Can an auctioneer sell shipping or storage containers tax-free under Georgia's GATE agricultural exemption, including portable-storage containers?

Plain-English summary

An auctioneer sold new and used shipping and storage containers to buyers who sometimes claimed Georgia's agricultural sales-tax exemption. Because buyers arranged their own transport and installation, the auctioneer could not see how a container would ultimately be used.

The Department ruled that the GATE exemption has no size, dimension, or material limit for qualifying containers. Containers can be exempt when used to package agricultural products, care for or raise agricultural products, or transport and ship agricultural products. A shipping container used as portable storage in an agricultural operation can also qualify.

For documentation, the dealer's good-faith acceptance of a valid GATE card was sufficient. The same proof requirements applied whether bidding occurred in person, by proxy, or online: the seller had to keep a copy of the card or all information shown on it and satisfy the good-faith checks described by the ruling.

What this means for you

Auctioneers and equipment sellers

You do not need to physically inspect the buyer's later installation to establish the exemption. You do need a valid GATE card accepted in good faith, and the claimed farm use must reasonably fit both the item and the buyer's type of business.

Farmers and agricultural producers

Portable shipping or storage containers are not disqualified merely because they are large, made of a particular material, or not affixed to real property. The container must actually be for a qualifying agricultural operation and the purchaser must hold a valid GATE card.

Accountants and tax professionals

Good faith includes checking expiration on the card's first use each calendar year, confirming the exemption could apply to the item, confirming it is reasonable for the purchaser's business, and ensuring the seller has no actual notice of suspension or revocation. Records must support in-person, proxy, and internet sales alike.

Common questions

Q: Is there a maximum size for an exempt agricultural container?
A: No. The ruling found no statutory or regulatory limit on size, dimensions, or physical makeup.

Q: Can a portable storage container qualify?
A: Yes, if it is used in a qualifying agricultural operation and the seller accepts the purchaser's GATE card in good faith.

Q: Are only grain bins eligible?
A: No. Other containers that could reasonably be used in a qualifying agricultural operation may qualify.

Q: What documentation must an online auction keep?
A: The same information required for an in-person sale: a copy of the GATE card or all data listed on the card, plus records supporting good-faith acceptance.

Q: Does a GATE card automatically exempt every purchase?
A: No. The exemption must be plausible for the item and the buyer's business, the card must be valid, and the seller must have no notice that it was suspended or revoked.

Q: Can another seller rely on this ruling?
A: No. It is limited to the requesting taxpayer and facts, though it shows the Department's stated good-faith documentation analysis.

Citations and references

Statutes, rules, and guidance:

• O.C.G.A. § 48-8-30 (sales and use tax imposition)
• O.C.G.A. §§ 48-8-2(31) and (33)(A) (retail sale and sale)
• O.C.G.A. § 48-8-3.3; Ga. Comp. R. & Regs. r. 560-12-2-.03 (GATE exemption)
• O.C.G.A. § 48-8-38 (dealer acceptance of exemption certificates)
• O.C.G.A. § 48-8-52 (three-year record retention)
• Georgia Department of Revenue Policy Bulletin SUT-2016-01 (good-faith acceptance of GATE cards)

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2018-13

Original ruling text

Georgia Letter Ruling Number: LR SUT-2018-13
Topic: Agricultural Equipment
Date Issues: December 7, 2018
This letter is in response to your request for guidance dated September 5, 2018 regarding the application of Georgia
sales and use tax to certain sales of shipping containers made by your company.
Facts as Presented by Taxpayer
[Redacted] (“Taxpayer”) is an auctioneer in the business of selling new and used tangible personal property
(“property”) through unreserved public auctions. Taxpayer regularly sells industrial equipment, motor vehicles,
agricultural equipment, and other property. The auctions take place throughout the year at a location within the state.
The owner of the property (“Consignor”) consigns the property to Taxpayer for the auction process while retaining
the title to the property. Taxpayer acts as a selling agent for the Consignor. In addition to selling property that is owned
by a Consignor, Taxpayer also purchases tangible personal property in its own name to auction.
Taxpayer charges all buyers sales tax on the sales price of the auctioned property and remits the tax to the Georgia
Department of Revenue unless the buyer produces the applicable exemption document.
Potential buyers may bid on items at the auction in person, bid by submitting a proxy, or bid for the items over the
internet through Taxpayer’s website. Buyers could be residents of the state of the auction, a different state, or a
different country.
Taxpayer regularly sells new and used storage and shipping containers (“Containers”). Customers argue these
Containers qualify for the Georgia Agricultural Tax Exemption (“GATE”) program. Because buyers arrange for their
own shipping and installation, Taxpayer has no way of determining the ultimate disposition of a Container after the
sale takes place.
Issues
1.

Is there a limitation on the size, dimensions, or physical makeup of containers that can qualify for the GATE
program?

2.

If a buyer claims a Container will not be affixed to real property but instead used as “portable storage” can the
Container qualify for the GATE program? What specific documentation is necessary to establish this claim?

3.

Beyond grain bins, are there any other types of storage containers that can qualify for the GATE program?

