Ga. Comp. R. & Regs. R. 560-7-8-.62 - Rural Zone Tax Credits
(1)
Purpose. This regulation provides guidance concerning the
implementation and administration of the tax credits under O.C.G.A. §
48-7-40.32.
(2)
Coordination of Agencies.
Under O.C.G.A. §
48-7-40.32, the Department of
Community Affairs and the Department of Economic Development are the state
agencies responsible for designating zones for the tax credits and the
Department of Community Affairs is the state agency responsible for certifying
taxpayers for the tax credits.
(3)
Definitions. The terms "certified entity", "certified investor",
"eligible business", "full-time equivalent", "local government", "maintained
job", "qualified rehabilitation expenditure", "rural zone", "year one", and
"years one through five" as used in this regulation are defined in the
Department of Community Affairs Regulation
110-34-1-.02.
(4)
Rural Zone Jobs Tax Credit.
A certified entity that creates at least two new full-time equivalent jobs in a
rural zone shall be allowed a tax credit in the amount of $2,000 for each new
full-time equivalent job in year one. Such certified entity shall receive rural
zone jobs tax credit in years two through five for each new full-time
equivalent job created in year one, provided the new full-time equivalent jobs
are maintained in each year, and provided the certified entity maintains at
least two new full-time equivalent jobs.
(a)
Additional New Full-Time Equivalent Jobs Created in Years Two Through Five. For
each additional new full-time equivalent job created in years two through five,
a certified entity shall receive rural zone jobs tax credit, provided the new
full-time equivalent jobs are maintained. Additional new full-time equivalent
jobs means those new full-time equivalent jobs created in years two through
five that increase the monthly full-time employment average for that year above
the monthly full-time employment average for year one. The average full-time
monthly employment for a year will be determined by the procedure in Department
of Community Affairs Regulation
110-34-1-.06.
(i) The credits for additional new full-time
equivalent jobs may only be taken if the certified entity already qualifies for
the rural zone jobs tax credit in year one.
(b) Subsequent Year One. The certified entity
may begin a subsequent year one and years two through five as provided in
Department of Community Affairs Regulation
110-34-1-.06.
(c) Per Certified Entity Credit Limitation.
The credit amount allowed under paragraph(4) of this regulation shall be
further limited for each certified entity and shall not exceed $40,000.00 per
taxable year.
(d) Number of
Full-Time Equivalent Jobs. The number of new full-time equivalent jobs shall be
determined by comparing the monthly average of full-time equivalent jobs
subject to Georgia income tax withholding for a given taxable year with the
corresponding period of the prior taxable year; provided a certified entity
that begins operations during the taxable year may be certified by the
Department of Community Affairs to base initial eligibility on a period of less
than 12 months.
(e) Computation of
Rural Zone Jobs Tax Credit Based on Twelve Month Periods Only. Except as
provided in subparagraph (4)(d) of this regulation, a certified entity must
compute increases and decreases in full-time equivalent jobs on the basis of
twelve month periods only, even when the certified entity has taxable years
that are not equal to twelve months. This may cause the rural zone jobs tax
credit calculation period to be different from the tax year of the certified
entity.
(5)
Rural
Zone Property Tax Credit. A certified investor that acquires and
develops property in a rural zone shall be allowed a tax credit if an eligible
business that claims the tax credit under paragraph (4) of this regulation is
located in the investment property; or if an eligible business is located in
the investment property and that eligible business maintains a minimum of two
full-time equivalent jobs for each year the rural zone property tax credit is
claimed.
(a) Credit Amount. The credit amount
for the rural zone property tax credit is 25 percent of the purchase price and
shall not exceed $125,000; provided that the entire credit shall not be taken
in the year in which the property is placed in commercial service but shall,
for taxable years ending on or before December 31, 2024, be prorated equally in
five installments over five taxable years, beginning with the taxable year in
which the property is placed in service. For taxable years beginning on or
after January 1, 2025, the entire credit shall not be taken in the year in
which the property is placed in commercial service but shall be prorated
equally in three installments over three taxable years, beginning with the
taxable year in which the property is placed in service.
(b) Certified Investor May Preserve the Rural
Zone Property Tax Credit. A certified investor shall be allowed to claim the
rural zone property tax credit for up to seven years from the date of initial
eligibility in the event the commercial requirement under paragraph (5) of this
regulation is not satisfied in consecutive years.
(6)
Rural Zone Qualified Rehabilitation
Expenditures Tax Credit. A certified entity or certified investor that
meets the minimum historic preservation standards provided by the Department of
Community Affairs, that has qualified rehabilitation expenditures, shall
receive the rural zone qualified rehabilitation expenditures tax credit for
three years beginning with the year the property is placed in service. The
certified entity or certified investor shall maintain a minimum of two
full-time equivalent jobs for each year the tax credit is claimed; or with
respect to a certified investor, if an eligible business is located in the
investment property, such eligible business must maintain a minimum of two
full-time equivalent jobs for each year the tax credit is claimed.
