Georgia Incentives and Workforce Development Guide
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Job Tax Credit: A job credit is a tax credit that helps fuel company expansion by rewarding job creation. In Georgia, job credits provide as much as $4,000 in annual tax savings per job for up to five years. They’re available to businesses (or their headquarters) in seven strategic sectors:
- Warehousing & distribution
- Research & development
The exact value of the job credits depends on two factors – how many jobs are created, and where. A downloadable map shows how all Georgia counties and census tracts rank as “economic tiers” based on three factors: unemployment rate, per capita income and percentage of residents whose incomes are below poverty level.
And job credits can apply to any business outside the strategic sectors, provided the jobs are created in Opportunity Zones, Military Zones or Georgia’s 40 least developed counties.
Companies should compare the benefits of the job tax credit with those of the investment tax credit, as taxpayers are allowed to claim one or the other, but not both.
Quality Jobs Tax Credit: The Quality Jobs Tax Credit is another job tax credit for jobs that pay higher-than-average wages. It can give Georgia companies a significant tax break and help drive growth.
The Quality Jobs Tax Credit rewards companies that create at least 50 jobs in a 12-month period – provided the jobs pay wages that are at least 10% higher than the county average for wages.
QJTC may be applied against 100% of state corporate income tax liability, and once all corporate income tax liability has been exhausted, the credits may be used to offset the company’s state payroll withholding. Unused credits may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established.
New jobs that do not meet the requirements for the QJTC may count toward Job Tax Credits if they meet the eligibility requirements for that program separately.
Port Tax Credit Bonus: The port tax credit bonus rewards new or expanding Georgia companies that increase imports or exports through a Georgia port by at least 10% over the previous or base year.
To be eligible for the port tax credit bonus:
- Companies must first meet the requirements of either the job tax credit or investment tax credit programs.
- Base year port traffic must be at least 75 net tons; or five containers; or 10 TEUs (20 foot Equivalent Units). If base year traffic is lower, then these minimums automatically become the base upon which traffic increases are calculated.
The port tax credit bonus is calculated as follows according to which program it is used with:
- Job Tax Credit: An addition of $1,250 (per job) to the job tax credit, which can be taken for five years to reduce or eliminate Georgia corporate income tax liability; or
- Investment Tax Credit: An adjustment in the calculation of the investment tax credit, so that the credit amount is based on the equivalent of a Tier 1 location. (5% of the qualified investment expenses or 8% for recycling, pollution control and defense conversion.)
The port tax credit bonus may offset up to 50% of the company’s corporate income tax liability. Unused credits may be carried forward for 10 years – but the increase in port traffic must remain above the qualifying threshold, and the company must continue to meet the requirements for either the Job Tax Credit or the Investment Tax Credit.
Note: The port tax credit bonus cannot be used with Georgia’s quality jobs tax credit program.
Research & Development Tax Credits: Research and development (R&D) tax credits are a valuable benefit for companies developing new products and services in Georgia.
R&D tax credits are available to any company that increases its qualified research spending. Brand new companies, existing companies embarking on R&D for the first time, established companies expanding their R&D budget – all are eligible for R&D tax credits.
The tax credit earned is a portion of the increase in R&D spending. The credit can be used to offset up to 50 percent of net Georgia income tax liability, after all other credits have been applied.
Any unused R&D tax credits can be carried forward for up to 10 years. In addition, excess R&D tax credits can be used against state payroll withholding.
Mega Project Tax Credit: The Mega Project Tax Credit is available for 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. These qualifying companies may claim a $5,250 per job, per year tax credit for the first five years of each net new job position. Credits are first applied to state corporate income tax, then any excess credits are eligible for use against payroll withholding. Credits may be carried forward for 10 years.
If the taxpayer selects the qualified investment property requirement as one of the conditions for its project, the property shall involve the construction of one or more new facilities. a qualified project, including, but not limited to, amounts expended on land acquisitions, improvements, buildings, building improvements, and any personal property to be used in the facility or facilities.
Child Care Tax Credits: Employers who purchase or build qualified child care facilities are eligible to receive GA income tax credits equal to 100 percent of the cost of construction—the credit is spread over 10 years (10 percent each year). Unused credits from the purchase or construction of a child care facility can be carried forward 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 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): Work Opportunity Tax Credits (WOTC) are federal tax credits awarded to Georgia companies that hire individuals who have consistently faced significant barriers to employment. The Georgia Department of Labor (GDOL) coordinates the WOTC program which provides employers financial incentives when hiring workers from targeted groups of job seekers by reducing an employer’s federal income tax liability. The tax credit can be from $1,200 to $9,600 per qualified employee, depending on the target group. The most frequently certified WOTC is $2,400 for each adult new hire.
Targeted groups include:
- Recipients of the Temporary Assistance for Needy Families (TANF) program
- Recipients of Supplemental Nutrition Assistance Program benefits
- Residents who live within Empowerment Zones or Rural Renewal Counties
- Recipients of vocational rehabilitation from a qualifying agency
- Recipients of Supplemental Security Income benefit
- Summer youth employee
To qualify for the tax benefit, companies must first receive certification from Georgia’s Department of Labor, which administers the program in Georgia.
