State Incentives
Incentives for qualified businesses
relocating to Georgia include:
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Job Tax Credit
Provides for a statewide job tax
credit for any business or headquarters of any such business engaged in manufacturing,
warehousing and distribution, processing, telecommunications, tourism, or research and development
industries, but does not include retail businesses.
For the purposes of
establishing threshold criteria, the state is divided into four "tiers" of eligibility, beginning
with those most economically disadvantaged (Tier 1) to those least disadvantaged (Tier 4). The job
creation requirement and the tax credit increase with the tier
designation.
Under this program, Pulaski County is designated
as a Tier 3 community as a whole for job tax credit purposes; however the Hawkinsville Industrial Park is
located in an Opportunity Zone which has the distinction of being designated as Tier 1. Qualified
companies locating or expanding in the Hawkinsville Industrial Park must create a minimum of 5 new full
time jobs in order to take advantage of the credit. Further, Pulaski County is a member of
theMiddle Georgia Regional Development
Authoritywhich allows for an
additional $500 per job credit under BEST. This brings the total tax credit to a total of $4,000 per full
time job created. These credits may be used to offset up to 50% of the company’s state tax liability and
there is a ten (10) year carry forward.
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Investment Tax Credit
Based on the same tiers as the Job
Tax Credit program. Allows a taxpayer that has operated an existing manufacturing or
telecommunications facility or manufacturing or telecommunications support facility in the state for
the previous three years (36 months) to obtain a credit against income tax liability. Generally, a
taxpayer may not take both the job tax credit and the investment tax credit for the same
project.
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Retraining Tax Credit
The retraining tax credit allows
some employers to claim certain costs of retraining employees to use new equipment, new
technology, or new operating systems. The credit can be worth 50% of the direct costs of retraining
full-time employees up to $500 per employee per approved retraining program per year. The
credit cannot be more than 50% of the taxpayer's total state income tax liability for
a tax year. Credits claimed but not used may be carried forward for 10
years.
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Childcare Tax Credits
Employers who provide or sponsor
child care for employees are eligible for a tax credit of up to 75% of the employers' direct costs. The
credit cannot be more than 50% of the taxpayer’s total state income tax liability for that taxable year. Any
credit claimed but not used in any taxable year may be carried forward for five
years from the close of the taxable year in which the cost of the operation was incurred. In
addition, employers who purchase qualified child care property will receive a credit
totaling 100% of the cost of such property. The credit is claimed at the rate of 10%
a year for 10 years. The qualified property credit may be carried forward for three years
from the close of the taxable year in which the qualified property is placed in
service, and the limitation on the use of the credit in any one year is
50%. Recapture provisions apply if the property is transferred or committed to a use other than child
care within 14 years after the property is placed in service. These two child care credits can
be combined.
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Research and Development Tax Credits
A tax credit is allowed for research
expenses for research conducted within Georgia for any business or headquarters of any
such business engaged in manufacturing, warehousing and distribution, processing, telecommunications,
tourism, or research and development industries. The credit shall be 10% of the
additional research expense over the “base amount,” provided that the business
enterprise for the same taxable year claims and is allowed a research credit under
Section 41 of the Internal Revenue Code of 1986. The credit may be carried forward 10 years
but may not exceed 50% of the business’s remaining Georgia net income tax liability after all
other credits have been applied for the current year. (Note that the base amount
must contain positive Georgia taxable net income for all years.)
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Small Business Growth Companies Tax Credits
A tax credit is granted for any business or
the headquarters of any such business engaged in manufacturing, warehousing and
distribution, processing, telecommunications, tourism, or research and development
industries having a Georgia net taxable income in the current year which is 20% or
more above that of the preceding year if its net taxable income in each of the two
preceding years was also 20% or more. The credit shall be the excess over 20% of the
percentage growth and shall not exceed 50% of the business’s remaining Georgia net
income tax liability after all other credits have been applied for the current year. The
credit is available to companies whose total tax liability does not exceed $1.5
million.
