Ga. Comp. R. & Regs. R. 110-9-1-.01 - Introduction and Definitions

(1) Authority for Regulations. O.C.G.A. § 48-7-40, § 48-7-40.1, § 48-7-40.23, and § 36-62-5.1.

(2) Administrative Agencies. The Georgia Department of Community Affairs (DCA) and the Georgia Department of Revenue have been designated as the responsible agencies within the State of Georgia to administer the Job Tax Credit Program for less developed areas.

(3) Program Purpose. The purpose of the Job Tax Credit Program is to encourage the further economic development of the state.

(4) Program Objective. The Job Tax Credit Program is designed to encourage businesses to locate and expand in the state.

(5) Program Description. The Job Tax Credit Program provides tax credits under O.C.G.A. § 48-7-2 for certain business enterprises that create and retain jobs in areas designated as less developed. A minimum number of new full-time employee jobs must be created before any credit may be received.

(6) Definitions.

(a) Less Developed Areas -- means certain counties and certain census tract areas that meet applicable requirements in law and regulation. Less developed census tract areas mean areas in this state which are composed of 10 or more contiguous census tracts, each of whom is equal to or worse than the benchmark county based on a calculation of the following economic indicators: highest unemployment rate; lowest per capita income; and highest percentage of residents whose income is below the poverty level. Comparisons between census tracts and the benchmark county will be based on data from the Department of Labor and the United States Department of Commerce.

(b) Business Enterprise -- means any corporation, partnership, limited liability company, or sole proprietorship, or the headquarters of any such corporation, partnership, limited liability company, or sole proprietorship, which is engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, research and development, or tourism in a less developed area. Such term does not include retail businesses. The definition of Business Enterprise under the county tier program in O.C.G.A. § 48-7-40 shall also include any business which is engaged in services for the elderly and persons with disabilities. For the purpose of determining which businesses are engaged in the qualifying activities, classifications will be made for individual establishments defined pursuant to Department Rule 110-9-1-.01(6)(d) using the latest published North American Industry Classification System (NAICS Code), United States, with the business being eligible for the tax credit based on the individual establishment. If the NAICS Code cannot be clearly defined, the business may request a determination as outlined in Department Rule 110-9-1-.03(11).

1) Manufacturing means those establishments classified by the NAICS Code that belong to Sectors 31-33.

2) Warehousing and distribution means a warehouse, facility, structure, or enclosed area which is used primarily for the storage, shipment, preparation for shipment, or any combination of such activities, of goods, wares, merchandise, raw materials, or other tangible personal property, and those establishments classified by the NAICS Codes that belong to Subsectors 423, 424 and 493. In addition, establishments primarily engaged in scheduled freight air transportation, and included in NAICS Code 481112; establishments primarily engaged in nonscheduled chartered freight air transportation, and included in NAICS Code 481212; establishments primarily engaged in line-haul railroads; establishments primarily engaged in short line railroads, and included in NAICS Code 482112; establishments which are primarily engaged in deep sea freight transportation, and included in NAICS Code 483111; 483211, establishments primarily engaged in inland water freight transportation; establishments classified by the NAICS Codes that belong to Industry Group 4841; 484220, establishments engaged in specialized freight (except used goods) trucking, local; 484230, establishments in specialized freight (except used goods) trucking, long-distance; 485111, establishments engaged in mixed mode transit systems; 486110, establishments primarily engaged in pipeline transportation of crude oil; 486210, establishments primarily engaged in pipeline transportation of natural gas; 486910, establishments primarily engaged in pipeline transportation of refined petroleum products; 486990, establishments engaged in all other pipeline transportation; 488320, establishments which are primarily engaged in marine cargo and handling; 488510 establishments primarily engaged in freight transportation arrangement are included. In addition, NAICS Code 541611 is eligible, but only as it associates to establishments that provide consulting services to clients relating to the physical distribution of goods and services.

