Georgia offers a range of corporate tax credits that enable companies to minimize or completely eliminate state corporate income taxes. For some of the credits, the amounts are dependent on the "tier status" of the community. Tier status refers to an annual four-tier ranking of the economic vitality of Georgia's counties. The highest credits are offered in the counties with the greatest need (Tier 1 and 2 counties), while the most prosperous counties (Tier 3 and 4 counties) offer lesser amounts.
Job Tax Credit
Job Tax Credit New and expanding companies may earn Job Tax Credits for creating new jobs in Georgia. These credits can effectively eliminate a company’s corporate income tax liability and in certain areas, can also reduce the company’s payroll withholding obligations.
The requirements and benefits depend on where the new jobs are located, with lower qualification requirements and higher benefits in Georgia’s less developed areas. Each year, all 159 Georgia counties are assigned to one of four “tiers” based on the unemployment rate, per capita income and poverty rate.
Once a company has qualified to earn Job Tax Credits, it can earn a tax credit for each net new job it creates (and maintains) during the next five years. Each of those jobs can earn an annual credit for five years after it is created.
* Includes $500 bonus for Joint Development Authority (JDA). Georgia counties can form partnerships that benefit companies with this $500 Job Tax Credit bonus. There are currently four counties that are not a member of a JDA and thus do not qualify for the $500 JDA bonus. These counties are Echols, Pierce, Ware and Webster.
MZ= Military Zone OZ= Opportunity Zone LDCT= Less Developed Census Tract
Example: You create 50 jobs in a Tier 1 county that offers a $4,000 credit, and you will receive $1 million in tax credits over five years to reduce or eliminate Georgia corporate income tax [50 jobs x $4,000 x 5 years = $1 million].
Qualifying for the JobTax Credit
A company may qualify for Georgia’s Job Tax Credit by creating net new full-time jobs at any location in the state, if they or their headquarters are engaged in strategic industries such as:
- Warehousing and Distribution
- Research and Development Industries
- Biomedical Manufacturing
- Services for the Elderly and Persons with Disabilities *Includes, but is not limited to, manufacturing alternative energy products for use in solar, wind, battery, bioenergy, biofuel and electrical vehicle enterprises.
The jobs’ location determines the minimum number of net new full-time jobs that must be created in order to qualify for the credit, ranging from two net new jobs (Tier 1) to 25 net new jobs (Tier 4) in the first qualifying year.
New jobs created after the five-year period ends do not earn tax credits unless the project meets the minimum requirement of new jobs in a single year again, and then another five-year cycle may start.
Value of the Job Tax Credit
The value of the tax credit ranges from $750 to $4,000 each year for five years (depending on the tier and whether the county is a member of a Joint Development Authority) for each new job created over a five-year period. The credit value for each county is indicated on page 5. Credits may be taken against 100 percent of state corporate income tax liability in Tier 1 and 2 counties, or against 50 percent of state corporate income tax liability in Tier 3 and 4 counties. Claimed but unused credits may be carried forward for 10 years from the close of the taxable year in which qualified jobs were established.
Additionally, in Tier 1 counties, excess Job Tax Credits may be credited to Georgia payroll withholding taxes (with a limitation of $3,500 per job, per year).
In addition to the classification of counties into tiers, certain areas may receive special designations. Companies in Less Developed Census Tracts (LDCT), Opportunity Zones (OZ), and Military Zones (MZ) are eligible for a $3,500 job tax credit which can be applied to 100 percent of corporate income tax liability, with excess to payroll withholding. OZs and MZs, as well as Georgia’s 40 least-developed counties, offer job tax credits to businesses of any nature, including retail businesses that create at least two net new jobs.
LDCTs, OZs, and MZs are located throughout the state and the job threshold requirement, job tax credit value, and use of credits allowed in these areas supersedes those of the county in which these designated areas are located.
Job Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40 and rules published by the Georgia Department of Community Affairs in Chapter 110-9.1.
