Ga. Comp. R. & Regs. R. 110-9-1-.03 - Job Tax Credit
(1)
Eligibility for Job Tax Credit for New Jobs Created in Year One.
Provided that all the provisions of these regulations are met, business
enterprises in counties currently designated as tier 1 counties or less
developed census tract areas shall be allowed a job tax credit for taxes
imposed under O.C.G.A. §
48-7-2 equal to $3,500 annually,
business enterprises in counties currently designated as tier 2 counties shall
be allowed a job tax credit for taxes imposed under O.C.G.A. §
48-7-2 equal to $2,500 annually,
business enterprises in counties designated as tier 3 counties shall be allowed
a job tax credit for taxes imposed under O.C.G.A. §
48-7-2 equal to $1,250 annually,
and business enterprises in counties currently designated as tier 4 counties
shall be allowed a job tax credit for taxes imposed under O.C.G.A. §
48-7-2 equal to $750 annually. The
credit amount allowed for each tier shall apply to each new full-time employee
job created for five (5) years, beginning with years one through five upon the
creation of the job.
(a) A business enterprise
will receive job tax credits in year one for new full-time employee jobs
created in year one. Similarly, a business enterprise will receive job tax
credits in year two for new full-time employee jobs created in year one and
maintained in year two. This method of calculating job tax credits also applies
in years three through five. The number of new full-time employee jobs created
and maintained during years one through five will be calculated in the same
manner as described in Department Rule
110-9-1-.03(1)(c),
i.e., using a comparison of average monthly employment from taxable year to
taxable year.
(b) Only those
business enterprises that increase employment by two or more in a tier 1
county, a Military Zone or an Opportunity Zone shall be eligible for the
credit. Only those business enterprises that increase employment by five or
more in a less developed census tract, not including a Military Zone or an
Opportunity Zone, shall be eligible for the credit. Only those business
enterprises that increase employment by 10 or more in a tier 2 county shall be
eligible for the credit. Only those business enterprises that increase
employment by 15 or more in a tier 3 county shall be eligible for the credit.
Only those business enterprises that increase employment by 25 or more in a
tier 4 county shall be eligible for the credit. The credit shall not be allowed
during a year if the net employment increase falls below the number required in
such tier. Any credit received for years prior to the year in which the net
employment increase falls below the number required in such tier shall not be
affected.
(c) The number of new
full-time employee jobs increase shall be determined by comparing the monthly
average number of full-time employees subject to Georgia income tax withholding
for the taxable year with the corresponding number of the prior taxable year.
The monthly average number of new full-time employee jobs in a taxable year
shall be determined by the following method:
1. for each month of the taxable year, count
the total number of full-time employees of the business enterprise that are
subject to Georgia income tax withholding as of the last payroll period of the
month or as of the payroll period during each month used for the purpose of
reports to the Georgia Department of Labor;
2. add the monthly totals of full-time
employees; and
3. divide the result
by the number of months the business enterprise was in operation during the
taxable year. Note that only an initial start-up year may be calculated at less
than twelve months - see Department Rule
110-9-1-.03(6) for
further clarification. Transferred jobs and replacement jobs may not be
included in the monthly totals.
(d) For business enterprises that made the
election authorized by O.C.G.A. §
48-7-40.23 in 2001 to use a
calendar year for reporting the job tax credit, or for those businesses which
had a change in the taxable period after initially filing for the job tax
credit, then those businesses will continue to utilize the same reporting
period as previously used in claiming the job tax credit regardless of the
actual period covered by the tax return. The calculation of the credit will be
in the same manner described in Department Rule
110-9-1-.03(1)(c)
above, but will use the applicable twelve-month period for the job tax credit
calculation in lieu of the taxable year. See Department Rule
110-9-1-.03(6) for
further clarification on the twelve-month period.
(e) Job tax credits for new full-time
employee jobs created in year one and maintained during a portion of or all of
the following four years will not be affected even if the county/census tract
area, during years two through five, is no longer designated as less developed
or is reclassified.
