Thursday, 27 September 2012 16:54

Allstate Reverses Decision on GA Paint Materials Sales Tax

The Georgia Collision Industry Association (GCIA) announced that Allstate has reversed its decision that it would no longer reimburse shops for the sales tax charged to consumers on paint and materials. According to GCIA, Allstate communicated this change in policy to individual 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 howard@gcia.org.

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