Port Tax Credit Bonus
The Port Tax Credit Bonus is available to taxpayers who qualify for the Job Tax Credit or the Investment Tax Credit, and they 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 (twenty-foot 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 either the Job or the Investment Tax Credit program, provided that the company meets the requirements for one of those programs. 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 levels established in year one for eligibility and that the company continues to meet the job or investment tax credit requirements. Note that the Port Tax Credit Bonus cannot be utilized with the Quality Jobs Tax Credit. Port Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.15.
Port Tax Credit Bonus for Job Tax Credits
This “port bonus” is an additional $1,250 per job per year for up to five years for taxpayers with qualified increases in shipments through a Georgia port. The $1,250 is added to the Job Tax Credit.
Example: If you create 50 jobs in a Tier 1 county and increase port traffic by at least 10 percent then you are eligible to receive the Port Tax Credit Bonus. You receive $1,312,500 in tax credits spread over five years to reduce or eliminate Georgia income tax: [50 jobs x ($4,000 job tax credit + $1,250 port tax credit bonus) x 5 years] = $1,312,500.
Port Tax Credit Bonus for Investment Tax Credits
This “port bonus” increases the Investment Tax Credit to the equivalent of a Tier 1 location regardless of the tier level; therefore it would 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.
Example: You qualify for a port bonus in a Tier 4 county, investing $100 million in a manufacturing plant plus $25 million in recycling equipment. You are 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.
Foreign Trade Zone
Georgia is home to multiple FTZ sites and is a recognized leader in working with companies to facilitate use of the program. Importing and exporting are central to many businesses’ success, and the program streamlines those activities and lowers costs. The FTZ program allows qualified companies to defer, decrease, or eliminate duties on materials imported from overseas that are used in products assembled in Georgia. Whether a company’s needs are best served by locating in one of Georgia’s industrial parks with FTZ designation, or applying for FTZ designation of an individual facility located elsewhere in Georgia, GDEcD can provide the right contacts to assist with the process.
Quality Jobs Tax Credit
Companies may receive Quality Jobs Tax Credits (QJTC) if, during a 12-month period, they create and maintain at least 50 net new jobs that pay at least 110 percent of the county’s average wage. The QJTC value ranges from $2,500 to $5,000 per job, per year, for up to five years.
After qualifying, a company can earn additional QJTC credits ($2,500 to $5,000 per job per year, for up to five years) over the next seven years by creating and maintaining additional qualifying jobs. New jobs created after the seven-year period ends do not earn QJTC credits unless the project creates at least 50 net new qualifying jobs in a 12-month period again to begin another seven-year cycle.
QJTC may be applied against 100 percent of the state corporate income tax liability, and once that liability has been exhausted, the credits may be used to offset the company’s state payroll withholding. Claimed but unused credits may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established.
New jobs that do not meet the requirements for the QJTC may count toward Job Tax Credits if they meet the eligibility requirements for that program separately. For current average county wages, visit Explorer.DOL.State.GA.US/mis/Current/ewcurrent.pdf. QJTCs are subject to requirements outlined in O.C.G.A. § 48-7-40.17 and rules published by the Georgia Department of Revenue in regulation 560-7-8-.51. Example: You create 75 new jobs in a Tier 1 county that is part of a Joint Development Authority (JDA). You also create 50 jobs above the QJTC wage requirement, with an average wage for those qualifying jobs of 205 percent above the county average. This earns a $5,000 QJTC credit for each job. 25 jobs of these do not meet the QJTC wage requirement, but they do qualify for the JTC. This earns a $4,000 JTC credit for each job. You are eligible for $1,750,000 in tax credits [50 jobs x$5,000 QJTC x 5 years + 25 jobs x $4,000 JTC x 5 years = $1,750,000]
Research and Development
Georgia offers 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.
