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INVESTMENT TAX CREDITS
Investment tax credits generally range from 8% to 1% of qualified capital investment. The exact credit [chart below] depends on the tier level of the county where the investment occurs. Investment tax credits are available to an existing manufacturing or telecommunications business that has operated a facility in Georgia for three years prior to the investment and invests $50,000 or more. Higher level credits range from 8% to 3% [chart] for investment in recycled equipment, pollution control equipment, and for the conversion of a defense plant to manufacturing of a new product. The recycle, pollution control, and defense conversion options are available only for manufacturing plants. Taxpayers must choose either the investment tax credit or the job tax credit.
Example: Taxpayer in a tier 1 county invests $100 million in a manufacturing plant plus $25 million in recycling equipment. Taxpayer is eligible for a $7 million tax credit to reduce or eliminate Georgia income tax. [$100 million x 5%] + [$25 million x 8%] = $7 million.
Investment tax credits can be used against 50% of income tax liability in a given year. Unused credits may be carried forward 10 years.
|
Tier |
Investment |
Credits |
Limits of Credits |
Forward |
Minimum Investment |
|
1 |
5% |
8%* |
50% of tax liability |
10 years |
$50,000 |
|
2 |
3% |
5%* |
50% of tax liability |
10 years |
$50,000 |
|
3 |
1% |
3%* |
50% of tax liability |
10 years |
$50,000 |
|
4 |
1% |
3%* |
50% of tax liability |
10 years |
$50,000 |
| *Recycle, Defense Conversion, Pollution Control |
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Port Investment Bonus is available to taxpayers with large increases of shipments in or out of a Georgia port. The port bonus increases the investment tax credit to 5% regardless of the tier level. The 5% is in lieu of the investment tax credit [above]. The port bonus is limited to 50% of income tax liability. Unused credits may be carried forward 10 years.
Example: Taxpayer qualifies for a port bonus in a tier 4 county, invests $100 million in a manufacturing plant plus $25 million in recycling equipment. Taxpayer is eligible for a $5.75 million investment tax credit to reduce or eliminate Georgia income tax: [$100 million x 5% ] + [$25 million x 3% ] = $5.75 million. The port bonus cannot be added to the higher tax credits such as recycling. The investment bonus cannot exceed 5% in a tier 1 county.
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