Small Business Taxes
Guide to Atlanta Small Business Tax
Everything you need to know about small business tax in Atlanta
Anyone starting a new business is probably focused on one important thing--how soon can you start turning profits? Understanding how your financial future will look is important to include in your business plan, especially if you’re attracting investors or applying for a small business loan.
Part of your revenue forecasts will include expenses like rent, insurance, and salaries. You also need to factor in taxes at a city and state level, so researching the business taxes in Atlanta and Georgia is crucial.
An Atlanta CPA can help you get started filing your local and state taxes and determining your business structure. If you’re looking to bring your accounting in-house, you also have options for software to manage tax documents and invoicing.
In addition to the varying city and state taxes determined by local government, all new businesses are required to file taxes at the federal level.
Atlanta City Taxes
The business license tax in Atlanta will be based on your yearly gross revenue. If your business executes more than one activity in the same location, whichever function has the higher tax class will be applied to decide your SIC code.
Your tax class is determined when you apply for an Atlanta business license. The chart below lists the most recent tax rates for Atlanta businesses:
Tax Class: Tax Rate (per $1,000)
In addition to the standard business license tax, other tax rates and insurance must be factored into your expenses.
Ad Valorem Taxes in Atlanta
Ad valorem taxes, or property taxes, are calculated at 100% of market value in Atlanta. The average current rate is 0.94%, but this can vary depending on your neighborhood.
The unemployment insurance rate in Atlanta can range from 0.04% to 8.1% and is taxed on the first $9,500 in earnings. New businesses in Atlanta are taxed a flat rate of 2.7% in the first year.
Sales and Use Taxes
The combined sales tax rate for Atlanta is 8%, a combination of Georgia state tax (4%), Cobb County tax (3%) and city tax (1%).
Worker’s Compensation Insurance
Worker’s compensation insurance is required in Atlanta for businesses comprised of 3 or more workers.
In addition to business taxes, you can have additional fees based on your zoning regulations. Atlanta is regulated by district zoning laws, so in addition to any extra taxes, it’s helpful to research the different regulations before establishing your business.
You can find the Atlanta Code of Ordinances and browse the entire ordinance online to find zoning regulations in your Atlanta neighborhood.
Georgia State Tax Types
Along with city taxes, you’ll apply for state taxes when you register your business in Georgia. Depending on your business structure, you can be subject to Georgia’s corporate income tax and net worth tax.
Corporations in Georgia are taxed at a flat rate of 6% of their federal income. In addition, corporations are subject to net worth tax based on stock and earnings.
S corporations differ from traditional corporations in that they are not subject to the federal income tax. Instead, individual shareholders are taxed on their shared of the corporation’s income. S corporations are also required to the pay the corporation net worth tax.
Limited Liability Companies
LLCs are also not required to pay state or federal income tax. Business income is passed through to the individual members who pay personal income taxes. It is possible to have your LLC classified as a corporation, in which case the LLC would be subject to Georgia’s 6% corporate income tax and the corporation net worth tax.
Partnerships and Sole Proprietorships
Partnerships and sole proprietorships are exempt from both Georgia’s corporate income tax and net worth tax. Instead, business income is distributed to the individual partners or sole proprietor, who then pay tax on the amount on their federal and state tax returns.
Registering a Business for Taxes in Georgia
Starting a business in Atlanta requires registering for a Tax ID number, permits, and business licenses in Georgia. You can register online through Georgia Tax Center. To apply for a State Taxpayer Identification Number, submit your State Tax Registration Application (Form CRF-002) either by mail or online
Before you apply, make sure to have the following items hand:
All businesses, in and out of Georgia, are subjected to federal taxes. Federal taxes include:
Understanding Atlanta small business tax is the first step toward making a profit in your new business. Keeping organized records of your tax and payroll documents can make filing for Atlanta and Georgia taxes easy each year. Use an Atlanta accounting agency or accounting software to make sure you have everything in line.