The base amount = Current Year Georgia Gross Receipts x [(the average of the ratios of the company’s qualified Georgia research expenses to Georgia gross receipts for the preceding three taxable years) OR 0.300, whichever is less]. For new Georgia companies or for companies with no prior R&D expenditures in Georgia, the base amount is 30 percent of the current year’s Georgia gross receipts.
The credit is determined by taking the current year’s qualified R&D expenses, subtracting the base amount, and multiplying by 10 percent. The R&D credit is applied to 50 percent of the company’s net Georgia income tax liability after all other credits have been applied. Any excess R&D credits can then be applied to the company’s state payroll withholding. Any unused credits can be carried forward for up to 10 years from the close of the taxable year in which the qualified research expenses were made.
Research and Development Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.12
Mega Project Tax Credit
Companies that hire at least 1,800 net new employees, and either invest a minimum of $450 million or have a minimum annual payroll of $150 million may claim a $5,250 per job, per year tax credit for the first five years of each net new job position. Companies must create the required 1,800 jobs by the close of the sixth taxable year following the withholding start date. However, if a company has invested at least $600 million in qualified investment property by year six, the company will have two additional years (until year eight) to meet the job creation requirement. If a company has invested at least $800 million in qualified investment property by year eight, the company will have two additional years (until year ten) to meet the job creation requirement. Credits are first applied to state corporate income tax liability, with excess credits eligible for use against state 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. If the required 1,800 new jobs are not maintained, the company may be subject to recapture provisions.
Example: You create 2,000 new jobs and invests $500 million in a new facility and equipment. You will be eligible to receive $52.5 million in tax credits over five years to reduce or eliminate Georgia income tax, with any excess credits eligible for use against state payroll withholding. [2,000 jobs x $5,250 credits/job x 5 years = $52.5 million].
Mega Project Tax Credits are subject to detailed program requirements as outlined in O.C.G.A. § 48- 7-40.24
Child Care Tax Credits
The Child Care Tax Credit is for employers who purchase or build qualified child care facilities, or who provide or sponsor child care for employees.
For employers who purchase or build a state licensed facility, the credit is equal to 100 percent the cost of construction, which is earned over 10 years (10 percent each year). Unused credits can be carried forward for three years.
Employers who provide or sponsor child care are eligible for a credit equal to 75 percent of the employer’s direct costs. Credits that are related to providing or sponsoring child care may be carried forward for five years.
All child care tax credits can be applied to 50 percent of the corporate income tax liability.
Child Care Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.6 and rules published by the Georgia Department of Revenue in regulation 560-7-8-.38.
Sales and Use Tax Exemption
Georgia helps companies lower their cost of doing business by offering the ability to purchase various types of goods and services tax free. These sales tax exemptions are defined in O.C.G.A. § 48-8-3, 48.8-3.2 and 48-8-3.3. Several key exemptions are outlined in the table below:
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
Investment Tax Credit
Existing Georgia companies that have operated a manufacturing or telecommunications facility or manufacturing or telecommunications support facility in Georgia for at least three years, and that make a minimum $50,000 additional qualified capital investment in a new or existing manufacturing or telecommunications facility, may claim from one to five percent (depending on tier status) of the new investment as a tax credit.
Qualified investment expenses include, but are not limited to:
- Amounts Expended on Land Acquisition
- Machinery and Equipment to be Used in a Manufacturing or Telecommunications Facility
- Recycling or Pollution Control Equipment and for Defense Plant Manufacturing Conversion to a New Product
Example: In a Tier 1 county, you invest $100 million in a manufacturing plant plus $25 million in recycling equipment. You are eligible for a $7 million tax credit to reduce or eliminate Georgia corporate income tax. [$100 million x 5%] + [$25 million x 8%] = $7 million.
