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Georgia

Business Incentives and Resources

Tax Credits Tax Exemptions Training Related Programs

Financing Programs Other Programs and Services

The information summarized on the Georgia Business Incentives and Resources web page was obtained primarily from a publication developed by the Georgia Department of Community Affairs: Economic Development Financing Packet. The publication is posted as PDF file, in its entirety, on the web site www.dca.state.ga.us and contains detailed information on a variety of state tax incentives and training resources, as well as other organizations that provide services to industry. SPI South has highlighted below some business incentives that Georgia offers, and other helpful services. However, the Department of Community Affairs publication above contains many more programs and services that may be advantageous to your company. The Georgia Economic Developers Association has another helpful web site.

Tax Credits

The following programs under the Georgia Business Expansion and Support Act provide a number of tax credits for various job creation, investment, retraining, machinery and businesses expansion projects. Details on each credit are found on pages 17-20 of the Economic Development Financing Packet,

Job Tax Credit provides a tax credit for any business or headquarters of a business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. The amount of the tax credit depends on the number of full-time jobs a company creates and how the county that the company is located in is rank relative to its unemployment rate, per capita income and the percentage of resident with incomes below the poverty level.

The average wages for the new jobs must be above the average wages of the county in the state with the lowest average wages, and the employer must make health insurance available to employees filling the new jobs but are not required to pay for the cost of insurance unless it does so for existing employees. Credits are allowed for five years in years two through six after the creation of the jobs. Depending on how a county is ranked, the total credit amount may offset up to 50% to 100% of a taxpayer's state income tax liability for a taxable year. In less developed counties, credits may be taken against a company's income tax withholding. Unused credits claimed in any taxable year may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established. For more information on the Job Tax Credit, click here, or call (404) 679-4825.

Job Tax Credit for Joint Development Authorities provides for an additional $500 job tax credit per job for a business locating within the jurisdiction of a joint authority of two or more contiguous counties.

Investment Tax Credit allows a taxpayer that has operated an existing manufacturing or telecommunications facility or manufacturing or telecommunications support facility in the state for the previous three years to obtain a credit against income tax liability. A company must invest $50,000 in expansion to receive a 1% to 5% credit, depending on the counting ranking. The percentage amount of the credit increases if the expansion includes recycling, pollution control, and defense conversion activities.

Optional Investment Tax Credit may be claimed for 10 years by taxpayers qualifying for the investment tax credit, provided that the qualifying property remains in service throughout that period and meets the minimum investment criteria for the designated county. Depending on the county ranking, tax credits may be as high as 10% for a minimum investment of $5 million. The optional investment tax credit is calculated based upon a three-year tax liability average, with the annual credits determined using this base year average

Retraining Tax Credit allows some employers to claim certain costs of retraining employees to use new equipment, new technology, or new operating systems. The credit can be worth 50% of the direct costs of retraining full-time employees up to $500 per employee per approved retraining program per year. The credit cannot be more than 50% of the taxpayer's total state income tax liability for a tax year. Credits claimed but not used may be carried forward for 10 years. For more information call (404) 679-1703. To go to the Retraining Tax Credit Guide, click here.

Childcare Tax Credits are available to employers who provide or sponsor childcare for employees, making them eligible for a tax credit of up to 75% of their direct costs. The credit cannot be more than 50% of the taxpayer's total state income tax liability for that taxable year. Unused credits claimed in any taxable year may be carried forward for five years from the close of the taxable year in which the cost was incurred. Employers who purchase qualified childcare property will receive a credit totaling 100% of the cost of such property, which is claimed at the rate of 10% a year for 10 years. The qualified property credit may be carried forward for three years from the close of the taxable year in which the qualified property is placed in service, and the limitation on the use of the credit in any one-year is 50%. Recapture provisions apply if the property is transferred or committed to a use other than childcare within 14 years after the property is placed in service. These two childcare credits can be combined.

