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 percent 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 (Twenty-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 percent 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.
THE PORT TAX CREDIT BONUS FOR JOB TAX CREDITS
Suppose a company creates 50 jobs in a Tier 1 county and increases its port traffic by at least 10 percent over the previous year. That activity would yield a tax credit of more than $1.3 million over five years:
$4,000 job tax credit + $1,250 port tax credit bonus = $5,250 total credit per job
50 jobs x $5,250 = $262,500 x 5 years = $1,312,500
THE PORT TAX CREDIT BONUS FOR INVESTMENT TAX CREDITS
Regardless of where a company makes its investment, the port tax credit for that investment is based on Tier 1 location – the location providing the highest tax benefit – when the company qualifies for a port tax credit bonus. The port bonus would be equal to 8 percent of investments in recycling, pollution control and defense facility conversion; and 5 percent of investments in manufacturing or provision of telecommunication services.
Suppose a company invests $100 million in a manufacturing plant and $25 million in recycling equipment in a Tier 4 county – and increases its port traffic by at least 10 percent over the previous year. That activity would reduce the company’s income tax by $7 million:
[$100 million x 5%] + [$25 million x 8% ] = $7 million
Port Tax Bonus Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.15.
TAX FORM IT-CA 2012
Claim the port tax credit on Schedule 10 of the tax return and attach a schedule to the state income tax return which shall set forth the following information, as a minimum, in addition to the information required under O.C.G.A. § 48-7-40:
- (A) A description of how the base year port traffic and the increase in port traffic was determined;
- (B) The amount of the base year port traffic;
- (C) The amount of the increase in port traffic for the taxable year, including information which demonstrates an increase in port traffic in excess of the minimum amount required to claim the tax credit under this Code section;
- (D) Any tax credit utilized by the taxpayer in prior years;
- (E) The amount of tax credit carried over from prior years;
- (F) The amount of tax credit utilized by the taxpayer in the current taxable year; and
- (G) The amount of tax credit to be carried over to subsequent tax years