3) Processing includes, without limitation, (a) manufacturing establishments classified in NAICS Sectors 31-33 and processing establishments classified in NAICS Sector 21; and (b) those establishments primarily engaged in providing data processing services, and further means only the following establishments in addition to Sectors 31-33 of the NAICS Code: establishments that are both primarily engaged in pharmacy benefits management and other third-party administration of insurance and pension funds, and included in NAICS Code 524292; establishments that are both primarily engaged in providing automated clearinghouses, check clearinghouse associations, and included in NAICS Code 522320; establishments that are both primarily engaged in furnishing physical or electronic marketplaces for the purpose of facilitating the buying and selling of stocks, stock options, bonds or commodity contracts and included in NAICS Code 523210; establishments that are both primarily engaged in providing computer systems design and related services, and included in NAICS Industry Group 5415; establishments that are both primarily engaged in producing and distributing computer software, and included in NAICS Code or 513210; establishments that are both primarily engaged in providing data processing services, and included in NAICS Code 518210; establishments that are both primarily engaged in providing payroll services, and included in NAICS Code 541214; establishments that are both primarily engaged in providing financial transaction or credit card processing services, and included in NAICS Code 522320; establishments that are both primarily engaged in testing laboratories and services and included in NAICS Code 54138; establishments that are both primarily engaged in Medical and Diagnostic Laboratories, and included in NAICS Industry Group 6215.

4) Telecommunications means those establishments that are primarily engaged in operating, maintaining and/or providing access to facilities for the transmission of voice, data, text, sound and video and classified within NAICS Codes 514111, 517111, 517112, and 517810; and establishments that are both primarily engaged in providing telephone call center services comprising telephone answering services and telemarketing bureaus and other contact centers, and included in NAICS Industry Code 56142; with the exception of telecommunication resellers and agents

5) Broadcasting means the transmission or licensing of audio, video, text, or other programming content to the general public, subscribers, or to third parties via radio, television, cable, satellite, or the Internet or Internet Protocol and includes motion picture and sound recording, editing, production, postproduction, and distribution, and is limited to those establishments that are primarily engaged in broadcasting and included in NAICS Subsector 516; establishments that are primarily engaged in Internet publishing and broadcasting and included in NAICS Subsector 519; establishments that are primarily engaged in telecommunications and included in NAICS Subsector 517 with the exception of telecommunication resellers and agents; and establishments that are primarily engaged in motion picture and sound recording industries and included in NAICS Subsector 512.

6) Research and development means only the following establishments: establishments primarily engaged in conducting research and experimental development in the physical, engineering and life sciences and classified in NAICS Industries 54171; establishments primarily engaged in conducting research and analyses in cognitive development, sociology, psychology, language, behavior, economic, and other social science and humanities research and classified in NAICS Code 541720; and establishments primarily engaged in space research and technology and included in NAICS Subsector 927.

7) Tourism means only the following establishments: establishments that are both primarily engaged in providing lodging for the public, and included in NAICS Industry Group 7211, provided that establishments offering lodging for more than 30 consecutive days to the same customer shall not qualify for a tax credit under this provision; establishments that are both primarily engaged in providing overnight or short term sites for recreational vehicles, trailers, campers or tents, and included in NAICS Code 721211, provided that establishments primarily engaged in the operation of residential trailer parks or primarily engaged in providing accommodations for more than 30 consecutive days to the same customer shall not qualify for a tax credit under this provision; establishments that are both primarily engaged in the operation of convention centers, and included in NAICS Code 711310; establishments that are both primarily engaged in the operation of sports stadiums or arenas, and included in NAICS Code 711310; establishments that are both primarily engaged in the operation of recreational camps, and included in NAICS Code 721214, provided that establishments primarily engaged in the operation of summer camps shall not qualify for a tax credit under this provision; establishments that are both primarily engaged in the operation of golf courses open to the general public on a contract or fee basis, which are associated with a resort development, and included in NAICS Code 713910, provided that establishments primarily engaged in the operation of golf courses associated with housing developments shall not qualify for a tax credit under this provision; establishments that are both primarily engaged in the operation of sports complexes open to the general public on a contract or fee basis, and included in NAICS Code 711310; establishments that are both primarily engaged in the operation of professional or semi-professional sport clubs, and included in NAICS Code 711211, provided that for the purposes of this provision professional and semi-professional sport clubs include only those clubs which compensate athletes for their services as players and such term does not include amateur sport clubs, amateur sport leagues, or amateur sport associations; establishments that are both primarily engaged in the operation of racing facilities, including drag-strips, motorcycle race tracks, auto or stock car race tracks or speedways, and included in NAICS Code 711212; establishments that are both primarily engaged in the operation of amusement centers, amusement parks, theme parks, or amusement piers, and included in NAICS Code 713110; establishments that are both primarily engaged in the operation of tours within the State of Georgia, and included in NAICS Code 561520; establishments that are both primarily engaged in the operation of airplanes, helicopters, buses, trolleys, vans, scenic railroads, aerial tramways, or boats for excursion or sightseeing purposes within the State of Georgia, and included in NAICS Subsector 487; establishments that are both primarily engaged in the operation of hunting preserves, trapping preserves, or fishing preserves or lakes which are open to the general public on a contract or fee basis for fin fish, shell fish, or other marine fishing, which are included in NAICS Codes 114111, 114112, 114119, and 114210; and establishments that are both primarily engaged in the operation of museums, planetariums, art galleries, botanical gardens, aquariums, or zoological gardens, and included in NAICS Subsector 712, provided that establishments which derive 50% or more of their gross revenue from the sale of goods or merchandise shall not qualify for a tax credit under this provision.

