Does Georgia tax the gain on my sale at a special capital gains rate?

No. Georgia has no separate capital gains regime and no brackets; the gain is taxed as ordinary income at the state's flat rate, which the Department of Revenue puts at 4.99% for 2026. The Department's updates page publishes 4.99% and no lower rate for a later year, so confirm the rate for the year the gain is actually recognized rather than assuming a step-down is coming. If you are 62 or older, ask your CPA about Georgia's retirement income exclusion, which counts capital gains toward a single annual allowance shared with pensions, annuities, interest, dividends, net rental income and royalties, so the gain competes with your other investment income rather than getting an allowance of its own. Whether gain on a materially participated S corporation or LLC interest is treated as capital gains income for that purpose, or as earned income, is not settled in the Department's published guidance. This firm does not give tax advice.

What does an out-of-state buyer have to put in place before it can collect a management fee in Georgia?

Its acquiring entity needs its own Georgia firm broker's license with a named broker, and to apply for that as a non-resident firm it first needs a Certificate of Authority from the Georgia Secretary of State, because the firm application asks for it and for the control number. HB 399 also repealed the exemptions that let owner-affiliated managers run their own portfolios unlicensed, so a buyer that has never held a Georgia license has nothing to fall back on while the firm application is pending.

Will a Georgia buyer ask me for a five-year non-compete?

Probably at least that, and possibly longer if you are taking a note or an earnout. O.C.G.A. § 13-8-57(d) presumes reasonable a sale covenant running the longer of five years or the period over which the buyer is still paying you, so a longer payment tail extends the restriction alongside it. The covenant belongs in the purchase agreement rather than in a post-closing employment agreement, where the two-year presumption in subsection (b) would govern the same person. The presumption is rebuttable, so the drafting still has to be defensible.

My community association managers hold Georgia CAM licenses. What happens to them at closing?

If the deal changes the broker their licenses sit under, and an asset purchase always does, each of them re-affiliates that day. Rule 520-1-.05(2)(a) requires every active community association manager to be licensed under an active Georgia broker and prohibits being licensed under more than one at a time, so there is no overlap period to lean on. The licenses belong to the managers rather than to the company, so a manager who declines to re-affiliate leaves the buyer short a licensed person on that portfolio.

Do I need a licensed broker to sell my own management company in Georgia?

It depends on what moves with the business. GREC Rule 520-1-.12 requires a Commission license where the sale involves the transfer of any interest in real property, and it names leasehold interests, or where all or part of the fee is contingent on a real estate transfer. Either condition is enough on its own. A sale of the management book alone touches neither; assigning your office lease touches the first.

Property Management in Georgia

The Georgia licensing exemption a buyer will quote you no longer exists.

Georgia moved its licensing line on July 1, 2025, and the Real Estate Commission's own rule text still describes one of the exemptions the legislature repealed that day. A buyer's counsel who reads the rule and builds an operating structure on it is relying on law that ended in 2025. Three other things change at the Georgia line: a separate license class for community association managers that cannot sit under two brokers at once, a sale covenant presumption tied to how long the buyer keeps paying, and a tax lien that survives the cap on what a buyer can be made to pay personally.

Atlanta / Savannah / Augusta / Columbus

HB 399 closed two exemptions and the rule still recites one

HB 399, Act 315 of the 2025 session, struck O.C.G.A. § 43-40-29(a)(8) in its entirety, effective July 1, 2025. That was the exemption letting someone employed full time by a property owner provide property management or community association management services on that owner's property without a license. The same act struck the affiliate language out of § 43-40-29(a)(7), the words that had let a management company whose principals held a controlling ownership interest in the managed property operate it unlicensed. Both routes closed on the same day, and neither had ever reached doors owned by unrelated third parties.

Rule 520-1-.05(2)(g) puts property management and community association management services inside brokerage activity, and requires every active licensee performing them to do so as a broker or on behalf of a real estate broker. What survives on the owner side is § 43-40-29(a)(1), which covers an owner, the spouse or a family member of an owner, a general partner of a limited partnership, an officer of a limited liability company, a lessor, a prospective purchaser and their regular employees, acting on property that owner owns, leases or is acquiring, together with the renumbered exemption for a full-time employee of a community association. A buyer that ran on the repealed exemptions now has to stand up a licensed platform to operate anything at all, including the book it acquires.

