Job Tax Credits
Job Tax Credits are available to a business engaged in:
- Research and Development
- Processing (data, information, software)
- Warehouse Distribution
Job Tax Credits range from $3,000 to $4,000 per new job, per year for five years depending on the site in Macon / Bibb County. Companies that create jobs in less developed census tracts are eligible for the maximum job tax credit of $4,000 per new job. The tax credit can be applied against 100% of the company’s Georgia Income Tax liability or in less developed census tract areas of Macon and Bibb County, against the company’s Payroll Withholding Tax liability. The credit has a 10 year carry forward provision.
As an example: Company A creates 100 new jobs in Macon and Bibb County. They are eligible for a tax credit of $1.5 million to $2 million over five years to reduce or eliminate Georgia income tax.
[100 jobs x $3,000 x 5 years = $1.5 million]
[100 jobs x $4,000 x 5 years = $2 million] - For less developed census tract locations only.
Port Job Tax Credit Bonus for Job Tax Credits
The port tax credit is a $1,250 per job bonus for taxpayers with qualified increases in shipments through the Georgia port. The bonus is added to the Job Tax Credit.
Port Tax Credit Bonus for Investment Tax Credit
The port bonus increases the investment tax credit to the equivalent of a Tier 1 location regardless of the tier level. The ports bonus would therefore be equal to 5% of the qualified investment in expenses directly related to manufacturing or providing telecommunications services with the credit increasing to 8 percent for recycling, pollution control and defense conversion. The port bonus is limited to 50 percent of income tax liability.
Quality Jobs Tax Credit
Companies that create at least 50 jobs and pay wages at least 110% of the county average are eligible to receive a credit of $2,500-$5,000 per job, per year, for up to five years, based on the scaled system below. Credits may be used to offset the company’s payroll withholding once all other tax liability has been exhausted and may be carried forward ten years.
Payroll Requirement (% of county average) Credit Value per Person
200% or greater $5,000
Mega Project Tax Credit
Companies that employ at least 1,800 net new 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 credit for the first 5 years of each net new job position. Credits are first applied to state corporate income tax with excess credits eligible for use against payroll withholding. Credits may be carried forward for 10 years.
Retraining Tax Credit
The Retraining Tax Credit is 50% of the employers’ direct retraining cost up to $500 per approved training program. The total amount of the credit cannot exceed $1,250 per employee per year. Training programs must be approved by the Technical College System of Georgia. The credit can be applied to up to 50% of the company’s Georgia corporate income tax liability. The credit is available to all Georgia businesses that file a Georgia income tax return. The retraining program must be for quality and productivity enhancements and certain software technologies. The credit has a 10 year carry forward provision. These credits can be combined with other tax credits.
Child Care Tax Credit
Child Care Credits range from 75% to 100% of costs, depending on whether the company provides child care or sponsors child care. The credits are available to all businesses in the state. The child care facility must be licensed by the state. The credits can be applied to up to 50% of the taxpayer’s income tax liability in a given year.
SMALL BUSINESS AND ENTREPRENEURS ASSISTANCE
Small Business Tax Relief
Small businesses making capital investments of less than $410,000 can write off up to $102,000 of those expenses in the current year. For capital investments greater than $410,000, the tax write-off is reduced dollar for dollar.
Entrepreneur and Small Business (ESB) Loan Guarantee Program
In partnership with the OneGeorgia Authority, the state can provide loan guarantees to spur entrepreneurial growth in specified rural communities throughout Georgia. The guarantee amounts can range between $35,000 and $250,000, can be used for hard assets or for start-up and working capital and require a 10 percent cash equity injection by the borrower.
EXISTING INDUSTRY ASSISTANCE
Existing Industry Job Tax Credit Bonus
Companies that have been doing business in Georgia for at least three years can claim a one-time additional $500 tax credit for every next new job they add between 2006 and 2011.
Investment Tax Credit
Existing Georgia manufacturing or telecommunications companies that have operated a facility in Georgia for at least three years, and which make a minimum $50,000 additional qualified capital investment, may claim from 3% to 5% for new investment made in Macon and Bibb County. The credit can be applied to up to 50% of the company’s Georgia income tax liability. The credit has a 10 year carry forward provision. The Job Tax Credit and the Investment Tax Credit can not be used together.
Optional Investment Tax Credits
The optional investment tax credit can be taken in lieu of the Investment Tax Credit. The credits range from 10 percent to 6 percent of qualified capital investment. This credit is available to taxpayers that qualify for investment tax credits, with the minimum investment ranging from $5 million to $20 million. A taxpayer can use the tax credits up to the calculated amount for a given 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.
Research and Development Tax Credit
Ten percent of a company’s increased qualified research and development expense over its gross receipts may be claimed as a tax credit. Georgia taxpayers must qualify for a research credit under the IRS code to be eligible. Emerging companies can apply the credit to offset their payroll withholding once all other tax liability has been exhausted for their first 5 years.