Does a Georgia electric-vehicle charging-station operator collect sales tax when it bills drivers by charging time or by kilowatt-hour?

Plain-English summary

The electric-vehicle charging operator billed customers for charging time, plus a session fee and possible idling charges. It did not sell electricity by kilowatt-hour and did not claim a resale exemption when buying electricity from the utility.

On the facts presented, the Georgia Department of Revenue ruled that this time-based model was a service, not a retail sale of electricity. The customer charges were therefore not subject to sales tax. As the service provider, however, the operator was the consumer of the electricity and other tangible property used in providing the service and owed sales or use tax on those purchases.

The result described for a kWh model was conditional: it assumed the operator obtained the required regulatory authority and bought electricity tax-free for resale. Electricity is tangible personal property under Georgia law, so those kWh charges and other charges necessary to complete the sale would be taxable unless a specific exemption applied.

What this means for you

EV-charging operators

The billing model matters. Under this ruling, charging for access or time was treated as a service, while charging by measured kilowatt-hours would be a retail electricity sale. A switch in pricing can change both customer tax collection and how the operator buys electricity.

Parking and property operators

If EV charging is offered as a time-based service, the provider may owe tax on the electricity and equipment it consumes rather than charging sales tax on the driver's fee. The ruling's result depended on the operator not being authorized or treated as a retail electric supplier.

Accountants and tax professionals

For a time-based model, treat the operator as the consumer of inputs. For an authorized kWh resale model, the operator may purchase electricity for resale but must collect tax on the retail electricity charge and other charges necessary to complete that sale.

Common questions

Q: Is time-based EV charging subject to Georgia sales tax?
A: No on the facts in this ruling. The Department did not treat the operator as making retail sales of electricity when it charged customers for time.

Q: Who pays tax on the electricity in the time-based model?
A: The charging operator. As a service provider, it is the consumer of tangible personal property used in providing the service.

Q: What if the operator charges by kilowatt-hour?
A: If it is legally authorized to sell electricity and buys it for resale, the kWh charge is a taxable retail sale of electricity, along with other charges necessary to complete the sale.

Q: Does the ruling provide electric-utility regulatory approval?
A: No. It assumes the operator would obtain the required Public Service Commission and territorial-service approvals before selling electricity by kWh.

Q: Can another charging operator rely on this ruling?
A: No. The ruling is limited to the requesting taxpayer and facts, including the billing method and regulatory status.

Citations and references

Statutes and rules:

• O.C.G.A. §§ 48-8-1 and 48-8-30 (sales and use tax imposition)
• O.C.G.A. §§ 48-8-2(31) and (37) (retail sale and electricity as tangible personal property)
• O.C.G.A. § 46-2-70(3) (definition of utility)
• O.C.G.A. § 46-2-7(4) (Public Service Commission jurisdiction)
• O.C.G.A. § 46-3-3(3) (electric supplier)
• O.C.G.A. §§ 46-3-1 through 46-3-15 (Georgia Territorial Electric Service Act)
• Ga. Comp. R. & Regs. r. 560-12-1-.14(7)(d) (service providers as consumers)

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2019-07

Original ruling text

Georgia Letter Ruling: LR SUT-2019-07
Topic: Retail Sale; Car Charging Stations
Date Issued: September 25, 2019
This letter is in response to your request for guidance on the application of Georgia sales and use tax to certain transactions entered into by “Taxpayer” in the state of Georgia. Facts Presented by Taxpayer Taxpayer owns and operates electric vehicle charging stations in Georgia. Customers pay for charging time, plus a
$____ session fee. Additional charges apply for “idling”, which is leaving the vehicle connected to the charger after the charge is complete (not including a specified grace period). The service is not sold by kilowatt-hour (kWh) at this time. Currently, no resale exemptions are being taken by Taxpayer on its purchases of electricity from the utility company. In the future, subject to utility regulatory approval, Taxpayer may begin to charge by kWh instead of charging for time. Issues 1.

What is the appropriate sales and use tax treatment for Taxpayer’s current transactions where Taxpayer charges customers at charging stations for time?

2.

What is the appropriate sales and use tax treatment for transactions where Taxpayer charges customers by kWh (assuming Taxpayer properly obtains all regulatory approval to charge by kWh)?

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 A “retail sale” is any sale, lease, or rental for any purpose other than for resale, sublease, or subrent. 2 “’Tangible personal property’ means personal property that can be seen, weighed, measured, felt, or touched or that is in any other manner perceptible to the senses. Tangible personal property includes electricity, water, gas, steam, and prewritten computer software.” 3 Charges for time vs. charges for electricity In Georgia, a “utility” is defined as “any person who supplies, furnishes or sells a natural gas or electric service.” 4 Anyone that provides a utility service is subject the jurisdiction of the Georgia Public Service Commission (“PSC”). 5 More particularly, an electric supplier is defined to be within the PSC’s jurisdiction. 6 Therefore if Taxpayer is “selling” electricity it would be subject to the jurisdiction of the PSC. If Taxpayer is “selling” electricity, it would be required to obtain a certificate of public convenience and necessity from the PSC prior to constructing, selling, or increasing or decreasing the capacity of a supply-side option. Further, the Georgia Territorial Electric Service Act, O.C.G.A. §§ 46-3-1 through 15, designates exclusive territories to utilities that furnish electricity at retail. Once a territory has been assigned to a utility, there are only limited exceptions that would allow another utility to sell within the territory. Based on the above, Taxpayer’s current activity does not constitute “selling” electricity such that Taxpayer falls within the jurisdiction of the PSC. Therefore, Taxpayer does not sell electricity at retail and Taxpayer’s charges for are not subject to the tax.

O.C.G.A. §§ 48-8-1 and 48-8-30.
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-2(37).
4
O.C.G.A. § 46-2-70(3).
5
O.C.G.A. § 46-2-7-(4).
6
O.C.G.A. § 46-3-3(3).
1
2

Georgia Letter Ruling: LR SUT-2019-07
Topic: Retail Sale; Car Charging Stations
Date Issued: September 25, 2019
Page 2 of 2
Were Taxpayer to comply with the relevant requirements and become subject to PSC jurisdiction and obtain the necessary certification to sell electricity, Taxpayer may purchase electricity tax-free for resale and make taxable retail sales of electricity. Such retail sales of electricity would be subject to sales tax (unless a specific exemption apllies). Service providers Service providers are deemed to be the consumers of tangible personal property used or consumed during the provision of a service. 7 Under its current practice of billing by time, Taxpayer is effectively a service provider and is liable (like any other purchaser at retail) for sales and use tax on all retail purchases of tangible personal property it purchases to be used and/or consumed in the provision of its service. Rulings 1.

The Department does not consider Taxpayer to be making retail sales of electricity, and thus its charges for time are not subject to the tax. Taxpayer is liable for sales and use tax on all tangible personal property it purchases at retail for use and consumption in the provision of its service.

2.

If Taxpayer were to legally and properly purchase electricity tax-free for resale and then charge retail customers by kWh for that electricity, such charges by kWh (and any other charges necessary to complete the sale) would be subject to the tax.

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.

7

Ga. Comp. R. & Regs. r. 560-12-1-.14(7)(d).