(a) Credit Amount. The credit amount for the
rural zone qualified expenditures tax credit is 30 percent of the qualified
rehabilitation expenditures and shall not exceed $150,000 per project; provided
that the entire credit shall not be taken in the year in which the property is
placed in service but shall be prorated equally in three installments over
three taxable years, beginning with the taxable year in which the property is
placed in service.
(7)
Claiming the Rural Zone Tax Credit(s). For a certified entity or
certified investor to claim the rural zone jobs tax credit, rural zone property
tax credit or the rural zone qualified rehabilitation expenditures tax credit,
the certified entity or certified investor must submit Form IT-RZ and their
Department of Community Affairs certification(s), and any other information
that the Commissioner may request, with the certified entity's or certified
investor's Georgia income tax return each year the credit is claimed.
(8)
Carryforward. In no event
shall the rural zone tax credit for a taxable year exceed the certified
entity's or certified investor's income tax liability. Any unused credit in a
taxable year may be carried forward for the number of years authorized under
O.C.G.A. §
48-7-40.32 from the close of the
taxable year in which the credit was claimed.
(9)
Pass-Through Entities. When
the certified entity or certified investor is a pass-through entity, and has no
income tax liability of its own, the tax credit will pass to its individual
members, shareholders, or partners based on their year ending profit/loss
percentage. The credit forms will initially be filed with the tax return of the
pass-through entity to establish the amount of the credit available for pass
through. The credit will then pass through to its individual shareholders,
members, or partners to be applied against the tax liability on their income
tax returns. The credits are available for use as a credit by the individual
shareholders, members, or partners for their tax year in which the income tax
year of the pass-through entity ends. For example: A partnership earns the
credit for its tax year ending January 31, 2019. The partnership passes the
credit to a calendar year partner. The credit is available for use by the
individual partner beginning with the calendar 2019 tax year.
(10)
Coordination with Other Tax
Credits. A certified entity or certified investor that claims the rural
zone tax credit for a project shall not be allowed to use the same qualified
rehabilitation expenditures to generate and claim any additional state income
tax credits, including, but not limited to, the historic rehabilitation tax
credit. Jobs created by, arising from, or connected in any way with a project
claimed under the rural zone jobs tax credit are not eligible to be used toward
other job related tax credits.
(11)
Sunset Date. O.C.G.A. §
48-7-40.32, the rural zone tax
credits, shall be repealed on December 31, 2032.
(12)
Effective Date. This
regulation shall be applicable to taxable years beginning on or after January
1, 2024. Taxable years beginning before January 1, 2024 will be governed by the
regulations of Chapter 560-7 as they existed before January 1, 2024 in the same
manner as if the amendments thereto set forth in this regulation had not been
promulgated.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
(1) Purpose. This regulation provides guidance concerning the implementation and administration of the tax credits under O.C.G.A. § 48-7-40.32.
(2) Coordination of Agencies. Under O.C.G.A. § 48-7-40.32, the Department of Community Affairs and the Department of Economic Development are the state agencies responsible for designating zones for the tax credits and the Department of Community Affairs is the state agency responsible for certifying taxpayers for the tax credits.
(3) Definitions. The terms "certified entity","certified investor", "eligible business","full-time equivalent","local government","maintained job","qualified rehabilitation expenditure","rural zone","year one ", and "years one through five" as used in this regulation are defined in the Department of Community Affairs Regulation 110-34-1-.02.
(4) Rural Zone Jobs Tax Credit. A certified entity that creates at least two new full-time equivalent jobs in a rural zone shall be allowed a tax credit in the amount of $2,000 for each new full-time equivalent job in year one . Such certified entity shall receive rural zone jobs tax credit in years two through five for each new full-time equivalent job created in year one , provided the new full-time equivalent jobs are maintained in each year, and provided the certified entity maintains at least two new full-time equivalent jobs.
(a) Additional New Full-Time Equivalent Jobs Created in Years Two Through Five . For each additional new full-time equivalent job created in years two through five , a certified entity shall receive rural zone jobs tax credit, provided the new full-time equivalent jobs are maintained. Additional new full-time equivalent jobs means those new full-time equivalent jobs created in years two through five that increase the monthly full-time employment average for that year above the monthly full-time employment average for year one . The average full-time monthly employment for a year will be determined by the procedure in Department of Community Affairs Regulation 110-34-1-.06.
(i) The credits for additional new full-time equivalent jobs may only be taken if the certified entity already qualifies for the rural zone jobs tax credit in year one .
(b) Subsequent Year One . The certified entity may begin a subsequent year one and years two through five as provided in Department of Community Affairs Regulation 110-34-1-.06.