Inventory Tax Exemption: Business inventory is exempt from state property taxes (0.10 mills in 2014, with full phase out reached in 2016). Almost all (89 percent) of Georgia’s counties and over 140 of the cities have adopted a Level One Freeport Exemption, set at 20, 40, 60, 80, or 100% of the inventory value.
A Level One Freeport Exemption may exempt the following types of tangible personal property:
- Inventory of goods in the process of being manufactured or produced including raw materials and partly finished goods
- Inventory of finished goods manufactured or produced in Georgia held by the manufacturer or producer for a period not to exceed 12 months
- Inventory of finished goods on January 1 that are stored in a warehouse, dock, or wharf that are destined for shipment outside of Georgia for a period not to exceed 12 months
Foreign-Trade Zone (FTZ): Georgia is home to multiple FTZ sites and is a recognized leader in working with companies to facilitate use of the program. Importing and exporting are central to many businesses’ success, and the program streamlines those activities and lowers costs. The FTZ program allows qualified companies to defer, decrease, or eliminate duties on materials imported from overseas that are used in products assembled in Georgia.
Georgia Film, Television, and Interactive Entertainment Tax Credit: Film, television and digital entertainment tax credits of up to 30% create significant cost savings for companies producing feature films, television series, music videos and commercials, as well as interactive games and animation.
Georgia’s Entertainment Industry Investment Act provides a 20% tax credit for companies that spend $500,000 or more on production and post-production in Georgia, either in a single production or on multiple projects.
The state grants an additional 10% tax credit if the finished project includes a promotional logo provided by the state. If a company has little or no Georgia tax liability, it can transfer or sell its tax credits.
Investment Tax Credit: Investment tax credits help Georgia businesses grow by making it more affordable to expand and improve facilities.
Companies in manufacturing or telecommunications support that have operated in Georgia for at least three years are eligible to earn investment tax credits for upgrades or expansions. Credit earned amounts to 1 % to 8% of qualified capital investments of $50,000 or more.
The credit is calculated using two factors:
- Geographic location. Companies in the state’s less prosperous counties receive larger credits.
- Type of investment. Companies that invest in recycling equipment, pollution control or in converting a defense plant manufacturing facility to a new product earn tax credits of 3% to 8% of their capital outlay. Investment in general equipment for manufacturing or telecommunications services earns tax credits of 1% to 5%.
Investment tax credits can be used to offset up to 50% of a company’s Georgia corporate income tax liability. If the earned credit exceeds that limit, then the unused credit can be carried forward for up to 10 years and applied to future years’ tax liability.
Companies should compare the benefits of the investment tax credit with those of the job tax credit, as taxpayers are allowed to claim one or the other, but not both.
Optional Investment Tax Credits: Optional investment tax credits can provide a long-term, significant tax benefit that rewards growing companies for making major investments in Georgia.
The exact value of the optional investment tax credits depends on three factors: how much is invested; where the investment is made in Georgia; and the change in a company’s tax liability.
Hiring Assistance: Georgia’s Department of Labor (GDOL) assists companies in recruitment by posting job notices, collecting and screening applications and/or résumés, providing interview space, scheduling interviews and hosting job fairs. GDOL will work with private employment agencies that list jobs with the state.
Quick Start Employee Training: Provides customized training for new employees in skill-based jobs at no cost to qualifying companies. The training program is given to the company for its future use. Quick Start provides training space, instructors and all needed materials related to the program, potentially saving companies millions of dollars in training costs. See georgiaquickstart.org
Retraining Tax Credit: Retraining tax credits enable Georgia businesses to offset their investment in employees. Whether retraining workers to use new equipment or new technology or upgrading the company’s competitiveness with ISO 9000 training, companies can afford more training, more often, thanks to Georgia’s tax credit program.
Businesses can receive a tax credit of 50% of their direct training expenses, with up to $500 credit per full-time employee, per training program. The annual maximum of the credit amounts to $1,250 per employee. Eligible expenses include:
- costs of instructors and teaching materials
- employee wages during retraining
- reasonable travel expenses
Retraining tax credits can be used to offset up to 50% of a company’s Georgia corporate income tax liability. If the earned credit exceeds that limit, then the unused credit can be carried forward for up to 10 years and applied to future years’ tax liability.
Any business that files a Georgia income tax return is eligible for the retraining tax credit. To qualify, training programs must be designed to enhance quality and productivity or teach certain software technologies. To qualify for the credit, retraining expenses must be approved by the Technical College System of Georgia.
University System of Georgia Economic Development: The Board of Regents of the University System of Georgia created an Office of Economic Development in 1995. The System’s Economic Development staff, working with a team of economic development leaders from each campus, bridges the intellectual resources of Georgia’s 31 public college and universities to the Georgia Department of Economic Development and the state’s business community in innovative ways. Georgia businesses can connect with college-educated talent, the latest research and business and operations advice.
Centers of Innovation: Georgia’s six Centers of Innovation provide unique, technology-oriented support to businesses and start-ups in the areas of Aerospace, Agribusiness, Energy, Life Sciences & IT, Logistics and Advanced Manufacturing. Each center provides direct access to university and technical college applied research, commercialization resources, technology connections, matching grant funds, potential investor networks and key government agencies. Client companies are connected with industry-specific experts who are on the leading edge of technology and new ideas.