This credit applies to businesses or headquarters of a business engaged in manufacturing, warehousing and distribution, processing, tourism, or research and development industries: it does not include retail businesses. When your company creates 15 or more new jobs, you can receive a $1,750 tax credit for 5 years for each new job created. To be eligible, the company must also:
provide an average wage that is 10% higher than the average wage in the lowest Georgia County ($362 in 2006)
make comparable health insurance available to new employees
Credits are allowed for each full-time employee job for five years beginning with years two through six after the creation of the job. Each credit cannot be more than 50% of the taxpayer's total state income tax liability for that taxable year. A credit claimed but not used in any taxable year may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established.
Investment Tax Credit
This program allows a person or corporation that has operated an existing manufacturing facility in the state for the previous three years to obtain a credit against income tax liability for investment in assets directly related to the manufacturing process. This credit is also available to any establishment involved in the performance of activities designed primarily to support a manufacturing facility such as corporate offices, warehouses, telecommunications, R&D, laboratories, etc. Companies must invest $50,000 to receive a 1% credit. That credit increases to 3% for recycling, pollution control and defense conversion - activities.
The credit is a percentage of the total value of all qualified investment property and 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 10 years from the close of the taxable year in which the qualified investment was acquired. An existing firm cannot take both the job tax credits and the investment tax credits.
Research and Development Tax Credit
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, information processing, telecommunications, tourism, or research and development industries that have paid taxes in Georgia for the past three years.
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 tax credit may be carried forward 10 years but may not exceed 50% of the business' net tax liability in any one year after all other credits have been taken.
Rapidly Growing Small Business Tax Credit
Georgia income tax credits are available to a small business having Georgia net taxable income growth of 20 percent or more each year for three consecutive years. The credit in year 3 is the difference in the net taxable income of year 3 and year 2. Eligible companies include manufacturing, warehouse/distribution, processing, R&D, telecommunications and tourism.
Example: Taxpayer's net taxable income increases by 20 percent or more for three consecutive years. In year 3, the net taxable income is $1 million. The net taxable income in year 2 was $300,000. Taxpayer is eligible to receive a $700,000 tax credit: [$1,000,000 - $300,000].
The small business credit can be used against 50 percent of the remaining Georgia income tax liability after all other credits have been applied in a given year. There is no carry forward provision. This process can continue until the taxpayer's Georgia income tax liability exceeds $1.5 million, at which time the taxpayer would no longer be considered a small business. This credit may be combined with other tax credits.
Retraining Tax Credit
Existing industries that provide retraining for employees are eligible for a tax credit equal to 50% of the costs of retraining each full time employee up to $500 per course. Eligible training includes training on new equipment, in new technology, and for new operating systems like total quality management, ISO 9000, employee involvement programs. and software implementation and upgrades.
The training must:
Enhance the skills of employees otherwise unable to function effectively on new equipment
Be approved by the Department of Technical and Adult Education
Be provided at no cost (either wages or time) to the employee
Eligible training costs include:
Instructor salaries
Employee wages during training-paid work hours
Development costs
Materials/supplies, Textbooks/manuals
Instructional media
Video tapes
Equipment used in retraining
Reasonable travel costs
The credit cannot be more than 50% of the taxpayer's total state income tax liability for that taxable year.
