents. A letter ruling request must contain all relevant facts and information, including the following information:
1. Taxpayer Identification:
(i) Name,
(ii) Mailing address,
(iii) Telephone number,
(iv) E-mail address,
(v) Taxpayer identification number of the taxpayer making the request, and
2. Preferred Communication. Taxpayer's preferred method of receiving notifications regarding the letter ruling (letter or email).
3. Power of Attorney. If the taxpayer is represented by a third party, the third party must submit a signed Power of Attorney.
4. Facts. The request must contain a complete statement of all relevant facts, including details of the entire transaction at issue, even if the request pertains to only a portion of that transaction. The statement of facts must outline facts contained in supporting documentation, and must not be merely incorporated by reference.
5. Evidentiary Documentation. The request must include true copies of all relevant documents and an analysis of their bearing on the issue(s), specifying pertinent provisions. All documents submitted will become part of the Department's file and will not be returned to the taxpayer.
6. Taxpayer's Position on Issue Posed. The request should indicate the taxpayer's position on the issue(s), including references to all relevant statutes, regulations, court decisions, or other written guidance, whether in support of or contrary to that position. Even if the taxpayer is not urging a particular outcome, the taxpayer should state the taxpayer's views on the issue and reference relevant authorities.
7. Other Jurisdiction's Rulings. If applicable, the request must include a statement that a ruling or determination has been, is being, or will be sought or has already been issued by another taxing authority or court on the same issue or transaction underlying the request. If another taxing authority or court has issued a ruling or determination, the request should include a copy of that ruling or determination.
8. Expedition. If requesting expedited treatment, the request must include a statement requesting an expedited ruling and the reasoning for such request. See paragraph (11) for reasons justifying an expedited request.
9. Redaction. If requesting redactions of the public letter ruling in addition to those outlined in subparagraph (9)(a), the request should include a second copy of the request with the proposed redactions indicated by use of brackets.
10. Mandatory Representations. Specific representations by the taxpayer making the request, certifying that:
(i) The taxpayer is not currently under audit by the Department;
(ii) The taxpayer has not been notified by the Department of a pending audit;
(iii) The taxpayer has not submitted a claim for refund involving transactions or issues contained in the request; and
(iv) The issues contained in the request are not currently the subject of litigation.
(d) Acknowledgement of Request. The Department will notify the requesting taxpayer of its receipt of the letter ruling request. If expedited treatment was requested, the notification will address whether this request is granted.
1. Requests for Additional Information. If the Department receives a request that is missing required information or documents or the Department requires additional information or documents to address the request, the Department will notify the taxpayer in writing of the missing or additional information or documents. The taxpayer must provide the requested information or documents in accordance with the instructions in the notification within 30 days or the Department will close the request. The taxpayer may resubmit the request along with the missing or additional information or documents at any time.
(e) If, prior to the issuance of a letter ruling, a taxpayer is notified of a pending audit by the Department, the taxpayer shall inform the auditor of the outstanding letter ruling request.
(5) Withdrawal of Requests. A taxpayer may withdraw a letter ruling request in whole or in part at any time prior to the Department's issuance of the ruling. The withdrawal must be submitted in writing to the address in subparagraph (4)(b). The Department will retain all documents and information submitted and may consider any such documents or information in subsequent audits or examinations of the taxpayer's returns.
(6) Disposition of Letter Rulings. Letter ruling requests will be completed in the order received, unless a request is granted expedited treatment. The Department will respond to all requests promptly, but timing will vary based on the volume of pending requests and the scope and complexity of the request. Rulings will be sent to the taxpayer.
(a) Letter Ruling Contents. Letter rulings will contain a statement of facts, an explanation of the law, and the application of the law to the facts.
(7) Effect of Rulings.
