Investment Tax Credit
Existing Georgia companies that have operated a manufacturing or telecommunications support facility in Georgia for at least three years, and that make a minimum $50,000 additional qualified capital investment, may claim from one to five percent (depending on tier status) of the new investment directly related to manufacturing or providing telecommunications services as a tax credit (see table below for tier levels and link to tier map). Higher credits (three to eight percent, depending on tier status) are available for investments in recycling or pollution control equipment and for defense plant manufacturing conversion to a new product. Taxpayers must choose either the investment tax credit or the job tax credit (if applicable). This credit may be applied against 50 percent of state corporate income tax liability and carried forward for 10 years.
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.
|
Tier |
Credits |
Credits* |
Limits of Credits |
Carry 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 |
|
2011 Tax Credit Tier Map (PDF) |
Taxpayers must file an application with the Georgia Department of Revenue (use Form IT-APP) and receive approval before claiming the credit on the appropriate tax return. This credit should be claimed on Form IT-IC and accompanied by the approved Form IT-APP. For more information, refer to O.C.G.A. §48-7-40.2, 40.3, and 40.4.
Port activity Bonus for Investment Tax Credit
The Port Tax Credit Bonus is available to taxpayers who increase imports or exports through a Georgia port by 10 percent over the previous or base year. Base year port traffic must be at least 75 net tons, five containers or 10 TEUs (twentyfoot equivalent units); if not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEUs as the base. The port tax credit bonus can be used with the Investment Tax Credit program, provided that the company meets the requirements outlined above.
This “port bonus” increases the Investment Tax Credit to the equivalent of a Tier 1 location regardless of the tier level. The port bonus would therefore be equal to five percent of the qualified investment in expenses directly related to manufacturing or providing telecommunication services with the credit increasing to eight percent for recycling, pollution control and defense conversion. These credits are taken in place of, not in addition to, the regular Investment Tax Credits described above.
Port Tax Credits may be used to offset up to 50 percent of the company’s corporate income tax liability. Unused credits may be carried forward for 10 years, provided that the increase in port traffic remains above the minimum level and that the company continues to meet the investment tax credit requirements.
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 $7 million investment tax credit to reduce or eliminate Georgia income tax:
[$100 million x 5% ] + [$25 million x 8% ] = $7 million.
The Port Activity Bonus credit is claimed by filing the appropriate form for the applicable credit (investment tax: Form IT-IC) with the tax return and providing a statement with port numbers to verify the increase in port traffic.
For more information, refer to O.C.G.A. §48-7-40.15 or contact one of our industry-specific Project Analysts or our on-the-ground Regional Project Managers.