Research and Development Tax Credit is allowed for expenses for research conducted within Georgia for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. The credit shall be 10% of the additional research expense over the "base amount," provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986. The credit may be carried forward 10 years but may not exceed 50% of the business's net tax liability in any one year. The base amount must contain positive Georgia taxable net income for all years.

Small Business Growth Companies Tax Credit is granted to businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries having a state net taxable income which is 20% or more above that of the preceding year if its net taxable income in each of the two preceding years was also 20% or more. The credit shall be the excess over 20% of the percentage growth and shall not exceed 50% of the business's Georgia net income tax liability. The credit is available to companies whose total tax liability does not exceed $1.5 million.

Ports Activity Job Tax and Investment Tax Credits are granted to businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development that have increased their port traffic tonnage through Georgia ports during the previous 12-month period by more than 10% over their 1997 base year port traffic, or by more than 10% over 75 net tons, five containers or ten 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. The base year port traffic must be at least 75 net tons, five containers, or ten TEU's. If not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or ten TEU's as the base. Companies must meet Business Expansion and Support Act (BEST) criteria for the county in which they are located. The job tax and investment tax credits are an additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit. Companies that create 400 or more new jobs, invest $20 million or more in new and expanded facilities, and increase their port traffic by more than 20% above their base year port traffic may take both job tax credits and investment tax credits.

Headquarters Tax Credit entitles companies establishing or relocating their headquarters to Georgia to a tax credit if they meet certain requirements and the criteria for the county they are in. The credit is equal to $2,500 annually per new full-time job or $5,000 if the average wage of the new full-time jobs is 200% or more of the average wage of the county in which the new jobs are located. The credits apply for five years beginning with the year in which jobs are placed in service. The credit may be taken against Georgia income tax liability and a company's withholding taxes. Credits may be carried forward for 10 years. For more information on the criteria for the Headquarters Tax Credit, click here.

Tax Exemptions

Sales and Use Tax Exemption for Manufacturing Machinery used directly in the manufacture of tangible personal property in a manufacturing plant presently existing in this state. This exemption is eligible for replacement or upgrade machinery, machinery components, machinery incorporated for the first time into new or existing plants, machinery used directly in the remanufacture of aircraft engines, parts, and components on a factory basis, as well as the sale of machinery, equipment, and materials used in the construction or operation of a clean room of Class 100 or less. The exemption also applies to the first $150,000 on the sale or use of each repaired or replacement parts, machinery clothing, molds, dies or tooling and is phased-in in 20% increments from January 1, 2001 to January 1, 2005. Additionally, the sale or lease of computer equipment to be used in this state to any high-technology company classified under certain NAICS Codes where such sale of computer equipment for any calendar year exceeds $15 is exempt, as well as overhead material consumed in the performance of certain contracts with the Department of Defense or NASA.

Primary Materials Handling Sales Tax & Use Exemption applies to the Purchases of primary material handling equipment and racking systems that are used directly for the storage, handling, and moving of tangible personal property in a new or expanding warehouse or distribution facility when such new facility or expansion is valued at $5 million or more and does not have greater than 15% retail sales.

Electricity Sales Tax Exemption is for electricity purchased that is directly involved with the manufacture of a product for which the total cost of the electricity exceeds 50% of the cost of all materials used, including electricity, to make the product. It allows 20% exemption increments on the sales tax and is available for new and existing firms.

For more information on income tax credits, call (404) 656-4171; and for sales tax exemptions, call (404) 656-4060.

Training Related Programs

Quick Start Program provides high-quality, customized training services at no cost to a wide variety of new or expanding businesses in Georgia, so they can begin quality operations as quickly as possible. These services cover job specific skills as well as automation, productivity enhancement and human resource development training. The program is structured to be flexible and responsive to a companies needs by assigning company's a Certified Economic Developer Trainer (CEDT) from the technical colleges to coordinate your training project. Training can be delivered at a company's facility or at one of Georgia's 34 technical colleges, 17 satellite campuses and four associated university programs. To go to the Quick Start web site, click here.

