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Sales Tax on Labor: In Georgia, Not All is Created Equal

author photo of Lauren Stinson

In Georgia, repair labor is not taxable if it is separately stated on the invoice. However, the parts sold in conjunction with the repair are subject to sales tax. But what about fabrication labor? What in the world is that? And why is it taxable?

What is Fabrication Labor?

Fabrication labor is the manpower needed to make a new item or change an existing item into a new item. Fabrication is a process that changes the form or state of tangible personal property.

Georgia’s Approach to Fabrication Labor:

In Georgia Tax Code, the definition of "sale" includes the fabrication of tangible personal property for consumers who directly or indirectly furnish the materials used. Consequently, the taxable sales price includes fabrication labor, even if separately stated. Tax is imposed on the total charge for the fabrication or production of tangible personal property on a special order.


If a company orders a custom-made table for their conference room, tax should be collected on the total cost of the table, including labor, even though charges for labor may be segregated from the cost of the materials. Another example is that tax would apply to charges made by a tailor who makes an article of wearable apparel from material furnished by the customer.

When Fabrication Labor Applies:

Fabrication labor applies to many types of businesses in Georgia. Persons regularly engaged in the fabrication or production of tangible personal property for sale at retail must remit the tax on the sales price of such property.

Georgia’s sales tax laws do not treat repair labor and fabrication labor the same, and that often results in some confusion. Repair labor is exempt from sales tax while fabrication labor is taxable. For more information about the taxability of repair labor in Georgia, read my blog, Tax on Repair Labor in Georgia: Sales Tax Savings Possible!

If you’ve encountered any problems with the taxability of fabrication labor, share your story. Do you have questions about Georgia’s tax code regarding this type of labor?

About the Author: Lauren Stinson,CMI, is Principal and National Leader - Sales & Use Tax at Cherry Bekaert LLP; a national CPA and consulting firm ranked as one of the top 25 in the country. Previously, Lauren was Owner and President of Windward Tax, a sales and use tax consulting firm. She has more than 25 years experience working with manufacturers on sales and use tax issues. Lauren is pleased to share her expertise with SalesTaxSupport readers as the Manufacturing contributor in SalesTaxSupport’s Industry blog, as well as the Georgia Sales Tax contributor in the States blog.

Comments or questions may be submitted by using the on-page "Comment" feature, subject to disclaimer at bottom of page. More specific questions or requests may be sent to Lauren directly using the orange "REQUEST" link on Lauren's Firm Profile page.

Other recent “Georgia (GA)” posts by Lauren Stinson, CMI:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.


4 Responses to Sales Tax on Labor: In Georgia, Not All is Created Equal

  • Posted by Author photo of Lauren Stinsonlaurenstinson on December 12, 2017 12:07pm:


    Form E-595E is the streamline sales and use tax agreement certificate of exemption. Many states, including GA, have joined the streamline sales tax agreement requirements to simplify tax procedures for companies who do business in multiple states. This is one of the forms that came out of that agreement and GA is one of the states that does accept this certificate. This form can be used in any of the member streamline states. As long as the form is properly filled out entirely, as a GA business you can accept this as your proof for exemption and not charge sales tax. It is the seller's responsibility to make sure the form is filled out entirely and it is the purchaser's responsibility to use the form for an actual exempt purchase.

    I hope this helps.


  • Posted by Zann on November 8, 2017 11:45am:

    State of GA - we were provided a GA sales tax exempt certificate from a company in GA form ST5 - 10/2016. They marked box 4 - ends with a sales and use tax number is not required for this exemption. I contacted the sales tax dept and they told me they still have to be registered with the state and have a number even though they don't have to provide it. When asked who the company was they told me they are not registered with the state and therefor we have to charge them sales tax. I am confused and ? the form and the reply i received twice from the sales tax dept. The customer states this is how they do business and have done so for a long time?

    • Posted by Author photo of Lauren Stinsonlaurenstinson on December 13, 2017 10:25am:


      When accepting a ST-5 form from a customer who has checked box 4, they do not need to provide the sales and use tax number. As long as the form is filled out entirely you can accept the form in good faith. I spoke with an auditor I work with on several projects and she stated this was true. Georgia is a good faith state.


  • Posted by Zann on November 8, 2017 11:41am:

    We received a E-595E form Streamlined Sales & Use Tax - Certificate of Exemption - from a company in NC . We had charged the sales tax (Atlanta, GA) for a product they picked up from our warehouse but they say this covers them not having to pay sales tax. I have never heard of this form can you assist? I do agree if they had a GA sales exempt number then based on product purchased it would be sales tax exempt.

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