(c) Per Certified Entity Credit Limitation . The credit amount allowed under paragraph(4) of this regulation shall be further limited for each certified entity and shall not exceed $40,000.00 per taxable year.
(d) Number of Full-Time Equivalent Jobs. The number of new full-time equivalent jobs shall be determined by comparing the monthly average of full-time equivalent jobs subject to Georgia income tax withholding for a given taxable year with the corresponding period of the prior taxable year; provided a certified entity that begins operations during the taxable year may be certified by the Department of Community Affairs to base initial eligibility on a period of less than 12 months.
(e) Computation of Rural Zone Jobs Tax Credit Based on Twelve Month Periods Only. Except as provided in subparagraph (4)(d) of this regulation, a certified entity must compute increases and decreases in full-time equivalent jobs on the basis of twelve month periods only, even when the certified entity has taxable years that are not equal to twelve months. This may cause the rural zone jobs tax credit calculation period to be different from the tax year of the certified entity.
(5) Rural Zone Property Tax Credit. A certified investor that acquires and develops property in a rural zone shall be allowed a tax credit if an eligible business that claims the tax credit under paragraph (4) of this regulation is located in the investment property; or if an eligible business is located in the investment property and that eligible business maintains a minimum of two full-time equivalent jobs for each year the rural zone property tax credit is claimed.
(a) Credit Amount. The credit amount for the rural zone property tax credit is 25 percent of the purchase price and shall not exceed $125,000; provided that the entire credit shall not be taken in the year in which the property is placed in commercial service but shall be prorated equally in five installments over five taxable years, beginning with the taxable year in which the property is placed in service.
(b) Certified Investor May Preserve the Rural Zone Property Tax Credit. A certified investor shall be allowed to claim the rural zone property tax credit for up to seven years from the date of initial eligibility in the event the commercial requirement under paragraph (5) of this regulation is not satisfied in consecutive years.
(6) Rural Zone Qualified Rehabilitation Expenditures Tax Credit. A certified entity or certified investor that meets the minimum historic preservation standards provided by the Department of Community Affairs, that has qualified rehabilitation expenditures, shall receive the rural zone qualified rehabilitation expenditures tax credit for three years beginning with the year the property is placed in service. The certified entity or certified investor shall maintain a minimum of two full-time equivalent jobs for each year the tax credit is claimed; or with respect to a certified investor, if an eligible business is located in the investment property, such eligible business must maintain a minimum of two full-time equivalent jobs for each year the tax credit is claimed.
(a) Credit Amount. The credit amount for the rural zone qualified expenditures tax credit is 30 percent of the qualified rehabilitation expenditures and shall not exceed $150,000 per project ; provided that the entire credit shall not be taken in the year in which the property is placed in service but shall be prorated equally in three installments over three taxable years, beginning with the taxable year in which the property is placed in service.
(7) Claiming the Rural Zone Tax Credit(s). For a certified entity or certified investor to claim the rural zone jobs tax credit, rural zone property tax credit or the rural zone qualified rehabilitation expenditures tax credit, the certified entity or certified investor must submit Form IT-RZ and their Department of Community Affairs certification (s), and any other information that the Commissioner may request, with the certified entity's or certified investor's Georgia income tax return each year the credit is claimed.
(8) Carry Forward . In no event shall the rural zone tax credit for a taxable year exceed the certified entity's or certified investor's income tax liability. Any unused credit in a taxable year may be carried forward for ten years from the close of the taxable year in which the credit was claimed.
(9) Pass-Through Entities . When the certified entity or certified investor is a pass-through entity, and has no income tax liability of its own, the tax credit will pass to its individual members, shareholders, or partners based on their year ending profit/loss percentage. The credit forms will initially be filed with the tax return of the pass-through entity to establish the amount of the credit available for pass through. The credit will then pass through to its individual shareholders, members, or partners to be applied against the tax liability on their income tax returns. The credits are available for use as a credit by the individual shareholders, members, or partners for their tax year in which the income tax year of the pass-through entity ends. For example: A partnership earns the credit for its tax year ending January 31, 2019. The partnership passes the credit to a calendar year partner. The credit is available for use by the individual partner beginning with the calendar 2019 tax year.
(10) Coordination with Other Tax Credits. A certified entity or certified investor that claims the rural zone tax credit for a project shall not be allowed to use the same qualified rehabilitation expenditures to generate and claim any additional state income tax credits, including, but not limited to, the historic rehabilitation tax credit. Jobs created by, arising from, or connected in any way with a project claimed under the rural zone jobs tax credit are not eligible to be used toward other job related tax credits.
(11) Sunset Date. O.C.G.A. § 48-7-40.32, the rural zone tax credits, shall be repealed on December 31, 2027.
(12) Effective Date . This regulation shall be applicable to taxable years beginning on or after January 1, 2018.