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Headquarters Tax Credits
Companies establishing their headquarters or
relocating their headquarters to Georgia may be entitled to a tax credit if the following criteria
are met: 1) headquarters is defined as the principal central administrative offices of a company; 2)
new jobs created at a new headquarters must be full-time (as defined by law and regulation) and must
pay above the average wage for Tier 1 counties, at least 105% of the average wage for Tier 2
counties, at least 110% of the average wage for Tier 3 counties, and at least 115% of the average
wage for Tier 4 counties; 3) within one year, a company must invest $1 million and create 50 jobs at
a new headquarters facility; and 4) the company must elect not to take the job or investment tax
credits. The credit is equal to $2,500 annually per new full-time job or $5,000 if the average wage
of the new fulltime jobs is 200% or more of the average wage of the county in which the new jobs are
located. The credits apply for five years beginning with the year in which jobs are placed in
service. The credit may be taken against Georgia income tax liability with any excess credit applied
against a company's withholding taxes. Credits may be carried forward for 10 years. Other
requirements include: 1) no new full-time jobs created after seven years from the close of the
taxable year in which the taxpayer first becomes eligible for the credit may receive credits; and 2)
the number of new full-time jobs shall be determined by comparing the monthly average of full-time
jobs subject to Georgia income tax withholding for the taxable year with the corresponding average
for the prior taxable year.
Provides for an exemption from the sales
and use tax for:
1. Machinery used directly in the
manufacture of tangible personal property when the machinery is bought to replace or upgrade machinery in a manfacturing
plant presently existing
in the state and machinery components which are purchased to upgrade machinery used directly in the manufacture
of tangible personal property in a manufacturing plant;
2. Machinery used directly in the
manufacture of tangible personal property when the machinery is incorporated as additional machinery for the first time into
a manufacturing plant
presently existing in this state;
3. Machinery which is used directly in the
manufacture of tangible personal property when the machinery is incorporated for the first time into a new
manufacturing plant
located in this state;
4. Machinery used directly in the
remanufacture of aircraft engines, parts, and components on a factory basis;
5. The sale or use of repair or
replacement parts, machinery clothing or replacement machinery clothing, molds or replacement molds, dies or replacement dies,
and tooling or
replacement tooling for machinery used directly in the manufacture of tangible personal property in a manufacturing plant
presently existing in this state. This exemption has been phased in over a 5-year period beginning on January
1, 2001 at 20% of the
purchase price per year with a limitation of $150,000 per part;
6. Overhead materials consumed in the
performance of certain contracts between the Department of Defense or NASA and a contractor engaged in manufacturing
(this exemption has been
phased in at a 25% increment rate each year from January 1, 1997 to January 1, 2004);
and
7. The sale of machinery, equipment, and
materials incorporated into and used in the construction or operation of a clean room of Class 100 or less in Georgia,
provided that such clean
room is used directly in the manufacture of tangible personal property.
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Primary Materials Handling
Purchases of primary material handling
equipment and racking systems that are used directly for the storage, handling, and
moving of tangible personal property in a new or expanding warehouse or distribution
facility when such new facility or expansion is valued at $5 million or more and does not
have greater than 15% retail sales are exempt from sales and use taxes.
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Ports Activity Job Tax and Investment Tax Credits
Businesses or the headquarters of
any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications,
tourism, or research and development that have increased their port traffic tonnage through Georgia ports
during the previous 12-month period by more than 10% over their 1997 base year port traffic, or by more
than 10% over 75 net tons, five containers or 10 20-foot equivalent units (TEU’s) during the previous
12-month period are qualified for increased job tax credits or investment tax credits. NOTE: Base year port
traffic must be at least 75 net tons, five containers, or 10 TEU’s. If not, the percentage increase in port
traffic will be calculated using 75 net tons, five containers, or 10 TEU’s as the base. Companies must meet
Business Expansion and Support Act (BEST) criteria for the county in which they are
located.
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