Georgia Tax Credits

The Georgia business tax environment benefits companies in so many ways. Our corporate tax rate has been kept low for 50 years, and your tax obligation is based on one factor: your sales inside Georgia. When you learn about our job tax credits and other incentives, you’ll know why so many view Georgia as good for business.

To get help with specific tax questions for a business in Georgia, contact the Georgia Department of Revenue.

“Georgia understands our needs; they proactively find ways to help, and they ultimately are partners in our success.”

A rock-solid foundation of consistent policy

Here’s why you’ll like the Georgia business tax environment:

• We were first in the Southeast to adopt single-factor apportionment – so your corporate tax is calculated on one factor: the sales you make inside Georgia.
• Georgia has no “throwback rule” – your sales made elsewhere won’t be thrown back here for taxation.
• Georgia lowers its corporate tax rate to 5.75% effective January 2019. For 50 years, it remained at 6%.
• Georgia’s Job Tax Credit has been in place for 25 years; the Quality Jobs Tax Credit has been implemented for 15 years. Both are flagship incentives.
• In certain areas your business can apply some tax credits to cover state payroll withholding liability.

Others have taken notice of Georgia’s fiscal responsibility and commitment to business:

• For 20 years, Georgia has maintained a AAA rating from all three major credit agencies (Fitch, Moody’s, Standard & Poor’s).
• Georgia is No. 1 in Cooperative & Responsive State Government (Area Development, 2018).
  

The Job Tax Credit: A flexible (and invaluable) tool

Creating new jobs in Georgia is a good way to reduce (and potentially eliminate) your company’s corporate tax liability.

Our Job Tax Credit gives you a credit ranging from $1,250 to $4,000 per year for 5 years for every new job created. In certain areas, the credit can also lower your payroll withholding obligations.

• The new jobs must be in a specific industry sector, such as manufacturing, distribution or data processing. Or a project could be a headquarters of one of the specific industries.
• You must create a minimum number of jobs within a year. The number depends on your company’s tier or special zone (more on this below).
• To keep earning the credit for all 5 years, the jobs you create must be maintained for all of those years.
  

Here’s more on how the Job Tax Credit in Georgia works:

• Timetable: Once your project qualifies, the clock starts ticking on a 5-year window. Each new job created may earn Job Tax Credits each year for 5 years.
• Value: The credit value depends on where the new jobs are located. Counties with the highest levels of economic distress are classified as Tier 1 counties and earn the highest credits: $4,000 per new job, per year, for 5 years. New jobs in counties with less economic distress earn lower credits: $1,250 per new job per year. (Tiers are defined each year.)
• Special zones: These smaller areas are defined as Military Zones, Less Developed Census Tracts and Georgia Opportunity Zones (which differ from the new Federal Opportunity Zones). A new job created in these zones may earn a credit of $3,500 per year for 5 years, no matter the county location.
• Payroll withholding: Job Tax Credits may be used to lower payroll withholding obligations if the job is created in a special zone or a Tier 1 county.
  

Business Incentives Map

“The state of Georgia truly understands business better than most other states. From the start, we appreciated and recognized the business-friendly community.”

PPE Manufacturing Tax Credit

Georgia’s fight against the COVID-19 pandemic includes the creation of a new Personal Protection Equipment(PPE) Tax Credit Bonus that rewards job creation that expands the manufacture of PPE and hand sanitizer in Georgia.

When eligible, PPE manufacturers can claim an additional $1,250 in Job Tax Credits per job per year for five years. Claimed but unused PPE credits have a 10-year carry forward.

Only those jobs dedicated to manufacturing PPE or hand sanitizer may qualify. If the facility ceases to manufacture PPE or hand sanitizer, or if the jobs are no longer involved in manufacturing PPE or hand sanitizer, then the company may no longer claim the PPE bonus for those jobs. Eligibility extends to jobs dedicated to the manufacture of:

Personal protective equipment

• Any protective clothing, helmets, gloves, face shields, goggles, facemasks, hand sanitizer, and respirators or other equipment designed to protect the wearer from injury or to prevent the spread of infection, disease, virus, or other illness. Such term shall include equipment identified under 29 C.F.R. Section 1910, Subpart I.