Apprenticeship In Mold-Making program was developed by the Department of Technical and Adult Education to address the serious challenge of the plastics industry in finding well-trained, experienced mold-makers. This three-year program is the result of a partnership between Griffin Technical College, Quick Start, and Georgia's Plastics Industries. To go to the Mold-making Apprenticeship web site, click here.

Financing Programs

Employment Incentive Program (EIP) is a financing program administered by the State of Georgia's Department of Community Affairs for economic development projects that create employment opportunities for low and moderate income persons through greater job security, better working conditions, training, and advancement opportunities. EIP grants are made to local governments who may then loan the proceeds to a sub-recipient industry to finance fixed assets to be used in an eligible economic development projects such as land, new facilities, rehabilitation of existing facilities, machinery, and equipment. The maximum EIP grant or loan amount is $500,000. Each dollar in EIP funds must leverage a minimum of one dollar in private investment. For more information call, (404) 327-6841 or go to page 8 of the Economic Development Financing Packet. For Application Information, click here and scroll to the bottom of the page.

Industrial Development Bond (IDB) Program provides below-market interest rate financing through the sale of tax-exempt bonds and is available at the state and local level for the construction or improvement of manufacturing facilities. IDB financing is typically structured as public sales in the bond market or sold as private placement with interested investors. As bonds are issued and sold, proceeds of the sale are disbursed to the borrower as a loan and issuance fees are paid. The borrower must apply to the local development authorities for approval of the project and a public hearing; have met credit standards and have general financing in place. The project must also commit to creating or retaining 1 job for every $125,000 of financing. For more information, call (404) 679-4943 or go to page 21 of the Economic Development Financing Packet. (Link: ) For Application Information, click here.

Revolving Loan Fund (RLF) Program, through the U.S. Department of Commerce's Economic Development Administration (EDA), are available in ten of Georgia's Regional Development Centers. Revolving loan funds are used to help businesses expand and create jobs and are operated by a local board of directors each having slightly different operating procedures and requirements. For-profit businesses may use loan proceeds to acquire land or fixed assets, or for construction, renovation or working capital. Projects usually require private sector participation and cannot include developer/landlord deals. Amounts financed generally range from $25,000 to $500,000 with terms and interest rates that are typically more favorable than private lenders. Each RLF varies depending upon local policy, however, a borrowers' cash flow must exceed debt service, and adequate collateral is required, as well as personal guarantees. For more information, call (404) 730-3013 or go to page 90-92 of the Economic Development Financing Packet, or the U.S. Department of Commerce web site.

Other Programs and Services

Business Outreach Services and Small Business Development Centers (SBDC) are a public service of the University of Georgia providing businesses with economic development assistance through a network of 20 offices. The SBDCs can assist with business plan development, market research, cash flow analysis, financing alternatives, state and local incentives, and international trade. For a listing of the Small Business Development Centers, go to pages 30-31 of the Economic Development Financing Packet, or go to the Small Business Development Centers' web site.

Economic Development Institute (EDI) at Georgia Tech provides assistance that improves the productivity, quality, and management practices of manufacturing firms in Georgia by working with companies in a collaborative manner to solve problems and investigate opportunities. Some services include facility planning and layout, organizational development, quality systems (ISP 900 and ISA 14000), manufacturing simulation, and production methods improvement. For more information on the EDI services and office locations, go to pages 85-86 of the Economic Development Financing Packet.

Sunbelt U.S. Export Assistance Center (USEAC) is a multi-agency office in Atlanta that assists industry with increasing their international competitiveness, creating new jobs through exports, and expanding into existing and new markets. The USEAC services include market research, marketing, and export financing. Research resources include a resource center with both printed and electronic materials. Marketing programs vary from trade missions led by state program managers to catalogue shows where state employees represent your company's sales materials to foreign buyers. USEAC staff also assists companies with the export finance programs of the Export-Import Bank of the U.S. (ExIm Bank) and the Small Business Administration. For more information, call (404) 657-1964.