(a) No Precedent. A letter ruling has no precedential value except to the taxpayer to whom the ruling was issued and only for the specific fact situation or transaction addressed in the ruling. A taxpayer may not rely on a ruling issued to another taxpayer.
(b) Taxpayer's Reliance. A taxpayer may rely on a ruling issued to that taxpayer unless and until the ruling is invalidated.
(8) Publication and Public Inspection of Rulings. Letter rulings will be posted, in a redacted format, on the Department's website and made available in hard copy format for public inspection at the Department's headquarters. Any person wanting to inspect letter rulings should contact the Department to arrange a mutually convenient time during regular business hours to inspect the letter rulings. Any copies of letter rulings provided will be subject to a per page copying charge not to exceed ten cents per letter-sized page.
(a) Exception. If the Department determines redaction of a letter ruling cannot sufficiently protect the identity of the requesting taxpayer or related parties, the letter ruling will not be published or made available for inspection.
(9) Redaction of Letter Rulings.
(a) Redacted Information. Prior to making a letter ruling public, the Department will redact:
1. Names, mailing addresses, telephone numbers, email addresses, taxpayer identification numbers, and other identifying details of the taxpayer making the request and all other identified parties;
2. Tax return information;
3. Information required by federal or state statute or regulation to be kept confidential; and
4. Other information as the Department deems appropriate.
(b) Taxpayer's Proposed Redactions. If a taxpayer wishes to have additional information not listed in section (a) of this paragraph redacted, the taxpayer should include a copy of the proposed redactions along with the original request.
(c) Taxpayer's Review. Prior to making a letter ruling public, the Department will provide the taxpayer to whom the ruling is issued the proposed redacted version of the ruling. The taxpayer must respond to the proposed redacted ruling with any additional redactions and an explanation for such redactions within 30 days of receipt of the proposed redacted version. The Department will take into consideration the taxpayer's proposed redactions but will make the final determination as to the contents of the public version of the ruling. If the Department receives no response from the taxpayer within the 30-day period, the Department's proposed redacted version of the ruling will be made public.
(10) Invalidation of Letter Rulings.
(a) Causes. A letter ruling may become invalid because of a change in law or policy.
(b) Automatic Invalidation. A letter ruling may become invalid by operation of law through either a change in statute or regulation or an order of a court or tribunal with jurisdiction over the Department.
(c) Invalidation through Administrative Discretion. A letter ruling may become invalid due to an opinion of the Attorney General or an administrative change to the Department's policies.
(d) Good Faith Reliance. A taxpayer who acts in reliance on a ruling that is later invalidated will be deemed to have acted in good faith.
(e) Material Deviation from Facts Presented. A letter ruling request that reflects facts that vary materially from those detailed in the request or a transaction is not a carried out substantially as proposed in the request is invalid. If the Department learns of such deviation, it will issue a revocation or modification of the original letter ruling. This revoked or modified letter ruling will serve as notice that the taxpayer may not rely on the original letter ruling.
(11) Expedited Letter Ruling. Expedited letter rulings are rare and will only be granted in unusual cases.
(a) Treatment. If a letter ruling is expedited, it means that a request is processed ahead of requests received before it. If expedited treatment is granted, the Department cannot guarantee that the letter ruling will be processed by the date requested.
(b) Qualification. Expedited treatment is granted only if the requesting taxpayer needs to obtain a letter ruling before a certain date to avoid serious consequences, the taxpayer submitted the request as promptly as possible, and the taxpayer could not have anticipated the need for such letter ruling earlier.
(c) Procedure. A statement requesting expedited handling should be submitted with the letter ruling request and include an explanation of the need for the expedited treatment, a representation that the taxpayer filed the request as promptly as possible, and the requested date for the letter ruling's issuance.
(d) Denial. If the Department does not grant a request for expedited letter ruling, it will notify the taxpayer.
(12) Inapplicability.
(a) Informal Advice to Taxpayers. Informal advice is not binding on the Department.
(b) Other Rulings and Guidance. This rule shall not apply to declaratory judgments sought pursuant to O.C.G.A. § 50-13-10.