Rule 520-1-.05(2)(h) still recites the repealed employee exemption in the present tense on the Secretary of State's rules site. A buyer's counsel who reads the rule, finds the exemption and builds an unlicensed operating structure on it is relying on law that ended in 2025, and the fact that the citation loads and reads cleanly is why the error gets past review.

The same act cut the other way. New O.C.G.A. § 44-7-25 requires a landlord that is not a Georgia resident and owns or operates single-family or duplex residential rental property in the state to employ a broker licensed under Chapter 40 of Title 43, and where that broker does not live in Georgia, to have the broker employ at least one person located in Georgia responsible for receiving, coordinating, managing and responding to tenant communications. Subsection (b) removes the § 43-40-29(a)(7) and (a)(8) exemptions for those landlords. The statute reaches single-family and duplex rentals specifically, so it lands on the scattered-site residential half of a book and leaves a multifamily or commercial one untouched. A management company whose client landlords are largely out of state is selling something a statute now requires those landlords to buy.

A second Commission rule decides who may broker the sale itself, and it turns on real estate rather than on the business. Unless a person is otherwise excepted from licensure by § 43-40-29, Rule 520-1-.12 requires a Commission license where the sale of a business involves the transfer of any interest in real property, expressly including a leasehold or ownership interest. It separately requires one where all or part of the fee is contingent on the transfer of an interest in real estate. Either condition is enough on its own, and the common mistake is reading them as one.

The word doing the work is leasehold. A sale of the management book by itself, the contracts and the staff, transfers no interest in real property and is not licensed activity in Georgia. Assign the target's office lease as part of the deal and the transaction has transferred a leasehold interest, which fires the first condition however the advisory fee is written. The rule also forecloses the obvious workaround: an unlicensed business broker and its associates may not negotiate, attempt to negotiate, or assist in procuring prospects for such a sale and then secure a person licensed by the Commission to approve the transaction afterward. Most property management companies sit in leased space.

Change the firm's broker and every CAM license re-affiliates that day

Georgia licenses community association managers as their own class, through the same commission that licenses brokers. Rule 520-1-.04(5)(a) requires a CAM applicant to pass the Commission's examination and to submit evidence of completing the Community Association Manager's Prelicense Course or an approved equivalency, which Rule 520-2-.04(4)(b) sets at a minimum of 25 instructional hours covering Georgia common-interest ownership law, forms of ownership, management agreements, agency and trust accounting. Buyers from states that do not license this work often arrive not knowing the credential exists.

Rule 520-1-.05(2)(a) is where it becomes a closing mechanic. Every active community association manager, like every associate broker and salesperson, must be licensed under an active Georgia broker, and cannot be licensed under more than one Georgia broker at a time. On the day the licenses move to a new broker, every CAM in the company re-affiliates, and the paperwork either landed or it did not.

That turns the association side of a Georgia property management book into a retention problem with a filing attached. The credentials belong to the managers, not to the company, so a manager who declines to re-affiliate takes theirs out the door and the buyer is short a licensed person on the portfolio the following morning. Diligence should confirm that each manager's affiliation on file is current and names the target's broker.

The buyer's usual answer is to import a manager, and nobody should price the credential as a wall before checking. Rule 520-1-.05(2)(g) puts CAM services inside brokerage activity, which is the basis on which buyers plan to cover the portfolio with an existing Georgia licensee. Confirm that reading, and any substitution of another state's prelicense coursework, with GREC rather than assuming either in a model. What the buyer cannot do is import anyone and skip the affiliation step, because the constraint is the broker the license sits under, not the hours behind it.