(2)
Eligibility for Job Tax Credit for Additional New Jobs (Jobs Created
During Years Two Through Five). Tax credits for the taxes imposed under
O.C.G.A. § shall be awarded for additional new full-time employee jobs
created by business enterprises qualified under subsection (b) or (c) of
O.C.G.A. §
48-7-40 and §
48-7-40.1 for the four years
immediately following an eligible Year One. Additional credits are allowed for
additional new full-time employee jobs if the business enterprise already
qualifies for the job tax credit based on new job increases in year one and if
the county/census tract area retains the year one status in the current year.
Additional credits are also allowed for additional new jobs if the business
enterprise already qualifies for the job tax credit based on new job increases
in year one and the additional new full-time employee jobs are created within
the timeframe of a current and accepted notice of intent. Additional new
full-time employee jobs shall mean those new jobs created in year two that
increase an employer's monthly average of full-time employees above the number
of monthly average of full-time employees in year one; and those new jobs
created in year three that increase an employer's monthly average of full-time
employees above the highest number of monthly average of full-time employees
achieved by a business enterprise in previous years beginning with year one,
etc. Additional new full-time employee jobs may only be created in years two
through five, including all subsequent years two through five initiated by a
qualifying increase of new jobs.
(a) The
number of additional new full-time employee jobs shall be determined by
comparing the monthly average number of full-time employees subject to Georgia
income tax withholding for the taxable year, with the corresponding number of
the prior taxable year. The monthly average number of full-time employees in a
taxable year shall be determined by the following method:
1. for each month of the taxable year, count
the total number of full-time employees of the business enterprise that are
subject to Georgia income tax withholding as of the last payroll period of the
month or as of the payroll period during each month used for the purpose of
reports to the Georgia Department of Labor;
2. add the monthly totals of full-time
employees; and
3. divide the result
by the number of months the business enterprise was in operation during the
taxable year. Note that only an initial start-up year may be calculated at less
than twelve months - see Department Rule
110-9-1-.03(6) for
further clarification. Transferred jobs and replacement jobs may not be
included in the monthly totals.
(b) A business enterprise will receive job
tax credits in year two for additional new full-time employee jobs created in
year two. Similarly, a business enterprise will receive job tax credits in year
three for additional new full-time employee jobs created in year two and
maintained in year three. This method of calculating job tax credits also
applies to the remaining three years that an enterprise may receive tax credits
for additional jobs created in year two. This same process applies to
additional new jobs created in years three through five. The number of
additional jobs maintained during years two through five after their creation
will be calculated in the same manner as described in Department Rule
110-9-1-.03(2)(a),
i.e., using a comparison of average monthly employment from taxable year to
taxable year.
(c) Job tax credits
for additional jobs created in years two through five and maintained during a
portion of or all of the following four years after the creation of the
additional jobs will not be affected even if the county/census tract area, at
some point during the years the additional jobs are being maintained, is
reclassified to another tier or is no longer designated as less
developed.
(d) Additional job tax
credit amounts shall be based on the current tier or census tract status of the
area or on the current accepted notice of intent. In addition, job tax credits
for additional jobs shall only be allowed if the business enterprise has met,
in Year One, the net employment increase required by the current status of the
area. If, however, a company has filed a notice of intent that has been
accepted by the commissioner of community affairs and if additional jobs are
created within the time-frame of the notice of intent, credits for these
additional jobs will be allowed if the business enterprise has met, in Year
One, the net employment increase required by the status of the area as
temporarily preserved by the notice of intent filed with the Georgia Department
of Community Affairs.
(e) Credits
for net new jobs may only be claimed in the year the net new job is created.
The only exception is that a job may be counted if a prior part-time position
becomes a full-time position where all other requirements for eligibility are
satisfied. If the credit is not claimed in the year created, those credits are
lost.
(f) The Job Tax Credit for
jobs created in prior years may not be claimed unless the business took the Job
Tax Credit in the year the net new jobs were created. For example, net new
full-time employee jobs were created in a given year. The business creating the
jobs did not claim the job tax credit on said jobs on the tax filing for that
year. The opportunity to claim those credits is lost.
In a subsequent year, the business created additional net new jobs. The business may only claim the jobs tax credit on the additional net new jobs created in the year corresponding with that filing. Jobs created in prior years, without credits having been claimed for the year in which the jobs were created, are ineligible to be counted as new jobs or for any year in the five-year window allowed.