Rule 560-1-1-.11 [Repealed]

Rule 560-1-1-.12 Informal Conference

(1) Upon receipt of a written request for a conference as statutorily authorized pursuant to O.C.G.A. §§ 48-2-35 or 48-2-46, the Department will schedule an informal conference at a time and in a manner convenient for both the taxpayer and the Department.
(2) Informal conferences are conducted in person or by telephone, audio or video teleconference, or other electronic media. Conferences held in person will be held at the Department of Revenue headquarters at 1800 Century Boulevard NE, Atlanta, Georgia, 30345.
(3) Informal conferences will be held by a Department employee authorized in writing by the Commissioner to conduct such conferences.
(4) An informal conference is not a hearing as defined in the Georgia Administrative Procedure Act, and will not prejudice the rights of any taxpayer or the Department. Conferences do not follow the rules of evidence and no formal record of the conference will be made.
(5) The taxpayer should submit all documentation, relevant facts, and positions prior to the conference, either with the written request for the conference or to the Department employee who schedules the conference.
(6) The taxpayer may be represented by an attorney, accountant, or other third party at the conference, but the third party must submit a signed Power of Attorney to act on the taxpayer's behalf or receive information relating to the taxpayer without the taxpayer present.
(7) The Department does not make a determination at the conference but will issue a written ruling after reviewing, researching, and discussing all relevant facts, documents, and law. The Department may contact the taxpayer with additional questions, or if necessary, to schedule another conference.
(8) If the Department believes that a conference will result in delay so as to jeopardize the Department's ability to assess or collect tax, the Department will issue a written determination of such finding and its final ruling on the underlying matter.

Rule 560-1-1-.13 [Repealed]

Rule 560-1-1-.14 Electronic Signature and Remote Notary

(1) Definitions
(a) "Electronic Signature" means a typed name; a scanned or digitized image of a handwritten signature; a code, password, or PIN; a handwritten signature input on an electronic signature pad; a handwritten signature, mark, or command input on a display screen by means of a stylus or device; or other such electronic indication of intent to sign that also meets the following requirements:
1. The electronic signature is executed or adopted in a manner that shows the signer's intent to sign;
2. The electronic signature is attached to or associated with the electronic document that is being signed;
3. The electronic signature identifies and authenticates an individual as the signer and source of the electronic document;
4. The electronic signature is linked to the document and cannot be excised, copied, or otherwise transferred to falsify an electronic document; and
5. The electronic signature is tamper-proof to ensure that the signature applied to or associated with one document is not applied to or associated with another document.
(b) "Remote Notarization" means a notarization that has been performed remotely and also meets the following requirements:
1. The notary public uses real-time audio-video communication technology or any similar real-time means of electronic video conferencing that allows the parties to communicate with each other simultaneously by sight and sound in order to notarize signatures.
2. The notary public is an attorney licensed to practice law in the State of Georgia or is operating under the supervision of an attorney licensed to practice law in the State of Georgia. "Supervision" means that the notary public is an employee, independent contractor, agent, or other representative of an attorney or an attorney observes the execution of documents either in-person or via the real-time audio-video communication technology.
3. The signer requiring the notary presents satisfactory evidence of identity as required in O.C.G.A. § 45-17-8 while connected to the real-time audio-video communication technology.
4. The notary public is physically located in the State of Georgia.
5. The signer transmits a copy of the signed document to the notary public on the same date it was executed for execution by the notary.
(2) Acceptance of Electronic Signatures
(a) In addition to the documents authorized for electronic signature in Ga. Comp. R. & Reg. § 560-3-2-.27, taxpayers and authorized third party representatives may submit electronic signatures on certain forms and documents authorized by the Commissioner through Department regulations, publications, policy bulletins, or other documents accepted as Department guidance.
(3) Acceptance of Remote Notarizations
(a) The Department will accept remote notarizations on documents that require a notary and are authorized by the Commissioner through Department regulations, publications, policy bulletins, or other documents accepted as Department guidance.

