Ga. Comp. R. & Regs. R. 560-7-8-.14 - Headquarters Job Tax Credit
(1)
Program Description. The
headquarters job tax credit program authorized by Section
48-7-40.17 provides a credit for
taxes for a taxpayer establishing its headquarters in this state or relocating
its headquarters into this state.
(2)
Definitions.
(a)
Average Wage. The term
"average wage" means the average wage of the county in which a full-time job is
located as reported in the most recent annual issue of the Georgia Employment
and Wages Averages Report of the Department of Labor that is available as of
the last day of the tax year in which the jobs were created. For purposes of
this definition, wages means the total dollars paid during the year to an
employee, including but not limited to bonuses, incentive pay, and deductions
from gross pay. Wages does not mean contributions made by employers on behalf
of employees to health insurance, retirement, or other benefit
programs.
(b)
Full-time Job.
The term "full-time job" means employment for an individual in a
permanent, full-time position located in this state which:
1. Is located at a headquarters and is
engaged in performing headquarters related functions and services as a
headquarters staff employee;
2. Has
a regular workweek of 30 hours or more;
3. Pays at or above:
(i) In tier 1 counties, the average wage of
the county in which it is located;
(ii) In tier 2 counties, 105 percent of the
average wage of the county in which it is located;
(iii) In tier 3 counties, 110 percent of the
average wage of the county in which it is located; and
(iv) In tier 4 counties, 115 percent of the
average wage of the county in which it is located; and
4. Has no predetermined end date.
(c)
Headquarters. The
term "headquarters" means the principal central administrative office of a
taxpayer, where headquarters staff employees are located and employed, and
where the primary headquarters related functions and services are
performed.
(d)
Tier.
The term "tier" means a tier as designated pursuant to Code Section
48-7-40, as amended.
(e)
Headquarters Related Functions and
Services. The term "headquarters related functions and services" means
those functions involving financial, personnel, administrative, legal,
planning, or similar business functions performed by headquarters staff
employees.
(f)
Headquarters
Staff Employees. The term "headquarters staff employee" means executive,
administrative, or professional workers performing headquarters related
functions and services.
1. An executive
employee is a full-time job employee who is primarily engaged in the management
of all or part of the enterprise.
2. An administrative employee is a full-time
job employee who is not primarily involved in manual work and whose work is
directly related to management policies or general headquarters
operations.
3. A professional
employee is an employee whose primary duty is work requiring knowledge of an
advanced type in a field of science or learning. This knowledge is
characterized by a prolonged course of specialized study.
(g)
New Full-Time Jobs. The term
"new full-time jobs" refers to full-time jobs that are new to the state of
Georgia. Jobs that are transferred from other Georgia locations of the taxpayer
or from other Georgia locations of an affiliate of the taxpayer would not be
jobs that are new to the state of Georgia. However, an employee in a new
full-time job may be employed at a temporary location in this state pending
completion of construction or renovation work at the headquarters.
(3)
Establishing Eligibility
for the Credit.
(a) A taxpayer must
either establish its headquarters in this state, or it must relocate its
headquarters into this state. Such establishment or relocation must occur on or
after January 1, 2001.
(b) The
first date on which the taxpayer withholds wages for employees at such
headquarters (pursuant to the provisions of Code Section
48-7-101) is a critical date with
respect to the following eligibility requirements:
1. Prior to one year from such date the
taxpayer must incur within the state a minimum of $1 million in construction,
renovation, leasing, or other costs related to such establishment or
relocation; and
2. Within one year
of such date the taxpayer must employ at least 50 persons in new full-time jobs
at such headquarters, as provided in paragraph (3)(c).
(c) Once the taxpayer has employed at least
50 persons in new full-time jobs at its headquarters, the average number of new
full-time jobs at such headquarters must be at least 50 for a taxable
year.
(d) New full-time jobs at
such headquarters are determined for a taxable year by computing the average
number of new full-time jobs subject to Georgia income tax withholding for the
taxable year. This average shall be determined by the following method:
1. For each month of the taxable year, count
the total number of new full-time jobs 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 new full-time jobs; and
3. Divide the results by the number of months
in the taxable year.
(e)
The taxpayer must elect not to receive the tax credits provided for by Code
Sections 48-7-40,
48-7-40.1,
48-7-40.2,
48-7-40.3,
48-7-40.4,
48-7-40.7,
48-7-40.8, and
48-7-40.9 for such jobs or for
such project. This election is deemed to have been made when the taxpayer
claims the headquarters job tax credit on its state income tax return. Under
this election, taxpayers may not claim or carry forward the headquarters job
tax credit for any given project for which a job tax credit is claimed under
O.C.G.A. Sections
48-7-40 or
48-7-40.1, an investment tax
credit is claimed under O.C.G.A. Sections
48-7-40.2,
48-7-40.3 or
48-7-40.4, or an optional
investment tax credit is claimed under O.C.G.A. Sections
48-7-40.7,
48-7-40.8 or
48-7-40.9. Neither may taxpayers
alternately elect to claim the job tax credit, the investment tax credit, or
the optional investment tax credit in one year, and the headquarters job tax
credit in the next year for a given project. These credits are not
interchangeable. Taxpayers may elect to take only one of the tax credits for a
given project.
