Opportunity Zone Job Tax Credit
(Corporate Income and Payroll Withholding Taxes)
There are many sites and buildings in Paulding that are part of the Paulding County/City of Dallas Opportunity Zone. New and expanding businesses in the zone that create at least two new eligible jobs in a twelve month period receive an annual credit of $3,500 per newly created job for five years. The credits are applied to 100% of the company's annual state corporate income tax. Remaining credits are then used towards the company's employee withholding taxes. Unused credits can be carried forward for ten years and used against future state corporate income tax liability.
Georgia Job Tax Credit
Georgia Job Tax Credits are available to manufacturing, warehouse/distribution, telecommunications and tourism operations that are not part of Paulding's opportunity zone. Companies that create at least 25 new eligible jobs in a twelve month period receive tax credits valued at $1,250 per newly created job for five years. The credit is applied against 50% of the business' corporate income taxes. Unused credits can be carried forward for ten years and applied against future state corporate income tax liability.
Port Tax Credit Bonus
The Port Tax Credit Bonus is available to taxpayers who qualify for the Jobs Tax Credit or the Investment Tax Credit, and increase shipments (both imports and/or exports) through a Georgia port by 10 percent over the previous or base year. Base year port traffic must be at least 75 net tons, five containers or 10 TEUs (twenty-foot equivalent units); if not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEUs as the base.
The Port Tax Credit bonus can be used with either the Job or the Investment Tax Credit program, provided that the company meets the requirements for one of those programs. Port Tax Credits may be used to offset up to 50 percent of the company's corporate income tax liability. Unused credits may be carried forward for 10 years, provided that the increase in port traffic remains above levels established during the first year of eligibility and that the company continues to meet the job or investment tax credit requirements. The Port Tax Credit Bonus cannot be utilized with the Quality Jobs Tax Credit.
Port Tax Credit Bonus for JOB Tax Credits
This "port bonus" is an additional $1,250 per job credit for taxpayers with qualified increases in shipments through a Georgia port. The $1,250 Credit Bonus is added to the Job Tax Credit.
Example: A taxpayer that creates 50 jobs in Paulding County and increases its port traffic by at least 10 percent is eligible to receive the port bonus. In this example, the taxpayer is eligible for $625,000 in tax credits spread over five years to reduce their Georgia income tax: 50 jobs x $2,500 ($1,250 job tax credit + $1,250 port tax credit bonus) x 5 years = $625,000.
Port Tax Credit Bonus for INVESTMENT Tax Credit
In Paulding County this "port bonus" increases the Investment Tax Credit. The port bonus is equal to five percent of the qualified investment in expenses directly related to manufacturing or telecommunication services with the credit increasing to eight percent for recycling, pollution control and defense conversion.
Example: A company qualifies for a port bonus in Paulding County, invests $100 million in a manufacturing plant plus $25 million in recycling equipment. The company is eligible for a $7 million investment tax credit to reduce or eliminate its Georgia income tax: [$100 million x 5%] + [$25 million x 8%] = $7 million.
Quality Jobs Tax Credit
Companies that create at least 50 jobs in a 12-month period where each job pays wages of at least 110 percent of the county average are eligible to receive a tax credit of $2,500 to $5,000 per job, per year, for up to five years, based on the scaled system below. New quality jobs created within seven years can qualify for the credit. Credits may be used to offset the company's state payroll withholding once all other tax liability has been exhausted, and may be carried forward for 10 years. New jobs that do not meet the requirements for the Quality Jobs Tax Credit may count toward the Jobs Tax Credit Program if they meet the eligibility requirements for that program separately.
(% of County Average)
For Current Average County Wages, visit http://explorer.dol.state.ga.us/mis/Current/ewcurrent.pdf.
Georgia offers an incentive to new and existing business entities performing qualified research and development in Georgia. Qualified research expenses are defined in Section 41 of the Internal Revenue Code of 1986, as amended, except that all wages paid and all purchases of services and supplies must be for research conducted within the State of Georgia. Companies may claim a 10 percent tax credit of increased R&D expenses subject to a base amount calculation.
The base amount = Current Year Georgia Gross Receipts x [(the average of the ratios of the company's qualified Georgia research expenses to Georgia gross receipts for the preceding three taxable years) OR 0.300, whichever is less]. For companies new to Georgia or for companies with no prior R&D expenditures in Georgia, the base amount is 30 percent of the current year's Georgia gross receipts.
The credit is determined by taking the current year's qualified R&D expenses, subtracting the base amount, and multiplying by 10 percent. The R&D credit is applied to 50 percent of the company's net Georgia income tax liability after all other credits have been applied. Any excess R&D credits can then be applied to the company's state payroll withholding. Unused credits can be carried forward for up to 10 years from the close of the taxable year in which the qualified research expenses were made.
Companies that hire at least 1,800 new net employees, AND either [invest a minimum of $450 million OR have a minimum annual payroll of $150 million] may claim a $5,250 per job, per year tax credit for the first five years for each net new job position. Companies must create the required 1,800 jobs by the close of the sixth taxable year following the withholding start date. However, if a company has invested at least $600 million in qualified investment property by year six, the company will have two additional years (until year eight) to meet the job creation requirement.
If a company has invested at least $800 million in qualified investment property by year eight, the company will have two additional years (until year ten) to meet the job creation requirement. Credits are first applied to state corporate income tax liability, with excess credits eligible for use against state payroll withholding. Credits may be carried forward for 10 years. A maximum of 4,500 new jobs created by any one project may be eligible to receive these credits. If the required 1,800 new jobs are not maintained, the company may be subject to recapture provisions.