Hand sanitizer

• Any hand antiseptic, hand rub, soap, or agent applied to the hands for the purpose of removing common pathogens, including, but not limited to, hand cleaners and sanitizers provided for under 7 C.F.R. Section 3201.18.

The Port Tax Credit Bonus: Busy is good for business

If your company increases imports or exports through a Georgia port by 10% – and if you qualify for the Georgia’s Job Tax Credit or Investment Tax Credit – you’re also eligible for the Port Tax Credit Bonus.

To qualify, your base port traffic amount must equal at least 10 TEU (Twenty-Foot Equivalent) units. The 10% increase can be measured against the previous year or base year.

When paired with Georgia’s Job Tax Credit, the port credit value amounts to an additional $1,250 credit per new job per year – for 5 years – as long as both the job and the higher level of port traffic are maintained.

For example, a company creating new jobs and increasing port activity at the required thresholds in a Tier 1 location would be eligible for $5,250 per job per year for 5 years in total tax credits. Here’s the math: $4,000 Job Tax Credit + $1,250 Port Tax Credit Bonus. (Scroll above to see the map for tier locations.)

A different kind of break: Georgia’s Quality Jobs Tax Credit

Companies in all industries in Georgia can qualify for the Quality Jobs Tax Credit. If the jobs your company creates pay at least 10% above the average wage of the county in which they’re located, they’re considered “high-paying jobs,” and you may qualify for an even higher jobs tax credit.

Here’s how it works:

• To qualify: Create at least 50 of these high-paying jobs in a 24-month period.
• Once you qualify, the clock starts ticking on a 7-year window in which each new high-paying job may earn a credit ranging from $2,500 to $5,000 – per new job, per year, for 5 years.
• The value of the credit depends on the average wages of your company’s qualifying jobs (see table).

Quality Jobs Tax Credit $ (per job for 5 years)

Georgia’s Quality Jobs Tax Credit: The more you pay, the greater the credit

If your Quality Jobs Tax Credits lower your corporate tax liability to zero, then you can apply additional credits to your company’s payroll withholding tax liability.

Generate real ROI with the R&D Tax Credit

You can turn your research and development investment in Georgia into a major tax benefit by claiming Georgia’s R&D Tax Credit.

R&D isn’t limited to lab research. It includes all kinds of innovation, such as developing or prototyping new products or processes or conducting certain tests on new manufacturing equipment.

Determining your credit value starts with calculating a “base amount”:

• Your in-Georgia sales multiplied by a 3-year average ratio of R&D investment to in-state sales; OR
• Your in-Georgia sales for the current year, multiplied by 0.3

Use the lesser of these two as your base amount, then take 10% of your R&D investment in Georgia (in a year) above that base amount as your tax credit. And that investment isn’t just the cost of materials used in R&D activities – it also includes in-Georgia staff time of the engineers, technicians, managers, and directors involved.

After you apply all of your R&D Tax Credit to offset your corporate income tax liability, you can apply leftover credits to your company’s state payroll withholding liability – and actually generate cash flow.

Additional Georgia Tax Credits

One reason Georgia is among the states with low taxes: We offer a number of other tax credits in addition to all of the ones mentioned above. Some examples:

• Manufacturers and telecommunication companies that have been in the state for at least 3 years may qualify for an investment tax credit.
• Companies seeking to realize the full value of new technology investments may get a credit to offset the cost of re-training employees.
• Investors in a state-licensed child care facility or providing or sponsoring child care for employees may be eligible for tax credits for their expenses.

Tax credits are also available for:

• Creating jobs by insurance companies liable for the premium tax; and
• Creating more than 1,800 jobs over a 6- to 8-year period (depending on the amount of the investment).

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