A covenant that runs as long as the buyer keeps paying

The Georgia Restrictive Covenants Act treats an owner selling a business and an employee leaving a job as two different problems, and the gap between them is wider than most sellers expect. O.C.G.A. § 13-8-57(b) presumes unreasonable any post-employment restraint longer than two years. Subsection (d) applies instead where the covenant is enforced against the owner or seller of all or a material part of a business's assets, the shares of a corporation, a partnership interest, a limited liability company membership, or an equity interest or profit participation of any other type. For those, the statute presumes reasonable a restraint lasting the longer of five years or the period during which sale payments are still being made to that owner or seller, measured from the termination or disposition of the interest.

Read the second half of that clause again, because summaries routinely drop it. The presumptively reasonable period is not capped at five years. A covenant that runs longer than five years alongside a note that runs just as long sits inside the presumption rather than outside it. So a seller negotiating a longer earnout or installment note is negotiating a longer non-compete at the same time, whether or not anyone at the table says so.

Two things follow for drafting. The covenant belongs in the purchase agreement, tied to the consideration, rather than in a post-closing employment agreement where subsection (b)'s two-year presumption would govern the same person. And because the Act defines a seller to include an owner of a controlling interest, meaning an equity or ownership interest carrying 25 percent profit participation or voting control, an affiliate of that owner, or an executive employee of the business who receives consideration in connection with the sale, a Georgia management company can put its senior managers inside the same longer presumption by giving them a slice of the proceeds. In a business whose value is doors under management and the owner relationships behind them, that is the retention instrument that actually holds.

Two limits cut against both points. The presumptions are rebuttable: in Baldwin v. Express Oil Change, LLC, 87 F.4th 1292 (11th Cir. 2023), the court set out the five-year rule, then vacated the injunction and sent the case back so the district court could weigh rebuttal, and Baldwin is a federal court predicting Georgia law rather than a Georgia appellate holding. Georgia's blue-pencil remedy is discretionary, not automatic. O.C.G.A. § 13-8-54(b) says a court may modify an overbroad restraint and grant only the relief reasonably necessary, and the Supreme Court of Georgia noted in Motorsports of Conyers, LLC v. Burbach, 317 Ga. 206 (2023), that the word may means Georgia courts are not required to blue-pencil at all. A Georgia covenant drawn too wide may have a salvage route, at the court's discretion. Draft it as though it does not.

Georgia caps the buyer's personal liability and not the lien

Two Georgia statutes put the seller's unpaid tax onto the buyer. O.C.G.A. § 48-8-46 covers sales tax and § 48-7-106 covers payroll withholding, and both cap what the purchaser can be made to pay personally at the total purchase money. Section 48-8-46 then goes past its own cap: the property being transferred remains subject to the full amount of the tax lien arising from the former owner's delinquencies, whatever the purchase price was.

A buyer told its exposure ends at what it paid has been told half of the provision. Department of Revenue guidance was blunter still on the other half, that no contract provision between seller and purchaser eliminates the liability. Where the deal is an asset purchase, the management agreements are the property carrying the lien, which makes the size of the check something other than a ceiling.

For a fee-only management company the half that reliably bites is withholding, because the business has run a Georgia payroll for as long as it has had staff. Whether the sales tax half reaches it at all depends on whether the target carries a Georgia sales tax registration and taxable activity behind it, which is worth establishing before anyone sizes a holdback against a statute that may not touch the business. Where the target is a registered dealer, § 48-8-46 puts a deadline on the seller as well: a final return and payment within 15 days after selling or quitting the business.

The Department issues a tax clearance letter through the Georgia Tax Center, and only the taxpayer or a party holding a signed disclosure authorization can request one, so a buyer cannot pull it on its own. It does not issue while a balance is outstanding or a return is unfiled. One late Georgia filing is enough to hold it.