Example: A company creates 2,000 new jobs and invests $500 million in a new facility and equipment. The company would be eligible to receive $52.5 million in tax credits over five years to reduce or eliminate Georgia income tax, with any excess credits eligible for use against state payroll withholding. [2,000 jobs x $5,250 credits/job x 5 years = $52.5 million].
Georgia Film, Television and Interactive Entertainment Tax Credit
The Georgia Entertainment Industry Investment Act offers an across-the-board flat tax credit of 20 percent based on a minimum investment of $500,000 on qualified productions in Georgia. The $500,000 minimum expenditure threshold can be met with one or multiple projects aggregated. An additional 10 percent uplift can be earned by including an imbedded, animated Georgia logo and web link on the project's promotional webpage, or through approved alternatives if they offer equal or greater marketing opportunities for the state. Qualified expenditures include materials, services and labor.
Eligible productions include feature films; television movies, pilots or series; commercials; music videos; and certain interactive entertainment projects including animation, special effects and video game development. Beginning January 1, 2013, interactive entertainment companies became eligible for this credit only if their gross income is less than $100 million and the maximum credit for any qualified interactive entertainment production company and its affiliates is $5 million. The total credits available for interactive entertainment production companies and their affiliates are capped at $25 million and will be awarded on a first come, first served basis.
This income tax credit may be used against Georgia income tax liability or the company's Georgia payroll withholding. If the production company chooses, they may make a one-time sale or transfer of the tax credit to one or more Georgia taxpayers.
Child Care Tax Credits:
Employers who purchase or build qualified child care facilities are eligible to receive Georgia income tax credits equal to 100 percent of the cost of construction. The credit for the cost of construction is spread over 10 years [10 percent each year]. Unused child care credits from the purchase or construction of a child care facility can be carried forward for three years. The child care facility must be licensed by the state.
Employers who provide or sponsor child care for employees are eligible for a credit against Georgia income tax equal to 75 percent of the employer's direct costs. Credits that are related to the operating cost of the facility may be carried forward for five years.
All child care credits can be used against 50 percent of the taxpayer's income tax liability in a given year.
Work Opportunity Tax Credit Program (WOTC):
The Georgia Department of Labor (GDOL) coordinates the Federal Work Opportunity Tax Credit Program. The WOTC program is a federal tax credit incentive that the U.S. Congress provides to private-sector businesses for hiring individuals from nine target groups who have consistently faced significant barriers to employment. Among others, target groups include unemployed veterans, certain TANF (Temporary Assistance for Needy Families) and food stamp recipients, and certain residents of an Empowerment Zone (EZ) or Rural Renewal County (RRC).
Participating companies are compensated by being able to reduce their federal income tax liability with a tax credit that ranges from $1,200 to $9,000 per qualified employee, depending on the target group. The most frequently certified WOTC is $2,400 for each adult new hire. An employer must request and receive certification from the Georgia Department of Labor that the new hire is a member of at least one of the nine WOTC target groups before the employer can claim the WOTC on its federal income tax return. Although veterans are the only target group currently approved to receive these credits, Congress may extend the credits to the other eight target groups, so employers are encouraged to submit the required paperwork for all new hires in any of the nine target groups to Georgia's WOTC Coordinator no later than 28 calendar days after the new hire begins work.
Additional information can be found at: www.dol.state.ga.us/em/learn_about_tax_credits_and_incentives.htm
Investment Tax Credit
Existing Paulding County companies that have operated a manufacturing or telecommunications facility or manufacturing or telecommunications support facility in Georgia for at least three years, and that make a minimum $50,000 additional qualified capital investment in a new or existing manufacturing or telecommunications facility, may claim one percent of the new investment as a tax credit. Qualified investment expenses include, but are not limited to, amounts expended on land acquisition, improvements, buildings and machinery and equipment to be used in the manufacturing or telecommunications facility.
A higher credit of three percent is available for Paulding businesses that invest in recycling or pollution control equipment and for defense plant manufacturing conversion to a new product. The duration of a project shall not exceed three years unless expressly approved in writing by the Commissioner of the Georgia Department of Revenue.
This credit may be applied against 50 percent of state corporate income tax liability and carried forward for 10 years. To be eligible to receive the credits, a taxpayer must submit a written application to the Georgia Department of Revenue requesting approval of the project plan within thirty (30) days of the completion of the project. Taxpayers may claim only one of the job, investment, or optional investment credits for a given project.
Optional Investment Tax Credits
Optional Investment Tax Credits are available to taxpayers that qualify for investment tax credits; the minimum investment is $20 million. The duration of a project shall not exceed three years unless expressly approved in writing by the Commissioner of the Georgia Department of Revenue. The aggregate credit amount allowed is six percent:
- Ninety percent of the excess of the taxpayer's state income tax liability for the applicable year (determined without regard to any credits) over the taxpayer's base year average tax liability, or
- The excess of the taxpayer's aggregate credit amount allowed for the applicable year over the sum of the credits under this section already used by the taxpayer in the years following the base year
The credit may be claimed up to 10 years after the year the property was first placed in service, provided the property remains in service. The optional investment tax credit is a calculated risk. Without large increases each year in income tax liability, the usable tax credit could be very small and possibly zero. To be eligible to receive the credits, a taxpayer must submit a written application to the Georgia Department of Revenue requesting approval of the project plan within thirty (30) days of the completion of the project. Taxpayers may claim only one of the job, investment or optional investment credits for a given project.