Investment Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.2, 48-7-40.3, and 48-7-40.4 and in rules published by the Georgia Department of Revenue in regulation 560-7-8-.37
Optional Investment Tax Credits
Optional Investment Tax Credits are available to taxpayers that qualify for investment tax credits, with the minimum investment ranging from $5 million to $20 million (depending on tier status). The duration of a project shall not exceed three years unless expressly approved in writing by the Commissioner of the Georgia Department of Revenue. The aggregate credit amount allowed ranges from six percent of the qualifying capital investment in Tier 3 and 4 counties to 10 percent in Tier 1 counties.
The annual value of the credit is the lesser of:
- Ninety percent of the excess of the taxpayer’s state income tax liability for the applicable year (determined without regard to any credits) over the taxpayer’s base year average tax liability, or
- The excess of the taxpayer’s aggregate credit amount allowed for the applicable year over the sum of the credits under this section already used by the taxpayer in the years following the base year
Optional Investment Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7- 40.7, 48-7-40.8, and 48-7-40.9 and in rules published by the Georgia Department of Revenue in regulation 560-7-8-.40
Georgia Film Tax Credit
The Georgia Entertainment Industry Investment Act offers an across-the-board flat tax credit of 20 percent based on a minimum investment of $500,000 on qualified productions in Georgia.
The $500,000 minimum expenditure threshold can be met with one or the total of multiple projects aggregated. An additional 10 percent uplift can be earned by including an embedded, animated Georgia logo and web link on the project’s promotional webpage, or through approved alternatives if they offer equal or greater marketing opportunities for the state. Qualified expenditures include materials, services and labor.
Eligible productions include:
- Feature Films
- Television Movies
- Pilots or Series
- Music Videos
- Certain Interactive Entertainment Projects (Animation, Special Effects and Video Game Development)
This income tax credit may be used against Georgia income tax liability or the company’s Georgia payroll withholding. If the production company chooses, they may make a one-time sale or transfer of the tax credit to one or more Georgia taxpayers.
Film, Television, and Interactive Entertainment Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.26.
Hiring, Training, and Education
Georgia Department of Economic Development Workforce Division
The Workforce Division (WD) of the Georgia Department of Economic Development is focused on ensuring that education and training in Georgia is geared toward in-demand jobs. WD plays a critical role in maintaining Georgia’s distinction as the No. 1 state in the nation to do business.
Georgia Workforce Division
After you have decided to locate your business in Georgia – the Workforce division can provide access to a number of classroom and on-site training opportunities including work-based learning, on the job training, incumbent worker training and apprenticeship opportunities.
Additionally, the Workforce division can assist in connecting your business with the state’s innovative programs such as the Georgia Department of Labor’s (GDOL) customized recruitment and the nation’s leading training program, Quick Start.
Georgia’s Department of Labor (GDOL) assists employers with recruiting qualified employees by posting notices of their job openings, collecting and screening applications and resumes, referring qualified applicants to the employer for employment interviews, providing office space for interviews, and hosting job fairs and/or individual recruitments. The department’s Business Services Unit will plan and execute customized recruiting for new companies. The GDOL also works with private employment agencies that list job openings with the state.
Quick Start Employee Training
The No. 1 workforce training program in the country, Quick Start, develops and delivers fully customized, strategic workforce solutions for qualified companies investing in Georgia. Quick Start helps companies assess, select and train the right people at the right time for success. Services are provided free of charge as a discretionary incentive for job creation for clients opening or expanding manufacturing operations, distribution centers, headquarters operations and customer contact centers in a broad range of industries.
- Strategic workforce consultation – Quick Start’s training professionals work with company subject-matter experts to guarantee training meets business goals.
- Pre-employment assessment – Helps companies assess candidates according to their own defined criteria and preview their skills.
- Customized post-employment and job-specific training – From fundamental knowledge to supervised on-the-job training on a company’s own technology and processes, Quick Start prepares employees for maximum effectiveness and efficiency.
- Leadership and productivity enhancement training – Businesses maintain competitiveness and emphasize continuous improvement for all team members with Quick Start’s guidance.