Questions Georgia sellers ask

Does Georgia tax the gain on my sale at a special capital gains rate?: No. Georgia has no separate capital gains regime and no brackets; the gain is taxed as ordinary income at the state's flat rate, which the Department of Revenue puts at 4.99% for 2026. The Department's updates page publishes 4.99% and no lower rate for a later year, so confirm the rate for the year the gain is actually recognized rather than assuming a step-down is coming. If you are 62 or older, ask your CPA about Georgia's retirement income exclusion, which counts capital gains toward a single annual allowance shared with pensions, annuities, interest, dividends, net rental income and royalties, so the gain competes with your other investment income rather than getting an allowance of its own. Whether gain on a materially participated S corporation or LLC interest is treated as capital gains income for that purpose, or as earned income, is not settled in the Department's published guidance. This firm does not give tax advice.
What does an out-of-state buyer have to put in place before it can collect a management fee in Georgia?: Its acquiring entity needs its own Georgia firm broker's license with a named broker, and to apply for that as a non-resident firm it first needs a Certificate of Authority from the Georgia Secretary of State, because the firm application asks for it and for the control number. HB 399 also repealed the exemptions that let owner-affiliated managers run their own portfolios unlicensed, so a buyer that has never held a Georgia license has nothing to fall back on while the firm application is pending.
Will a Georgia buyer ask me for a five-year non-compete?: Probably at least that, and possibly longer if you are taking a note or an earnout. O.C.G.A. § 13-8-57(d) presumes reasonable a sale covenant running the longer of five years or the period over which the buyer is still paying you, so a longer payment tail extends the restriction alongside it. The covenant belongs in the purchase agreement rather than in a post-closing employment agreement, where the two-year presumption in subsection (b) would govern the same person. The presumption is rebuttable, so the drafting still has to be defensible.
My community association managers hold Georgia CAM licenses. What happens to them at closing?: If the deal changes the broker their licenses sit under, and an asset purchase always does, each of them re-affiliates that day. Rule 520-1-.05(2)(a) requires every active community association manager to be licensed under an active Georgia broker and prohibits being licensed under more than one at a time, so there is no overlap period to lean on. The licenses belong to the managers rather than to the company, so a manager who declines to re-affiliate leaves the buyer short a licensed person on that portfolio.
Do I need a licensed broker to sell my own management company in Georgia?: It depends on what moves with the business. GREC Rule 520-1-.12 requires a Commission license where the sale involves the transfer of any interest in real property, and it names leasehold interests, or where all or part of the fee is contingent on a real estate transfer. Either condition is enough on its own. A sale of the management book alone touches neither; assigning your office lease touches the first.

Where these facts come from

Everything above that is a rule rather than a judgment is listed here with its publisher and the date it was checked. Licensing, tax and non-compete rules change, sometimes without much notice. None of this is legal or tax advice, and it is not a substitute for your own counsel and CPA.

