Incentives

Georgia will exempt the Excise Tax/ Sales Tax on Energy for manufacturers in the State of Georgia. The counties in Georgia have the option to either exempt their “portion” of the tax due from the company or collect. Houston County and all of its respective cities have chosen to EXEMPT this tax.

Raw materials and goods in process of manufacture, finished goods produced in Georgia within the last 12 months and held by the original manufacturer and finished goods destined for shipment out of state are eligible for a 100 percent property tax exemption Houston County, Georgia when destined for shipment outside the state.

Georgia helps companies lower their cost of doing business by offering the ability to purchase various types of goods and services tax free.

This apportionment formula treats a company’s gross receipts or sales in Georgia as the only relevant factor in determining the portion of that company’s income subject to Georgia’s 6 percent corporate income tax. Single Factor Apportionment significantly reduces the effective rate of Georgia income taxation of companies with substantial sales to customers outside Georgia. In addition, Georgia does not use the so-called “Throw Back Rule,” which many states use to tax income from sales of goods or services to out-of-state customers outside Georgia. In addition, Georgia does not use the so-called “Throw Back Rule,” which many states use to tax income from sales of goods or services to out-of-state customers if the customer’s state does not already tax that income.

The sale of certain computer equipment is exempt when the total qualifying purchases by a High Technology Company in a calendar year exceed $15 million. A High Technology Company must be classified under North American Industry Classification System code 334413, 334611, 51121, 51331, 51333, 51334, 51421, 52232, 54133, 54171, 54172, 513321, 513322, 514191, 541511, 541512, 511513, or 511519.

Machinery and equipment and materials used in the construction or operation of a clean room of Class 100 or less when the clean room is used directly in the manufacture of tangible personal property is exempt.

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.

BEST includes any business (or headquarters of any such business) engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries, but does not include retail businesses. To establish threshold criteria, the state is divided into four eligibility “tiers” from most economically disadvantaged (Tier 1) to least disadvantaged (Tier 4). As the tier increases, so does the job creation requirement and the tax credit.

Houston County is designated as a Tier 3 community. As such, qualified companies locating or expanding in Houston County must create a minimum of 15 new full-time jobs to take advantage of the credit. Since Houston County is a member of the Middle Georgia Regional Development Authority, a company can also receive an additional $500 per job credit under BEST. This brings the total tax credit to $1,750 per full-time job created. These credits may be used to offset up to 50 percent of the company’s state tax liability, and there is a 10-year carry forward.

Companies that create at least 50 jobs in a 12-month period where each job pays 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. 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.

Companies that hire at least 1,800 net new employees, AND either invest a minimum of $450 million OR have an minimum annual payroll of $150 million AND pay an average wage above specified minimums or show high growth potential may claim a $5,250 per job, per year tax credit for the first 5 years of each net new job position. Credits are first applied to state corporate income tax liability, with excess credits eligible for use against 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.

Added to the Jobs Tax Credit, this credit equals $1,250 per job bonus for taxpayers with qualified increases in shipments through a Georgia port.

All industrial sites owned by the Development Authority are eligible for Military Zone Tax Credit Incentives. This credit provides:

• the maximum Job Tax Credit allowed under law – $3,500 per job created
• lowest job creation threshold – 2 jobs
• use of Job Tax Credits against 100 percent of income tax liability and withholding taxes

Portions of the City of Perry are located in an Opportunity Zone providing for the maximum job tax credit of $3,500 per job. This credit can be applied to the company’s Withholding Liability.

Employers who purchase or build qualified childcare 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. Unused child care credits from the purchase or construction of a child care facility can be carried forward for three years.

The Development Authority of Houston County, in cooperation with the Houston County Board of Tax Assessors, may develop a revised tax schedule for new Real and Personal property for qualifying projects. This approach is intended to offer the greatest benefit in the early years of the project with the company paying its full tax obligation at the final term of the bond. Projects must satisfy certain financial requirements as well as new job creation, payroll and capital investment thresholds in order to take advantage of this program. In Georgia, the legal system for the provision of certain incentives depends on the implementation of a bond-financed sale-leaseback structure. These incentives can include property tax savings (“abatement”), grants, and in-kind incentives. The bonds are industrial development revenue bonds issued through a local development authority. In the streamlined “bonds for title” structure, legal title to the project is vested in the development authority, and the company holds the bonds, a lease and a nominal purchase option.

The Development Authority of Houston County offers an attractive alternative to conventional financing through the issuance of Industrial Revenue Bonds (IRBs). This financing mechanism can offer considerable savings for projects and the DAHC stands ready to guide qualified companies through this process. In addition to the bond financing, the DAHC can assist companies in exploring alternate financing programs such as those offered through the U.S. Small Business Administration and the Georgia Small Business Lender, Incorporated.

Companies that hire at least 1,800 net new employees, AND either invest a minimum of $450 million OR have an minimum annual payroll of $150 million AND pay an average wage above specified minimums or show high growth potential may claim a $5,250 per job, per year tax credit for the first 5 years of each net new job position. Credits are first applied to state corporate income tax liability, with excess credits eligible for use against 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.

Employers who purchase or build qualified childcare 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. Unused child care credits from the purchase or construction of a child care facility can be carried forward for three years.

All industrial sites owned by the Development Authority are eligible for Military Zone Tax Credit Incentives. This credit provides:

• the maximum Job Tax Credit allowed under law – $3,500 per job created
• lowest job creation threshold – 2 jobs
• use of Job Tax Credits against 100 percent of income tax liability and withholding taxes

Portions of the City of Perry are located in an Opportunity Zone providing for the maximum job tax credit of $3,500 per job. This credit can be applied to the company’s Withholding Liability.

Added to the Jobs Tax Credit, this credit equals $1,250 per job bonus for taxpayers with qualified increases in shipments through a Georgia port.

Offsets up to 50 percent of the employers’ approved direct retraining cost up to $500 per program per employee per year. The credit can be applied to up to 50 percent of the company’s Georgia tax liability. The credit has a 10-year carry forward provision.

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 between $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.

Companies that create at least 50 jobs in a 12-month period where each job pays 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. 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.