Analysis
Georgia levies and imposes a tax (subject to certain exemptions) on the retail purchase, retail sale, rental, storage, use,
or consumption of tangible personal property and on certain enumerated services. 1 “Retail sale” means a sale of
tangible personal property or taxable service to any person other than for resale. 2 “Sale” means any transfer of title or
possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner, or by any means of any kind of
tangible personal property for a consideration. 3
Georgia Agriculture Tax Exemption
Georgia sales and use tax does not apply to sales to, or use by, a qualified agriculture producer of agricultural
production inputs, energy used in agriculture, and agricultural machinery and equipment. 4 To obtain the benefit of the
exemption, the qualified agriculture producer must hold a valid Georgia Agriculture Tax Exemption (GATE)
certificate/card issued by the Georgia Department of Agriculture. 5
O.C.G.A. § 48-8-30.
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-2(33)(A).
4
O.C.G.A. § 48-8-3.3(b); Ga. Comp. R. & Regs. r. 560-12-2-.03.
5
O.C.G.A. § 48-8-3.3(d) and (e); Ga. Comp. R. & Regs. r. 560-12-2-.03(7).
1
2

Georgia Letter Ruling Number: LR SUT-2018-13
Topic: Agricultural Equipment
Date Issues: December 7, 2018
Page 2 of 3

Agricultural machinery and equipment includes devices and containers used in the transport and shipment of
agricultural products as well as grain bins and attachments to grain bins that are used in agricultural operations
regardless of whether such grain bins or attachments become incorporated into real property. 6Examples of agricultural
production inputs, when used in a qualifying agricultural operation, are materials, containers, crates, boxes, labels,
sacks, bags, or bottles used for packaging agricultural products when the product is either sold in the containers, sacks,
bags, or bottles directly to the consumer or when such use is incidental to the sale of the product for resale; and
containers, plastic, canvas, and other fabrics used in the care and raising of agricultural products or canvas used in
covering feed bins, silos, greenhouses, and other similar storage structures. 7
Dealer’s Acceptance of a Certificate of Exemption
All sales are subject to sales tax until the contrary is established. 8 O.C.G.A. § 48-8-38 requires retail sellers to collect
sales tax unless they, in good faith, take from the purchaser a properly completed certificate of exemption, such as a
GATE card. The GATE card is the only form of exemption certificate acceptable for purchases under the GATE
program. 9 A seller takes a GATE card in good faith when:
•
•
•
•

Upon the first use of a GATE card each calendar year, the seller verifies that the purchaser’s GATE card is
not expired;
The exemption could be applicable to the item being purchased;
The exemption is reasonable for the purchaser’s type of business; and
The seller has not received actual notice of a suspension or revocation of the GATE card. 10

A seller must obtain the same information for proof of a claimed exemption regardless of the medium in which the
transaction occurs. In other words, a seller must maintain a copy of a purchaser’s GATE card, or all data listed on the
card, notwithstanding whether the sale in made in person, by proxy, or over the internet. 11
Rulings
1.

Containers sold to or used by a GATE card holder are exempt from tax if such containers are used for packaging
agricultural products, used in the care and raising of agricultural products, or used in the transport and shipment
of agricultural products. There is no statutory or regulatory limitation on the size, dimensions, or physical makeup
of containers that can qualify for the agricultural sales and use tax exemption. Accordingly, regardless of size,
dimensions, or physical make up, containers used in a qualifying agricultural operation are exempt from tax when
sold to or used by a GATE card holder.

2.

A shipping container used in an agricultural operation as portable storage could qualify for exemption under the
GATE program. The dealer’s acceptance of a GATE card taken in good faith from the purchaser is sufficient
documentation to establish this claim.

6
O.C.G.A. § 48-8-3.3(a)(1); Ga. Comp. R. & Regs. r. 560-12-2-.03(2)(a). Agricultural products are items produced
by agricultural operations. O.C.G.A. § 48-8-3.3(a)(2.1); Ga. Comp. R. & Regs. r. 560-12-2-.03(2)(d). Agricultural
operations, a term which is used synonymously with the term agricultural purposes, includes growing, harvesting,
protecting, or storing crops; managing livestock, equine, or poultry; producing or storing feed for use in poultry or
livestock production; producing plants or designated animals; post-harvest services on crops with the intent of
preparing them for market or further processing; and manufacturing dairy products. O.C.G.A. § 48-8-3.3(a)(2); Ga.
Comp. R. & Regs. r. 560-12-2-.03(2)(b).
7
O.C.G.A. § 48-8-3.3(a)(3); Ga. Comp. R. & Regs. r. 560-12-2-.03(2)(c).
8
O.C.G.A. § 48-8-38.
9
O.C.G.A. §§ 48-8-3.3 and 48-8-38.
10
Georgia Department of Revenue Policy Bulletin SUT-2016-01, revised August 21, 2018.
11
O.C.G.A. § 48-8-38. Dealers must maintain records to support all purchases and sales for a period of no less than
three years. O.C.G.A. § 48-8-52.

Georgia Letter Ruling Number: LR SUT-2018-13
Topic: Agricultural Equipment
Date Issues: December 7, 2018
Page 3 of 3
3.

As discussed above, there is no statutory or regulatory limitation on the size, dimensions, or physical makeup of
containers (or other similar tangible personal property) that can qualify for the agricultural sales and use tax
exemption. In general, all containers (including grain bins) that could reasonably be used in a qualifying
agricultural operation may be sold tax exempt when the seller in good faith takes a GATE card from the purchaser
(or lessee).

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. The facts herein are those presented by the
taxpayer and the Department accepts them as true for this ruling. If the facts presented herein change, are not true, are
different, or material facts have been omitted, the conclusions reached in this ruling may change. In addition,
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 ruling.