8) Services for the elderly and persons with disabilities means establishments primarily engaged in providing nonresidential social assistance services to improve the quality of life for the elderly, persons diagnosed with intellectual and developmental disabilities, or persons with disabilities and included in NAICS Code 624120. The inclusion of this industry under the Business Enterprise definition is only applicable to establishments which qualify for the job tax credit under the county tier provision under O.C.G.A. § 48-7-40 and is not applicable to establishments which qualify for the census tract provision under O.C.G.A. § 48-7-40.1.

(c) Retail Business -- means any establishment that is primarily engaged in retailing merchandise and rendering services incidental to the sale of merchandise and included in NAICS Sector 44-45; any establishment that is primarily engaged in providing professional services and included in NAICS Industry Groups 5411, 5412 and 5413; and establishments that are primarily engaged in banking, savings and lending functions and included in NAICS Industry Groups 5211, 5221, 5222, 5231, and 5239, and NAICS Industries 52231 and 52239.

(d) Establishment -- means an economic unit at a single physical location where business is conducted or where services or industrial operations are performed. This is specifically where an employee's job is performed. Note that if more than one business activity is conducted at the establishment then only those jobs engaged in a qualifying activity will be eligible. For example, a retail establishment which also has a distribution activity serving the southeast will only be eligible for the jobs engaged in the qualifying distribution activity and not for any retail jobs.

(e) Benchmark County -- means the county according to the most recent data from the Department of Labor and the United States Department of Commerce that ranks seventy-first from the bottom county on the following factors: highest unemployment rate; lowest per capita income; and highest percentage of residents whose income is below the poverty level. This county's scores will be the benchmark for determining census tracts that are potentially eligible for inclusion in less developed census tract areas.

(f) Competitive project -- means the expansion or location of some or all of a business enterprise's operations in this state having significant regional impact where the commissioner of economic development certifies that but for some or all of the tax incentives provided under O.C.G.A. § 48-7-40, the business enterprise would have located or expanded outside this state. Businesses claiming the tax credit under this provision must provide certification from the commissioner of economic development when claiming such credit on the Georgia Corporation Income Tax return.

(g) New Full-Time Employee Job (also "New Job") -- means a newly created position of employment by a Georgia employer, requires a minimum of 35 hours worked each week, and pays at or above the average wage earned in the county with the lowest average wage in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor, but does not mean a job classified for federal tax purposes as an independent contractor. This determination occurs when a new or expanded operation is first staffed and does not include staff replacement or transfer.

1) Part-time jobs that become full-time jobs shall be considered new full-time employee jobs for the purposes of the Job Tax Credit Program. Part-time jobs may not be aggregated to establish full-time equivalents for the purposes of the Job Tax Credit Program.

2) Leased employees will, for the purposes of the Job Tax Credit Program, be considered employees of the company using the services of the leased employees. Leased employees and other employees may be counted toward new job totals for purposes of determining a business enterprise's job tax credit when such employees otherwise meet the definition of full-time job contained herein. Leased employees and other employees that do not meet the definition of full- time job contained herein may not be counted toward job totals. (Note that only the business enterprise using the services of leased employees may claim credit for such employees so long as the business enterprise retains control of the business location and does not delegate such control to the leasing company.)

3) Special circumstances affecting the ability for employees to count new full-time employee jobs include the following:

(i) When a business purchases or leases existing assets and uses those assets for a substantially different process than their immediate prior use, the rule does not apply, and no approval is required from the commissioner of community affairs.