(4)
Calculation of Credit. A taxpayer that has established eligibility
for the headquarters job tax credit shall be allowed a credit for taxes imposed
under this article as follows:
(a) An amount
equal to $2,500.00 annually per new full-time job; or
(b) An amount equal to $5,000.00 annually per
new full-time job if the average wage of the new full-time jobs created is 200
percent or more of the average wage of the county in which such jobs are
located.
(5)
Claiming the Credit.
(a) The
headquarters job tax credit may be taken on an income tax return for the first
taxable year in which the taxpayer first becomes eligible for such credit. The
credit may also be claimed for each of the four immediately succeeding taxable
years, provided the number of new full-time jobs as required in (3)(c) of this
regulation and as calculated in (3)(d) of this regulation are maintained in
each year. Thereafter, the taxpayer shall be ineligible to claim the
headquarters job tax credit on an income tax return, except to the extent that
the taxpayer qualifies for a carry forward of the credit in accordance with
paragraph (d) below.
(b) The credit
may be used to offset 100 percent of the taxpayer's Georgia state income tax
liability in the taxable year.
(c)
Where the amount of such credit exceeds the taxpayer's income tax liability in
a taxable year, the excess may be taken as a credit against such taxpayer's
quarterly or monthly withholding tax payment under Code Section
48-7-103. The amounts claimed
under this paragraph may not exceed in any one taxable year $2,500.00 annually
per new full-time job, or $5,000.00 if the average wage of the new full-time
jobs created is 200 percent or more of the average wage of the county in which
such jobs are located.
(d) Any
credit claimed under this code section but not used in any taxable year may be
carried forward for ten years from the close of the taxable year in which the
qualified jobs were established as eligible new full-time jobs for purposes of
computing the credit.
(6)
Documentation. At the time
the credit is claimed on an income tax return, the taxpayer shall submit to the
commissioner a listing of headquarters staff employees in new full-time jobs.
Such listing shall include the name of the employee, social security number,
wages, amount of credit claimed for such employee (whether $2,500.00 or
$5,000.00), and any other information that the commissioner may
request.
(7)
Notification and
Process to Claim and Receive Withholding Tax Credit.
(a)
Notification of Intention to Claim
Withholding Tax Credit. A taxpayer establishing its headquarters in this
state or relocating its headquarters into this state must notify the
commissioner each year of its election to take all or part of the credit
against the quarterly or monthly withholding tax payment for such taxpayer.
This notification must be made at least thirty (30) days prior to the date on
which the income tax return for the taxpayer is filed with the department.
Taxpayers should use Form IT-JOBW for this purpose.
(b)
Process for Receiving Withholding
Tax Credit Benefits. Within ninety (90) days of the date the income tax
return is filed in accordance with instructions provided by the department, the
commissioner will confirm to the taxpayer the approved amount of headquarters
job tax credit and the date when the taxpayer may begin retaining withholding
tax payments otherwise due to the department.
(8)
Pass-Through of Credit.
(a)
"S" Corporations. Taxpayers
that are "S" corporations will apply the headquarters job tax credit to
corporate income tax liability at the entity level if one exists. Any remaining
credit will then be apportioned to shareholders based on their percentage share
of ownership of the corporation in the same manner as other pass-through items.
Taxpayers that are "S" corporations that otherwise qualify to take all or a
part of the headquarters job tax credit against withholding tax otherwise due
the department must make an irrevocable election to do so as a part of their
notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to shareholders.
(b)
Partnership. Where the taxpayer is a partnership, the headquarters
job tax credit will be apportioned to partners according to the partnership
agreement for sharing income or loss, or if there is no partnership agreement
for sharing income or loss, according to the partner's interest in the
partnership. Taxpayers that are partnerships that otherwise qualify to take all
or a part of the headquarters job tax credit against withholding tax otherwise
due the department must make an irrevocable election to do so as a part of
their notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to partners.
(c)
Limited Liability Companies. Taxpayers that are limited liability
companies will apportion the headquarters job tax credit to members based on
their percentage ownership of the limited liability company. Taxpayers that are
limited liability companies that otherwise qualify to take all or a part of the
headquarters job tax credit against withholding tax otherwise due the
department must make an irrevocable election to do so as a part of their
notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to members.
Notes
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