HB 399 (Act 315, 2025 session), effective July 1, 2025, struck O.C.G.A. § 43-40-29(a)(8) in its entirety and struck the affiliate language from § 43-40-29(a)(7), which had exempted management through a person engaged by the owner full time or through a management company whose principals hold a controlling ownership of the property. Section 43-40-29(a)(1) continues to exempt a person acting as owner, as the spouse of an owner, as the family member of an owner, as general partner of a limited partnership, as an officer of a limited liability company, as lessor, or as prospective purchaser, or their regular employees, performing acts on property owned, leased or to be acquired by that owner. The act enacted O.C.G.A. § 44-7-25, requiring a landlord that is not a resident of Georgia and owns or operates single-family or duplex residential rental properties in the state to employ a broker licensed under Chapter 40 of Title 43, and where that broker does not reside in the state, requiring the broker to employ at least one person located within the state responsible for receiving, coordinating, managing and responding to communications from that landlord's tenants; subsection (b) disapplies the § 43-40-29(a)(7) and (a)(8) exemptions to those landlords.
Office of the Governor of Georgia, signed legislation, HB 399 (Act 315). Checked 2025-07-01.
Read from the signed enrolled bill. Confirm the codified text with Georgia counsel; the Real Estate Commission's own rules had not been conformed to these amendments as of the date this page was written.
Rule 520-1-.05(2)(g) provides that real estate brokerage activity includes sales, leasing, community association management services, property management services and the activities identified under the definition of broker in O.C.G.A. § 43-40-1, and that every active licensee performing it must do so as a broker or on behalf of a real estate broker. Rule 520-1-.05(2)(a) requires every active community association manager, associate broker and salesperson to be licensed under an active Georgia broker and prohibits being licensed under more than one Georgia broker at a time. Rule 520-1-.05(2)(h) describes an exception allowing an unlicensed full-time employee of an unlicensed person to perform real estate brokerage activity on property owned by that employer.
Georgia Secretary of State, Ga. Comp. R. & Regs. r. 520-1-.05. Checked 2026-09.
Subsection (2)(h) describes the statutory exemption at O.C.G.A. § 43-40-29(a)(8), which HB 399 repealed effective July 1, 2025. The rule text has not been updated and should not be read as current law on that point. Subsection (2)(g) places community association management inside brokerage activity; it does not state that a salesperson license by itself authorizes that work, and the page does not assert that it does.
An acquiring corporation, limited liability company or partnership must obtain its own Georgia firm broker's license, with a named broker, and, for a non-resident firm, a Georgia Secretary of State Certificate of Authority together with the Secretary of State control number.
Georgia Real Estate Commission, Open a Firm application. Checked 2026-09.
The form carries a 01.2021 revision date. Its fee amounts and stated processing times are deliberately not used here and should be confirmed against GREC's current firm application before any closing calendar is built around them. Nothing in this source addresses client trust accounts, and no trust-account requirement is claimed on this page.
Rule 520-1-.04(5)(a) requires a community association manager applicant to pass the Commission's examination and to submit evidence of successful completion of the Community Association Manager's Prelicense Course or an approved equivalency.
Georgia Secretary of State, Ga. Comp. R. & Regs. r. 520-1-.04. Checked 2026-09.
Rule 520-2-.04(4)(b) sets the Community Association Manager's Prelicense Course at a minimum of 25 instructional hours covering Georgia common-interest ownership law, forms of ownership, management agreements, agency and trust accounting.
Georgia Secretary of State, Ga. Comp. R. & Regs. r. 520-2-.04. Checked 2026-09.
Applying the Georgia Restrictive Covenants Act, Baldwin v. Express Oil Change, LLC, 87 F.4th 1292 (11th Cir. 2023) sets out that O.C.G.A. § 13-8-57(b) presumes unreasonable any post-employment restraint longer than two years, while § 13-8-57(d) applies to a covenant enforced against the owner or seller of all or a material part of the assets of a business, the shares of a corporation, a partnership interest, a limited liability company membership, or an equity interest or profit participation of any other type, and requires a court to presume reasonable in time any restraint lasting the longer of five years or the period during which payments are being made to the owner or seller as a result of the sale, measured from the date of termination or disposition of that interest, and to presume unreasonable anything longer. The Act defines seller at § 13-8-51 to include an owner of a controlling interest, meaning an equity or ownership interest involving 25 percent profit participation or voting control, an affiliate of that owner, or an executive employee of the business who receives consideration in connection with a sale. The presumptions in § 13-8-57 are rebuttable, and the court vacated the injunction and remanded for the district court to consider rebuttal in the first instance.
U.S. Court of Appeals for the Eleventh Circuit. Checked 2026-09.
A federal court predicting Georgia law at the preliminary injunction stage, not a Georgia appellate holding. Note that § 13-8-57(d) keys the presumption to the longer of five years or the payment period; summaries that quote the opinion with that phrase elided state a flat five-year rule the statute does not contain.
