Is an online employee wellness service with health education, personal tracking, and an annual biometric assessment subject to Georgia sales tax?

Plain-English summary

The employer-sponsored wellness service was not taxable. It combined an online portal offering nutrition, exercise, and general-health information with personal activity and health tracking, plus an annual biometric assessment performed by licensed medical personnel.

Georgia did not specifically designate that online health-information service as taxable. The provider still owed sales or use tax on items it used in developing and providing the service.

Common questions

Q: Did the personal web portal make the service taxable software?

A: The ruling treated the overall online health-information service as a nontaxable service.

Q: Did the provider owe no Georgia tax at all?

A: It still owed applicable tax on products and other items it used to develop or provide the service.

Citations and references

• O.C.G.A. §§ 48-8-1, 48-8-2(31), 48-8-2(33), 48-8-30 -- taxable property and services

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2015-03

Original ruling text

Date Issued: April 16, 2015
Georgia Letter Ruling: LR SUT-2015-03
Topic: Service Provider-Information Services

This letter is in response to your request for guidance on the application of Georgia sales and use
tax to online health information services.
Facts Presented by Taxpayer
Taxpayer provides health related information services to [Redacted] which will in turn provide
these services to its employees. The mission and purpose of Taxpayer is to promote healthy
lifestyles and encourage personal health management by providing comprehensive education,
skill sets, and tools to implement healthy habits on a daily basis. The service consists of two
components. It will be provided online through a web-portal and annually in person through a
representative of Taxpayer. The web portal provides the participant delivery of nutrition,
exercise, and general health information. A primary benefit to the customer is the employees’
interaction and tracking of their personal information. The participant has the ability to establish
an individual personal portal to record various items, such as logs of physical activity, eating
habits, weight, etc. Taxpayer also provides an annual biometric health assessment, which
consists of a questionnaire and general blood/lipid panel provided by licensed medical personnel.
The personal results collected are reported back to the individual through the web portal. It is
contemplated that [Redacted] may utilize this health service to provide incentive rewards to
employees who achieve certain benchmarks.
Taxpayer has developed the agenda for the health service and the software utilized in providing
this service internally. Sales tax has been paid on all applicable services and products utilized in
the development of the service.
Issue
Is Taxpayer’s online health information service subject to Georgia’s sales and use tax?
Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase,
retail sale, storage, use, or consumption of tangible personal property, certain enumerated
services, and utilities.1 Unlike sales of tangible personal property, which are generally presumed
to be taxable, sales of a service are not subject to tax unless the service is specifically designated
as taxable. Although “sale” and “retail sale”, both defined in O.C.G.A. § 48-8-2, include certain
services, the online health information service provided by Taxpayer does not fall within the
scope of the services designated as taxable by that code section.

1

O.C.G.A. §§ 48-8-1; 48-8-2(31) and (33); and 48-8-30.

Date Issued: April 16, 2015
Georgia Letter Ruling: LR SUT-2015-03
Topic: Service Provider-Information Services
Page 2 of 2

Ruling
Taxpayer’s online health information service is not a taxable service.2
The opinions expressed in this ruling are based upon the information contained in your request
and limited to the specific transactions, facts, circumstances and taxpayer in question. Should the
circumstances regarding the transactions change, or differ materially from those represented,
then this ruling may become invalid. In addition, please be advised that subsequent statutory or
administrative rule changes or judicial interpretations of the Statutes or Rules upon which this
advice is based may subject similar future transactions to a different tax treatment than that
expressed in this response.

2

Taxpayer provided that it has paid sales tax on all applicable services and products utilized in the development of
the service. It should be noted that Taxpayer is also responsible for sales and use tax on any items that it uses in the
provision of its service.