(3)
Additional Job Tax Credit Program
Requirements for All New and Additional Jobs Starting with Taxable Years
Beginning on or After January 1, 2001. These provisions apply to all
counties, as well as to less developed census tract areas.
(a) To qualify for any job tax credits,
business enterprises must make health insurance coverage available to all
employees filling the new or additional new full-time employee jobs; provided,
however, that nothing in these regulations shall be construed to require
business enterprises to pay for all or any part of health insurance coverage
for such employees in order to claim job tax credits if such business
enterprises do not pay for all or any part of health insurance coverage for
other employees. That is, new and additional employees must receive the same
health insurance benefit as existing employees, and, at a minimum, must have
health insurance coverage made available to them. Examples of non-qualifying
coverages include, but are not limited to a stipend paid to the employee,
Health Insurance Exchange / Marketplace coverage, or Affordable Care Act
coverage.
(b) In order for a
business enterprise to demonstrate compliance with this provision, the business
enterprise must maintain written documentation of the employee's health
insurance coverage as offered upon employment. Upon audit, business enterprises
must document the availability of health insurance coverage with insurance plan
documents and other relevant information. For all counties and for less
developed census tract areas, the wage of each new job created must be above
the average wage of the county that has the lowest average wage of any county
in the state as reported in the most recently available annual issue of the
Georgia Employment and Wages Averages Report of the Department
of Labor.
1. The average wage of the county
means the average wage as reported in the most recently available annual issue
of the Georgia Employment and Wages Averages Report of the
Georgia Department of Labor, which is the issue that is available as of the
last day of the tax year in which the jobs are created.
2. The average wage is reported by the
Georgia Department of Labor as a weekly wage. To convert the weekly wage to an
annual wage, multiply the reported weekly wage by 52 weeks.
3. Determination of the wage of each of the
new and additional jobs will be determined based on each new full-time employee
job. Upon audit, business enterprises must document that wage standards as
described herein have been met.
(4)
Initiation of Subsequent Periods of
Eligibility for Job Tax Credits Based on Required Net Employment Increases for
Counties and Less Developed Census Tract Areas. A subsequent year one
and years two through five are created when a business enterprise creates the
required threshold number of new full-time employee jobs or more above its
previous high employment (based on monthly average of full-time employees for
each year) beginning with employment during the business enterprise's first
year of eligibility for the job tax credit (initial year one).
(a) Subsequent periods of eligibility are
subject to all the provisions of these regulations and O.C.G.A. §§
48-7-40,
48-7-40.1, and
36-62-5.1.
(b) Job tax credits generated under previous
periods of eligibility will not be affected as long as the new jobs are
maintained. But no new job tax credits may be generated under previous periods
of eligibility after a subsequent period of eligibility has begun.
(c) If a business enterprise creates the
required number of new jobs to establish a subsequent period of eligibility but
does not meet other requirements in law or regulation pertaining to health
insurance and average wage, no subsequent period of eligibility is established.
In addition, such new jobs may not be counted as additional jobs under a
previous period of eligibility.
(5)
Computation of Job Tax Credit for
Business Enterprises By County/Census Tract Area. If a business
enterprise has multiple locations, each location must calculate the job tax
credit separately based on the county or census tract in which it is located.
However, if locations are in the same county or census tract, they may combine
those locations into one calculation.
(a) When
a single physical location includes both business enterprise activities and
other activities, only employment directly associated with the business
enterprise may be counted toward the number of new full-time employee jobs
needed to generate credits, unless the single physical location is primarily
engaged in eligible activities as defined by these regulations.
(6)
Computation of Job Tax
Credit for Business Enterprises Based On 12 Month Periods Only. Business
enterprises must compute increases and decreases in full-time employee jobs on
the basis of 12-month periods only, even when business enterprises have taxable
years that are not equal to 12 months. The exception to this rule is a business
enterprise which begins operations in mid-year. Initial eligibility for a
start-up operation may be based on less than twelve months. All subsequent job
tax credit calculations must be made on twelve-month periods regardless of
short period returns or changes in tax periods. This may cause the job tax
credit calculation period to be different from the tax year of the business
enterprise.
(7)
Carryforward
of Job Tax Credit and Limitation on Amount of Tax Credit In Any One Taxable
Year. Effective January 1, 2025, any credit claimed under O.C.G.A.