(ii) When a seasonal business purchases or leases existing assets, the assets must have been out of service for one year or longer unless otherwise approved by the commissioner of community affairs.

(iii) Any time a business is uncertain whether or not new jobs have been created based on this paragraph, the business shall seek a ruling from the commissioner of community affairs before claiming any credits.

(h) Headquarters -- means the global or national administrative offices of a business enterprise that is primarily engaged in performing management and general administrative functions for such business enterprise. If a business has headquarters that provides services to business enterprises, such business must derive at least 51 percent of its sales from the operations of its business enterprises in order for such business's headquarters to be potentially eligible for tax credits under these regulations.

(i) Maintained Job -- means any new full-time employee job continued for all or part of the consecutive four-year period after its creation.

(j) Military Zone -- means an area designated by the commissioner of community affairs under the provision of O.C.G.A. § 48-7-40.1(c)(2) or (2.1).

1) For Military Zones designated under the provision of O.C.G.A. § 48-7-40.1(c)(2), the designation shall include any "area composed of one or more census tracts adjacent to a federal military installation where pervasive poverty is evidenced by a fifteen (15) percent poverty rate or greater as reflected in the most recent decennial census."

2) For Military Zones designated under the provision of O.C.G.A. § 48-7-40.1(c)(2.1), census tracts may be designated by the commissioner of community affairs to receive Military Zone designation if the census tract is in a county that contains a federal military installation with a garrison of at least 5,000 federal or military personnel combined, and contains an industrial park that is owned and operated by a governmental entity.

3) Any designation made by the commissioner of community affairs under O.C.G.A. § 48-7-40.1(c)(2) or (2.1) shall be made by December 31 of each year.

4) Businesses locating within a designated Military Zone must meet all eligibility requirements for the Job Tax Credit prior to filing for the credit on the tax return.

(k) Government Owned Industrial Park -- means an Industrial Park, that at the time of formation or establishment, was wholly owned by one or more units of state, local municipal government, including any eligible authority, and which is intended to market, attract, and locate private industrial business operations.

(l) Industrial Park -- means an area comprised of 25 acres or more of developable land, which has been zoned industrial or its equivalent if industrial zoning does not exist within the applicable jurisdiction. The area shall also contain readily available water and sewer infrastructure on-site or at a minimum, adjacent to the site.

(m) Opportunity Zone -- means an area designated by the commissioner of community affairs, with the agreement of the commissioner of economic development, under the provision of O.C.G.A. 48-7-40.1(c)(4) and Department Rule 110-24-1. Businesses locating within a designated Opportunity Zone must meet all eligibility requirements for the Job Tax Credit and have an Opportunity Zone Certification form certified by the local Opportunity Zone coordinator and acknowledged by DCA prior to filing the tax credit on the corporation income tax return. The completed Certification form must be filed with the tax return when claiming the credit.

(n) Prior Year/Base Year -- means the tax year immediately prior to Year One.

(o) Replacement Job -- means a job created by an employer in Georgia that takes the place of a job that was interrupted due to a manmade or natural disaster. Neither the length of the interruption nor the location of the replacement job will affect eligibility for the Job Tax Credit Program.

(p) To Generate/Trigger Credits -- means to meet all requirements in law and regulation for the tax credits allowed under O.C.G.A. § 48-7-2 except for maintenance of jobs in all or part of the subsequent four years after their creation. Credits are not affected by a county's or census tract area's status once credits have been generated.

(q) Transferred Job -- means a job that is relocated by a business or related businesses from one Georgia establishment to another, or a job that is created by a business or related business that is substantially the same as a previously existing job of such business or related business at a location in Georgia that has ceased operations for six months or less. Because the Job Tax Credit is calculated by taxpayer, by county or census tract area, jobs that are relocated from one establishment to another within the same county or census tract area by the same taxpayer are not considered transferred jobs. If the duties of a transferred job are substantially different from those at the former location, the business may request in writing that the commissioner of community affairs determine whether or not the job is a new job for the purposes of the Job Tax Credit Program. Only after the commissioner of community affairs has determined that the job is a new job may any credits be earned. Similarly, new jobs that are transferred during years one through five from their original location to another county or less developed census tract area may not earn credits after their transfer unless otherwise approved by the commissioner of community affairs.