Rule 560-1-1-.15 Notice of Dissolution of Corporation

(1) Section 22-1305 of the Code of Georgia of 1933 as amended by Section 7 of Act 1265 of the 1970 Session of the General Assembly of Georgia, approved March 21, 1970, requires that the statement of intent to dissolve, whether by written consent of the shareholders or by act of the corporation, shall be delivered to the Secretary of State for filing as provided in Section 22-105, and that copy of said statement shall be filed with the State Revenue Commissioner.
(2) Section 22-1416(d) of the Code of Georgia of 1933, as amended by Section 6 of Act 1265 of the 1970 Session of the General Assembly of Georgia, approved March 21, 1970, requires on the dissolution of a foreign corporation a notice from the State Revenue Commissioner to the effect that the corporation has met the requirements with respect to reports and taxes established by the revenue laws of the State.
(3) The notice required by Section 22-1416(d)will be issued only upon written request of the taxpayer corporation directed to the State Revenue Commissioner. The request for notice must specify to whom notice, if issued, should be delivered; provided, however, that such notice, if issued, will be delivered only to the taxpayer corporation, or to its agent or attorney designated in writing to receive such notice.
(4) If, upon examination of all records of the Department, the taxpayer corporation has met all the requirements of the revenue laws of this State, the following notice will be issued by the State Revenue Commissioner:


On the Dissolution of:

Whereas: Section 22-1416(d) of the Code of Georgia of 1933 as amended, particularly as amended by Section 6 of Act 1265 of the 1970 Session of the General Assembly of Georgia, approved March 12, 1970, requires a notice from the State Revenue Commissioner upon dissolution of a foreign corporation; and

Whereas: The above named corporation has in writing applied to the State Revenue Commissioner for such notice;

Now, Therefore, The undersigned, in his official capacity as State Revenue Commissioner hereby gives notice that the above named corporation has of this date met the requirements with respect to reports and taxes established by the revenue laws of this State that are administered by the State Revenue Commissioner. To the extent provided by law the tax reports and returns of the above named corporation which are due under the tax laws administered by the State Revenue Commissioner remain subject to audit and assessment and this notice does not in any respect waive those provisions of law. Given in my official capacity, this _____ day of ________, 19___.


State Revenue Commissioner."

(5) If the notice required by Section 22-1416(d)cannot be issued because the taxpayer corporation has not met the requirements of the revenue laws of this State, then the taxpayer corporation will be notified of that fact.

Rule 560-1-1-.16 Regulations: Reference to Title 91A, Public Revenue

Any reference in the rules and regulations of the Department of Revenue (Chapter 560) to any provision of Georgia Code Title 92 or to any other provision of law which is codified on December 31, 1979, as a part of Georgia Code Annotated Title 92 shall be deemed, on and after January 1, 1980, to be a reference to the same provision as it appears in Georgia Code Title 91A or to that provision of Georgia Code Title 91A which has been substituted for the provision to which the original reference is made. The provisions of this paragraph shall not apply to any reference to any Act relating to the regulation and licensing of the operation of non-profit bingo games and other matters relative thereto, approved March 30, 1977 (Ga. L. 1977, p. 1164) as amended.

Rule 560-1-1-.17 Regulations: Clarification of Regulations in Force

(1) This regulation is promulgated to clarify the meaning and intent of Regulation 560-1-1-.16, to further effectuate the legislative intent behind the Georgia Public Revenue Code's recodification of the tax laws, and to further aid in the smooth transition from the prior tax laws to the recodification and modification of those laws by the Georgia Public Revenue Code.
(2) All regulations of the State Revenue Commissioner and Department of Revenue in force on December 31, 1979 are hereby repromulgated effective January 1, 1980. It is the purpose and intent that the regulations in effect prior to the effective date of the Public Revenue Code continue in effect, to the full extent authorized under the Public Revenue Code, from January 1, 1980 until subsequently, specifically amended. It is the intent of the Revenue Department to review prior regulations in light of the Public Revenue Code and to insure appropriate transition hereby during the time required to accomplish the review.

