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 percent 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
Local governments can expand the Freeport Exemption and authorize a call for a referendum to approve the creation of a Level Two Freeport Exemption, which would exempt from local property tax any business inventory or real property not covered in the Level One Freeport Exemption, including retail inventory. Like the Level One Exemption, counties and municipalities may choose to implement a Level Two Freeport Exemption at the 20, 40, 60, 80 or 100 percent level.