Retraining Tax Credit
Part of a company’s direct investment in training fulltime employees can be claimed as a tax credit. The credit is available to all Georgia businesses that file a Georgia income tax return.
Training programs must:
- Be approved by the Technical College System of Georgia
- Train in quality and productivity enhancements or certain software technologies
Retraining tax credits can be:
- Used to offset up to 50 percent of a company’s state corporate income tax liability
- Carried forward for 10 years if they are not used during a tax year
- Combined with other tax credits
HOPE Scholarship and Grant Program
HOPE — Helping Outstanding Pupils Educationally — is Georgia’s unique scholarship and grant program that rewards students with financial assistance in degree, diploma and certificate programs at eligible Georgia public and private colleges and universities, and public technical colleges.
The HOPE Scholarship is available to Georgia students who meet academic requirements and covers 75-100 percent of tuition costs for degree programs in Georgia’s public colleges and universities.
The HOPE Grant provides tuition assistance to Georgia residents seeking a technical degree or certificate at one of Georgia’s technical colleges, regardless of the student’s high school grade point average or graduation date. These programs can be advantageous to relocating families with children, and for companies training employees through local technical colleges.
Georgia Student Finance Commission
University System of Georgia Economic Development
The Board of Regents of the University System of Georgia (USG) drives the success of Georgia’s knowledge-based economy by providing industries, economic developers, students and faculty with a gateway to the research, services and intellectual assets needed to create and attract new companies, support the success of existing businesses and create a better quality of life in Georgia’s communities.
The USG Office of Economic Development acts as a bridge that facilitates collaborations between the System Office, the 30 institutions of the University System, the Georgia Department of Economic Development, Georgia’s businesses and local economic development communities across the state.
University System of Georgia/Economic Development Services
Assistance for Small Businesses and Entrepreneurs
Small businesses can qualify for many of the programs outlined in this brochure. In addition, Georgia offers several programs specifically designed to meet the needs of small businesses and entrepreneurs.
Angel Investor Tax Credit
Georgia offers an income tax credit for qualified investors who invest in certain qualified businesses in Georgia through calendar year 2015. The credit is claimed two years after the investment is made. For example, a qualified investment in 2015 is claimed on the 2017 tax return. The credit is 35 percent of the investment with an individual investor cap of $50,000 per year. The aggregate annual cap for this program is $5 million. The qualified investor must get approval from the Georgia Department of Revenue before claiming the credit. Angel Investor Tax Credits are subject to program requirements as outlined in O.C.G.A. § 48-7-40.30 and rules published by the Georgia Department of Revenue in regulation 560-7-8-.52.
State Small Business Credit Initiative (SSBCI)
The State Small Business Credit Initiative is designed for small business lending through banks or Community Development Financial Institutions (CDFIs) offering loan guarantees and partnership lending opportunities.
Entrepreneur and Small Business Loan (ESB) Guarantee Program
In partnership with the OneGeorgia Authority, the state can provide loan guarantees to spur entrepreneurial growth in specified rural communities throughout Georgia. The guaranteed amounts can range between $35,000 and $250,000 and can be used for hard assets or for start-up and working capital. They require a 10 percent cash equity injection by the borrower.
Centers of Innovation
Exclusive to Georgia, the Centers of Innovation provide the technical industry expertise, collaborative research, and partnerships to help the state’s strategic industries connect, compete and grow globally. As a division of the Department of Economic Development, the six individual centers operate statewide with a focus on: Aerospace, Agribusiness, Energy Technology, Information Technology, Logistics and Manufacturing.
Georgia businesses receive:
- Focused, deep technical industry expertise
- Identification of new markets and business opportunities
- New product commercialization and development assistance
- Access to ground breaking research and collaborations
- Business, academic and government partnerships
Georgia Department of Economic Development
75 5th Street N.W., Suite 1200
Atlanta, GA 30308
1-800-255-0056 for the hearing impaired Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated January 2016.