Rule 560-1-1-.18 Mandatory Disclosure of Social Security Numbers

The Commissioner may require the disclosure of social security numbers in connection with the administration of any tax, beverage alcohol, or motor vehicle registration law within his jurisdiction for the purpose of establishing the identification of individuals affected by such law, and for all other lawful purposes.

Rule 560-1-1-.19 Electronic Record Keeping and Retention

(1) Purpose. The purpose of this regulation is to define the requirements imposed on taxpayers for the maintenance and retention of books, records, and other sources of information under O.C.G.A. §§ 3-3-6, 48-7-2, 48-7-111, 48-8-52, 48-9-8, 48-9-9, 48-9-40, 48-11-5 and 48-11-11. It is also the purpose of the regulation to address these requirements where all or a part of the taxpayer's records are received, created, maintained or generated through various computer, electronic and imaging processes and systems.
(2) Definitions. For the purposes of this regulation, these terms shall be defined as follows:
(a) "Database Management System" means a software system that controls, relates, retrieves and provides accessibility to data stored in a database.
(b) "Electronic data interchange" or "EDI technology" means the computer-to-computer exchange of business transactions in a standardized structured electronic format.
(c) "Hard copy" means any documents, records, reports or other data printed on paper.
(d) "Machine-sensible record" means a collection of related information in an electronic format. Machine-sensible records do not include hard-copy records that are created or recorded on paper or stored in or by an imaging system such as microfilm, microfiche or storage-only imaging systems.
(e) "Storage-only imaging system" means a system of computer hardware and software that provides for the storage, retention and retrieval of documents originally created on paper. It does not include any systems, or part of a system, that manipulates or processes any information or data contained on the document in any manner other than to re-produce the document in hard copy or as an optical image.
(f) "Taxpayer" as used in this regulation means every person as defined under O.C.G.A. §§ 48-1-2(18) and 48-1-2(25).
(3) Record Keeping Requirements: General.
(a) A taxpayer shall maintain all records that are necessary to a determination of the correct tax liability under O.C.G.A. Chapters 3- 3, 48-7, 48-8, and 48-9. All required records must be made available on request by the Department of Revenue or its authorized representatives as provided for in O.C.G.A. §§ 48-7-2, 48-8-52, 48-9-8, 48-9-9, and 48-9-40. Such records shall include but not necessarily be limited to: suitable records of the sales and purchases taxable under O.C.G.A. Chapter 48-8 and other books of account which are necessary to determine the amount of tax due, merchandise purchased (including all bills of lading, invoices and purchase orders), a record of all deductions and exemptions claimed in filing sales or use tax returns including exemption and resale certificates, and a record of all tangible personal property used or consumed in the conduct of the business; suitable records under O.C.G.A. Chapter 48-7 for the purpose of computation of the income tax including accurate records of all income records including but not limited to invoices, bills of sale, bills of lading, exemptions, and other papers related to all motor fuel received, sold, delivered, or used within this state and all motor fuel exported from this state.
(b) If a taxpayer retains records required to be retained under this regulation in both machine-sensible and hard-copy formats, the taxpayer shall make the records available to the Department of Revenue in machine-sensible format upon the request of the Department of Revenue.
(c) Nothing in this regulation shall be construed to prohibit a taxpayer from demonstrating tax compliance with traditional hard-copy documents or reproductions thereof, in whole or in part, whether or not such a taxpayer also has retained or has the capability to retain records on electronic or other storage media in accordance with this regulation. However, this subsection shall not relieve the taxpayer of the obligation to comply with paragraph (3)(b) of this regulation.
(4) Record Keeping Requirements Machine-Sensible Records.
(a) General Requirements.
1. Machine-sensible records used to establish tax compliance shall contain sufficient detail information so that the details underlying the machine-sensible records can be identified and made available to the Department of Revenue upon request. A taxpayer has discretion to discard duplicated records and redundant information provided its responsibilities under this regulation are met.
2. At the time of an examination, the retained records must be capable of being retrieved and converted to a standard record format.
3. Taxpayers are not required to construct machine-sensible records other than those created in the ordinary course of business. A taxpayer who does not create the electronic equivalent of a traditional paper document in the ordinary course of business is not required to construct such a record for tax purposes.