§§
48-7-40,
48-7-40.1, or
36-62-5.1 but not used in any
taxable year may be carried forward for five years from the close of the
taxable year in which the qualified jobs were established. In tiers 3 and 4,
the credit established by O.C.G.A. §§
48-7-40,
48-7-40.1, and
36-62-5.1 taken in any one taxable
year shall be limited to an amount not greater than 50 percent of the
taxpayer's state income tax liability which is attributable to income derived
from operations in this state for that taxable year. In tiers 1 and 2 and in
less developed census tract areas, the credit allowed under O.C.G.A.
§§
48-7-40,
48-7-40.1, and
36-62-5.1 against taxes imposed
under this article in any taxable year shall be limited to an amount not
greater than 100 percent of the taxpayer's state income tax liability
attributable to income derived from operations in this state for such taxable
year, unless otherwise provided by law and regulation.
(8)
Use of Job Tax Credits Against
Income Tax Withholding. This provision allows for business enterprises
which have excess income tax credit to claim such excess credit against
withholding taxes if the business enterprise is located within a tier 1 county
or a less developed census tract, or for projects certified by the commissioner
of economic development.
(a) Business
enterprises in tier 1 counties and in less developed census tract areas shall
be allowed job tax credits as provided in law and regulation. Any lawful
business located within areas specified under O.C.G.A. §§
48-7-40(I),
48-7-40.1(c)(2)
and 48-7-40.1(c)(4)
shall also be allowed job tax credits as provided in law and regulation. When
the amount of such credits exceed income tax liability, the excess may be taken
as a credit against quarterly or monthly payments under O.C.G.A. §
48-7-103 but not to exceed in any
one taxable year $3,500 for each new full-time employee job when aggregated
with the credit applied against income tax liability.
(b) Business enterprises that have a location
or expansion project in this state which has been certified as a competitive
project by the commissioner of economic development under O.C.G.A. §
48-7-40(a)(3)
shall be allowed job tax credits as allowed by law and regulation. When the
amount of such credit exceeds income tax liability credit limitations, the
excess may be taken as a credit against quarterly or monthly payments under
O.C.G.A. §
48-7-103 but not to exceed in any
one taxable year $2,500 for each new full-time employee job in a tier 2 county,
$1,250 for each new full-time employee job in a tier 3 county, and $750 for
each new full-time employee job in a tier 4 county.
(c) Note that DCA will not further regulate
or administer this provision. Refer to the Georgia Department of Revenue
Regulation
560-7-8-.36, Job Tax Credit Rules,
for specific information on utilizing the income tax withholding benefit of the
Job Tax Credit.
(9)
Change of Ownership or Control. The sale, merger, acquisition,
reorganization, or bankruptcy of any business enterprise shall not create new
eligibility in any succeeding business entity. Any unused job tax credit may be
transferred by a business enterprise to any transferee of that business
enterprise. Provided the operations of the business enterprise are essentially
continued by the new entity, new tax credits may be earned by any transferee of
a business enterprise for new full-time employee jobs created by the original
business enterprise as long as those new full-time employee jobs are maintained
by the transferee of the business enterprise and as long as the transferee
meets other applicable requirements in law and regulation.
(a) In the event that business assets have
not been out of service for six (6) months or twelve (12) months for a seasonal
business enterprise, the transferee may petition the commissioner of community
affairs to establish a base level of employment in order to be eligible for
credits of newly created full-time employee jobs. Such application should
include payroll and job-related information from the preceding company, along
with other relevant information that may be useful and/or requested.
(b) In the event that full-time employee jobs
are preserved by the transferee for a substantially different process than
their immediate prior use (i.e., the creation of an essentially different
business enterprise), the transferee (succeeding enterprise) shall consider any
preserved full-time employee jobs or any net new full-time employee jobs added
to the new entity, as net new employee jobs. No approval is required from the
commissioner of community affairs under this scenario.
(c) Any time a business is uncertain whether
or not new jobs have been created based on this paragraph, the business must
seek a ruling from the commissioner of community affairs before claiming any
credits.
(10)
Time
Limit for Claiming Tax Credits. Any tax credit claimed under O.C.G.A.
