According to Georgia invoice law, businesses are subject to regulations regarding invoicing that are set forth in the state’s tax code. A business is legally required to issue an invoice for every taxable transaction in which it engages.
The law requires that it show such specific details as the date on which it is issued, a description of the goods or services that have been delivered to the buyer, the price of the goods or services and state sales taxes that have been collected in connection with the transaction. Of course, identification of the seller is presented on an invoice.
If an invoice were to contain any honest errors, of course, an invoice that corrects them should be issued. However, if a seller who generates an invoice, or a buyer who receives one, were to issue a fraudulent invoice or change an invoice intentionally in order to give themselves some kind of advantage, e.g., a lower state sales tax liability, then this could amount to fraudulent misrepresentation.
A lawyer consultation with a Georgia lawyer would help a person learn everything they need to know about invoices in Georgia and the state’s tax law.
What Is an Invoice?
An invoice is a legal document that serves as a record of a transaction or transactions between the seller and buyer of products or services. An invoice is important for accounting purposes and as an exchange of information between a buyer and seller. Basically, it is a notification that payment in a certain amount is owed for the delivery of certain specified goods or services.
If goods or services were purchased on any terms other than the immediate payment of cash, the invoice usually specifies the payment terms of the deal. It may also provide information about methods of payment that are acceptable to the seller.
Invoices may also be referred to as “bills of sale,” “debit notes,” or “sales invoices.” An invoice may be presented as an electronic record in the form of an email or some other type of electronic document, e.g., a text message.
A receipt is something different; it documents the receipt of payment by a seller of products or services.
An important item of information on an invoice is the state sales tax owed for a particular transaction. In Georgia, a state sales tax of 4% applies to all sales, leases, or rentals of tangible personal property and certain specific services.
Retailers are legally obligated to collect the state sales tax at the point of sale. They are then responsible for remitting the sales tax collected to the Georgia Department of Revenue. The sale of some products, e.g., prescription drugs and specific medical devices, are exempt from the state sales tax.
In addition, local jurisdictions in Georgia have the authority under Georgia law to collect additional sales taxes. These may vary from county to county and city to city. So, the total sales tax liability under combined state and local taxes may range from 6% to 8% depending on the locality in which a sales transaction takes place.
Are There Any Consequences for Invoice Fraud in Georgia?
When a company intentionally sends an invoice to a customer or client that contains false information intended to mislead the customer or the state Department of Revenue, it has committed invoice fraud. If an invoice contains incorrect information about products or services that were not in fact provided, for example, this would be a fraud. Or if the invoice were to be completely forged, this could lead to civil or even criminal liability for the issuer of the invoice.
Invoice fraud might also take the form of false billing. Invoice fraud occurs when a company sends a customer an invoice to pay for products or services that the company knows the customer never ordered. This is distinct from forgery in that the forgery of an invoice is typically committed by a third party, not the company that issued it.
False billing can also happen when an employee or independent contractor sends their employer a timesheet invoice for services that were never provided. A business could conceivably file a claim against a contractor for invoice fraud if the contractor bills the company for work that it never performed. The important point is that fraud crimes involve an intent to cheat or mislead another person in order to realize some kind of gain.
Civil fraud, however, can also be the result of negligence. This is the case if the misrepresentation is not made intentionally but negligently or recklessly. Negligent misrepresentation can also give rise to civil liability for damages.
A person could turn to the Consumer Protection Division (CPD) of the Georgia Attorney General’s office. The CPD only handles complaints that involve consumer transactions as opposed to business transactions. So they would have to be transactions that an individual enters into for their personal, family or household purposes.
Business-to-business transactions and investment transactions would not come within the definition of issues with which the CPD can assist an individual. But, again, if a person encounters fraudulent invoices as part of a consumer transaction, they might be able to seek the help of the CPD. However, the translation would also have to be part of a pattern of activity that involves unfair or deceptive acts which affect the general public and not just one individual.
A person who feels they have been the victim of a fraudulent invoice should consult a Georgia lawyer for guidance as to how to respond to the situation. Their attorney should be able to recognize if the conduct of the person or business that has produced a fraudulent invoice may qualify as criminal and warrants reporting to the local law enforcement agency.
In addition, the person’s lawyer can advise them about how to sue a company in a civil court of law where they would probably seek an award of money damages.
In addition, the failure to comply with Georgia’s sales and receipt tax laws can subject an individual or business to civil penalties and possibly even criminal charges. Businesses that do not collect sales taxes as required by law can be fined, charged interest on unpaid taxes and even charged with a criminal offense. Businesses must also forward the sales taxes they collect to the Georgia Department of Revenue.
The civil penalty that the state may charge for late payment of sales taxes is 5% of the amount of tax due for each month in which it goes unpaid up to a maximum of 25%. The Georgia Department of Revenue determines the rate of interest on unpaid tax liabilities.
If any failure to comply with sales tax law is willful, then the state may lodge misdemeanor criminal charges against an individual who does not pay. The punishment can be payment of fines and even incarceration. To avoid these consequences, businesses are encouraged to seek advice from tax professionals or the Georgia Department of Revenue to ensure compliance with state tax laws.
Are There Any Legal Defenses To Invoice Fraud in Georgia?
The main defense to a claim of invoice fraud would be to show that any type of inaccurate information on an invoice was an honest error and not intentional misrepresentation. The claimed perpetrator would argue that they did not intend to mislead anyone because, as noted above, fraud usually involves an intent to cheat or mislead on the part of the perpetrator in order to realize some kind of gain, usually financial.
Do I Need a Georgia Attorney for Help With Invoice Fraud Issues?
If you believe that you have been the victim of invoice fraud, you want to speak to a Georgia business lawyer. Your lawyer would be able to review the invoice in question and the facts of the situation and advise you as to your best course of action. If you are a business that issues invoices, you, too, may want to consult a Georgia business lawyer for a review of your invoicing practices to ensure that they comply with all applicable state laws.