(b) Electronic Data Interchange Requirements.
1. Where a taxpayer uses electronic data interchange processes and technology, the level of record detail, in combination with other records related to the transactions, must be equivalent to that contained in an acceptable paper record. For example, the retained records should contain such information as vendor name, invoice date, product description, quantity purchased, price, amount of tax, indication of tax status, shipping detail, etc. Codes may be used to identify some or all of the data elements, provided that the taxpayer provides a method which allows the Department of Revenue to interpret the coded information.
2. The taxpayer may capture the information necessary to satisfy paragraph (4)(b)1. of this regulation at any level within the accounting system and need not retain the original EDI transaction records provided the audit trail, authenticity and integrity of the retained records can be established. For example, a taxpayer using electronic data interchange technology receives electronic invoices from its supplier. The taxpayer decides to retain the invoice data form completed and verified EDI transactions in its accounts payable system rather than to retain the EDI transactions themselves. Since neither the EDI transaction nor the accounts payable system captures information from the invoice pertaining to product description and vendor name (i.e., they contain only codes for that information), the taxpayer also retains other records, such as its vendor master file and product code description lists and makes them available to the Department of Revenue. In this example, the taxpayer need not retain its EDI transaction for tax purposes.
(c) Electronic Data Processing Systems Requirements. The requirements for an electronic data processing accounting system should be similar to that of a manual accounting system, in that an adequately designed accounting system should incorporate methods and records that will satisfy the requirements of this regulation.
(d) Business Process Information.
1. Upon the request of the Department of Revenue, the taxpayer shall provide a description of the business process that created the retained records. Such description shall include the relationship between the records and the tax documents prepared by the taxpayer and the measures employed to ensure the integrity of the records.
2. The taxpayer shall be capable of demonstrating:
(i) the functions being performed as they relate to the flow of data through the system;
(ii) the internal controls used to ensure accurate and reliable processing; and
(iii) the internal controls used to prevent unauthorized addition, alteration, or deletion of retained records.
3. The following specific documentation is required for machine sensible records retained pursuant to this regulation:
(i) record formats or layouts;
(ii) field definitions (including the meaning of all codes used to represent information);
(iii) file descriptions (e.g., data set name); and
(iv) detailed charts of accounts and account descriptions.
(5) Records Maintenance Requirements.
(a) The Department of Revenue recommends but does not require that taxpayers refer to the National Archives and Record Administration's (NARA) standards for guidance on the maintenance and storage of electronic records, such as labeling or records, the location and security of the storage environment, the creation of back up copies, and the use of periodic testing to confirm the continued integrity of the records [the NARA standards may be found at 36 Code of Federal Regulations, Part 1234, July 1, 1995, edition.]
(b) The taxpayer's computer hardware or software shall accommodate the extraction and conversion of retained machine-sensible records.
(6) Access to Machine-Sensible Records.
(a) The manner in which the Department of Revenue is provided access to machine-sensible records as required in paragraph (3)(b) of this regulation may be satisfied through a variety of means that shall take into account a taxpayer's facts and circumstances through consultation with the taxpayer.
(b) Such access will be provided in one or more of the following manners:
1. The taxpayer may arrange to provide the Department of Revenue with the hardware, software and personnel resources to access the machine-sensible records.
2. The taxpayer may arrange for a third party to provide the hardware, software and personnel necessary to access the machine sensible records.
3. The taxpayer may convert the machine-sensible records to a standard record format specified by the Department of Revenue, including copies of files, on a magnetic medium that is agreed to by the Department of Revenue.
4. The taxpayer and the Department of Revenue may agree on other means of providing access to the machine-sensible records.
(7) Taxpayer Responsibility and Discretionary Authority.