§§
48-7-40 and
48-7-40.1 must be claimed within
one year of the earlier of the date the original tax return was filed or the
date such return was due, including extensions.
(11)
Request for Determination.
In the event that a business believes it should qualify for the Job Tax Credit
program, but does not clearly meet the eligibility requirements outlined in the
Code and regulation, a Request for Determination may be requested from the
Department of Community Affairs. The business should provide a detailed
explanation of the activity being conducted at the business location for which
the Job Tax Credits are being requested, along with any documentation to
support the request. Once all information necessary to make a determination has
been received, the Department shall have 30 days to complete the review and
issue a determination regarding the eligibility of the business for the job tax
credit program.
(12)
Authority
of the Commissioner of Community Affairs. The commissioner of community
affairs shall determine which businesses are engaged in qualifying activities
and whether or not qualifying net increases or decreases have occurred and may
require reports, promulgate regulations, and hold hearings as needed for
substantiation and qualification.
(13)
Special Provisions.
(a) In counties recognized and designated as
the first through fortieth least developed counties in the tier 1 designation,
job tax credits shall be allowed as provided in these regulations, in addition
to business enterprises, to any business of any nature as provided in O.C.G.A.
§
48-7-40(i).
(b) Beginning with taxable years that begin
on or after January 1, 2004, in areas recognized and designated as Opportunity
Zones under O.C.G.A. §
48-7-40.1(c)(4)
or Military Zones under O.C.G.A. §
48-7-40.1(c)(2),
job tax credits shall be allowed as provided in these regulations, in addition
to business enterprises, to any business of any nature.
(c) The generation of tax credits for jobs
created under an eligible Year One during taxable years beginning prior to
January 1, 2009 will not be affected by changes in these regulations. Such tax
credits will be based on law and regulation in effect at the time the Year One
jobs were created, as well as any additional jobs created in the subsequent
Years Two through Six which do not generate a new Year One.
(d) The amount of any tax credit will be
based on the status of the county/less developed census tract area in the year
in which qualifying new full-time employee jobs are created and not on the
status of the county/less developed census tract area in subsequent years when
qualifying jobs are being maintained.
(e) When a less developed census tract area
and a less developed county overlap, the following rules shall apply unless
otherwise changed by the commissioner of community affairs based on a petition
from a business enterprise:
1. If a business
enterprise locates in the area of overlap between a tier 1 county and a less
developed census tract area, rules governing the tax credit shall be based on
the portions of these regulations governing tier 1 counties;
2. If a business enterprise locates or
expands in the area of overlap between a tier 2 county, a tier 3 county or a
tier 4 county and a less developed census tract area, the business enterprise
may choose to claim the credit authorized by O.C.G.A. §
48-7-40 or the credit authorized
by O.C.G.A. §
48-7-40.1 each applicable tax
year, provided all requirements of the applicable O.C.G.A. § are met;
and
3. Under no circumstances shall
tax credits based on less developed counties and less developed census tract
areas be added.
(f) A
business enterprise claiming the tax credit under O.C.G.A. §
48-7-40, the county tier program,
and located within the jurisdiction of a joint authority established by two or
more contiguous counties will qualify for an additional $500 tax credit for
each new full-time employee job created. A business enterprise located within
the jurisdiction of a joint authority, however, must create the number of new
jobs required by the tier status of the county in which the business enterprise
is located before any tax credits will be allowed. The $500 job tax credit
authorized by this subparagraph shall be subject to all the conditions and
limitations specified under these regulations. The benefits of the job tax
credit authorized by the election provided for in this subparagraph shall be
subject to all the conditions and limitations specified under these
regulations. The Georgia Department of Community Affairs will not regulate the
creation or operation of joint development authorities nor will the department
define bona fide authorities for the purposes of the job tax credit
program.
(g) No taxpayer shall be
authorized to claim on a tax return for a given project the credit provided for
in these regulations if such taxpayer claims on such tax return any of the
credits authorized under 48-7-40.2, 48-7-40.3, or 48-7-40.4, unless otherwise
specifically allowed under these O.C.G.A. §.
(h) The census tract designation provisions
authorized under O.C.G.A. §
48-7-40.1(c)(1), (3) and
(4) shall be applicable to all requests for
designation filed on or after July 1, 2013.
Notes
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