(r) Telecommuter employee job - means a newly created position of employment by a Georgia employer only during tax years 2020, 2021 or 2022, requires a minimum of 35 hours worked each week at a location that may not necessarily be at the establishment location, and pays at or above the average wage earned in the county with the lowest average wage in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor. This does not mean a job classified for federal tax purposes as an independent contractor. This does not include staff replacement or transfer. This does not include telecommuting from out-of-state. The telecommuting employee must live and work in Georgia to qualify for the job tax credit program under this definition.

1) Current employees who are being counted for the job tax credit program and become telecommuters during the COVID-19 crisis during tax years 2020, 2021 or 2022 may continue to be counted as a qualified job for purposes of the job tax credit program, as long as all of the requirements including wages, hours, and health insurance are being met while being a telecommuter.

2) Part-time telecommuter jobs that become full-time jobs shall be considered a new full-time telecommuter employee jobs for the purposes of the Job Tax Credit Program under this special definition. Part-time jobs may not be aggregated to establish full-time equivalents for the purposes of the Job Tax Credit Program.

(s) Year One -- means the tax year in which sufficient new jobs are created that, meeting the requirements of these regulations, entitle a business enterprise to tax credits in years one through five after the creation of the new jobs.

(t) Years One Through Five -- means the consecutive five-year period in which job tax credits may be allowed for the new jobs created in year one as well the subsequent four years in which additional new jobs may be created that may also qualify for job tax credits.

(u) Auxiliary Establishment -- means an establishment primarily engaged in performing management or support services for other establishments of the same business. Auxiliary establishments will be included in the definition of business enterprise only when they are primarily engaged in providing the products or services provided by otherwise eligible business enterprises.

(v) Leased Employee -- means an employee of an employee leasing company, as defined by the O.C.G.A. § 34-8-32 paragraph (a). Leased employees will, for the purposes of the Job Tax Credit Program, be considered employees of the company using the services of the leased employees. Leased employees and other employees may be counted toward new job totals for purposes of determining a business enterprise's job tax credit when such employees otherwise meet the definition of full-time job contained herein. Leased employees and other employees that do not meet the definition of full-time job contained herein may not be counted toward job totals. Only the business enterprise using the services of leased employees may claim credit for such employees so long as the business enterprise retains control of the business location and does not delegate such control to the leasing company.

(w) Wage -- means the total dollars paid (including bonuses, incentive pay, etc.) to the employee (whether hourly or salaried) during the year (i.e., income as reported on Form W-2). Wage does not mean contributions made by employers on behalf of employees to health insurance, retirement, or other benefit programs. This definition is consistent with and patterned after the definition of average weekly wages contained in the most recent annual Georgia Employment and Wages Averages Report. The wage requirement must be met each and every year the employee/job is being used to calculate the credit in each of the Years 1-5.

Notes

Ga. Comp. R. & Regs. R. 110-9-1-.01

O.C.G.A. §§ 48-7-40; 48-7-40.1; 36-62-5.1.

Original Rule entitled "Introductions and Definitions" adopted as ER. 110-9-1-0.2-.01. F. June 16, 1995; eff. June 14, 1995, the date of adoption. Amended: Permanent Rule of same title adopted. F. Aug. 17, 1995; eff. Sept. 6, 1995. Amended: F. Feb. 27, 1998; eff. Mar. 19, 1998. Amended: F. Dec. 11, 2000; eff. Dec. 31, 2000. Repealed: New Rule of same title adopted. F. Apr. 23, 2002; eff. May 13, 2002. Amended: F. Apr. 18, 2003; eff. May 8, 2003. Amended: F. Jan. 14, 2008; eff. Feb. 3, 2008. Repealed: New Rule of same title adopted. F. Oct. 30, 2009; eff. Nov. 19, 2009. Amended: F. Oct. 22, 2013; eff. Nov. 11, 2013. Amended: F. Dec. 2, 2016; eff. Jan. 1, 2017, as specified by the Agency. Amended: F. Feb. 28, 2017; eff. Feb. 8, 2017, as specified by the Agency. Amended: F. Aug. 22, 2018; eff. Sept. 11, 2018. Amended: F. June 2, 2020; eff. June 22, 2020. Amended: F. Sep. 9, 2022; eff. Sep. 29, 2022. Amended: F. Nov. 21, 2022; eff. Dec. 11, 2022.