(a) In conjunction with meeting the requirements of paragraph (4) of this regulation, a taxpayer may create files solely for the use of the Department of Revenue. For example, if a data base management system is used, it is consistent with this regulation for the taxpayer to create and retain a file that contains the transaction level detail from the data base management system and that meets the requirements of paragraph (4) of this regulation. The taxpayer should document the process that created the separate file to show the relationship between the file and the original records.
(b) A taxpayer may contract with a third party to provide custodial or management services of the records. Such a contract shall not relieve the taxpayer of its responsibilities under this regulation.
(8) Alternative Storage Media.
(a) For purposes of storage and retention, taxpayers may convert hard-copy documents received or produced in the normal course of business and required to be retained under this regulation to microfilm, microfiche or other storage-only imaging systems and may discard the original hard-copy documents, provided the conditions of this section are met. Documents which may be stored on these media include, but are not limited to general books of account, journals, voucher registers, general and subsidiary ledgers, and supporting records of details, such as sales invoices, purchase invoices, exemption certificates, and credit memoranda.
(b) Microfilm, microfiche and other storage-only imaging systems shall meet the following requirements:
1. Documentation establishing the procedures for converting the hard-copy documents to microfilm, microfiche or other storage-only imaging systems must be maintained and made available on request. Such documentation shall, at a minimum, contain a sufficient description to allow an original document to be followed through the conversion system as well as internal procedures established for inspection and quality assurance.
2. Procedures must be established for the effective identification, processing, storage, and preservation of the stored documents and for making them available for the period they are required to be retained under paragraph (10) of this regulation.
3. Upon request by the Department of Revenue, a taxpayer must provide facilities and equipment for reading, locating, and reproducing any documents maintained on microfilm, microfiche or other storage-only imaging systems.
4. When displayed on such equipment or reproduced on paper, the documents must exhibit a high degree of legibility and readability. For this purpose, legibility is defined as the quality of a letter or numeral that enables the observer to identify it positively and quickly to the exclusion of all other letters or numerals. Readability is defined as the quality of a group of letters of numerals being recognizable as words or complete numbers.
5. All data stored on microfilm, microfiche or other storage-only imaging systems must be maintained and arranged in a manner that permits the location of any particular record.
6. There is no substantial evidence that the microfilm, microfiche or other storage-only imaging system lacks authenticity or integrity.
(9) Effect on Hard-copy Record Keeping Requirements.
(a) Except as otherwise provided in this section, the provisions of this regulation do not relieve taxpayers of the responsibilities to retain hard-copy records that are created or received in the ordinary course of business as required by existing law and regulations. Hard-copy records may be retained on a record keeping medium as provided in paragraph (8) of this regulation.
(b) If hard-copy records are not produced or received in the ordinary course of transacting business (e.g., when the taxpayer used electronic data interchange technology), such hard-copy records need not be created.
(c) Hard-copy records generated at the time of a transaction using a credit or debit card must be retained unless all details necessary to determine correct tax liability relating to the transaction are subsequently received and retained by the taxpayer in accordance with this regulation. Such details include those listed in paragraph (4)(b)1. of this regulation.
(d) Computer printouts that are created for validation, control, or other temporary purposes need not be retained.
(e) Nothing in this section shall prevent the Department of Revenue from requesting hard-copy printouts in lieu of retained machine- sensible records at the time of examination. In the event that extraordinary circumstances exist which prevent the Department of Revenue from utilizing machine sensible records at the time of examination, nothing in this section shall prevent the Department of Revenue from requiring hard copy printouts in lieu of machine sensible records.
(10) Records Retention: Time Period. All records required to be retained under this regulation shall be preserved pursuant to O.C.G.A. §§ 3-3-6, 48-7-2, 48-7-111, 48-8-52, 48-9-8, 48-9-9, 48-9-40, 48-11-5 and 48-11-11 unless the Department of Revenue has provided in writing that the records are no longer required.