Motorsports of Conyers, LLC v. Burbach, 317 Ga. 206 (2023) holds that the Georgia Restrictive Covenants Act expressly allows blue-penciling: under O.C.G.A. § 13-8-54(b) a court may modify a restraint that violates the Act and grant only the relief reasonably necessary to protect the proponent's legitimate business interests and achieve the original intent of the parties. Footnote 6 records that the provision's use of the word may indicates the court may exercise discretion in deciding whether to blue-pencil, and that Georgia courts are not required to do so. The decision also holds that where a covenant is unreasonable under Georgia law it is against public policy and the court may not apply foreign law to enforce it.
Supreme Court of Georgia. Checked 2026-09.
The Court framed its choice-of-law holding for restrictive covenants in employment contracts. No Georgia appellate decision has yet applied it to a sale-of-business covenant in a purchase agreement, so the outcome for a Delaware or New York choice-of-law clause in an acquisition agreement is not settled.
Department of Revenue guidance stated that a purchaser of a business, including a purchaser of a portion of the business, its inventory or its equipment, may be held responsible for the business's outstanding sales or withholding tax liabilities; that no contract provisions between a seller and a purchaser can eliminate this liability; that where balances are outstanding the purchaser must withhold the outstanding amount of the purchase price and may release the funds only when clearance is issued; that the purchaser's personal liability is limited to the amount of consideration paid for the business; and that clearance will not issue where there is an outstanding tax balance or unfiled tax returns. It cited O.C.G.A. § 48-8-46 for sales tax and O.C.G.A. § 48-7-106 for withholding tax. Section 48-8-46 further provides that the property being transferred remains in all cases subject to the full amount of the tax lien arising from the delinquencies of the former owner, and requires the dealer to file a final return and pay within 15 days after selling or quitting the business.
Official Code of Georgia Annotated §§ 48-8-46 and 48-7-106, as described by the Georgia Department of Revenue. Checked 2025-09-25.
The Department has removed this guidance page from its live site; the link is an Internet Archive capture and is a secondary, withdrawn description rather than current agency guidance. The two statutes remain in force and are the operative authority. The full-lien sentence and the 15-day final return deadline come from § 48-8-46 itself, and that deadline runs against the dealer, which is why the page states it conditionally. Nothing here should be read as saying statutory successor liability attaches to a purchase of corporate shares; § 48-8-46 reaches the purchaser of a business or stock of goods or equipment.
The Department of Revenue issues a tax clearance letter, requested through the Georgia Tax Center by the taxpayer or a party holding a signed disclosure authorization.
Georgia Department of Revenue. Checked 2026-09.
The Department's current product is a tax clearance letter. The word certificate survives only in the statutory text and in the withdrawn successor liability guidance.
Unless otherwise excepted from licensure by O.C.G.A. § 43-40-29, a person who brokers the sale of a business must hold an appropriate license issued by the Commission if the sale of the business involves the transfer of any interest, including but not limited to a leasehold or ownership interest, in real property. A business broker and any of the business broker's associates who do not hold licenses issued by the Commission may not negotiate or attempt to negotiate or assist in procuring prospects for a business sale where that sale involves the transfer of any interest in real property, or where the payment of all or part of a commission or fee is contingent upon the transfer of an interest in real estate, and may not perform those acts and then secure a person licensed by the Commission to approve that transaction.
Georgia Secretary of State, Ga. Comp. R. & Regs. r. 520-1-.12 (Business Brokerage). Checked 2026-09.
Under 2026 Income Tax Changes, the Department states that the Georgia income tax rate has been reduced to a flat rate of 4.99%.
Georgia Department of Revenue. Checked 2026-09.
This is a rolling annual updates page that the Department overwrites each year, so the quoted figure will describe a later tax year at the same URL. Confirm the rate for the tax year in which the gain is actually recognized, and note that a rate quoted for an earlier tax year is not wrong, only for a different year.
Georgia's retirement income exclusion is available to taxpayers who are 62 or older, or permanently and totally disabled regardless of age. The qualifying items are income from pensions and annuities, interest income, dividend income, net income from rental property, capital gains income, income from royalties, and a limited amount of earned income. For married couples filing joint returns with both members receiving retirement income, the maximum adjustment may be up to twice the individual exclusion amount.
Georgia Department of Revenue. Checked 2026-09.
The exclusion is a single annual cap covering all of the listed categories together, not a separate allowance for the sale gain. The dollar amounts sit in the Form IT-511 instruction booklet and in O.C.G.A. § 48-7-27 rather than on this page and are deliberately not quoted here. The Department's published material does not address how gain on the disposition of a materially participated S corporation or limited liability company interest is characterized for this purpose.

Page last reviewed 2026-09-06.

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