05.27.15 |
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Is Georgia’s Investment Tax Credit Right for You?

GA stampIt is in the interest of a state government to help its businesses grow. When a company expands, it can create additional employment opportunities, attract more business and contribute to a boost in the state’s overall economy.

Investment tax credits are tools that a state or municipal government can use to incentivize economic progress by helping the growth of businesses in areas of specific need.

The Georgia Investment Tax Credit is one such credit. It is designed to help businesses afford expansion and improvement, particularly in facilities, equipment and pollution control.

Who is Eligible for the Georgia Investment Tax Credit?

The Georgia Investment Tax Credit is available for companies in manufacturing and telecommunications support.

The state of Georgia defines a manufacturing facility as “a single facility, including contiguous parcels of land, improvements to such land, buildings, building improvements, and any machinery or equipment used in manufacturing described by NAICS Sectors 31- 33.”

A telecommunications facility is defined as “a single facility, including contiguous parcels of land, improvements to such land, buildings, building improvements, and any machinery or equipment used in providing the telecommunications services described by NAICS Codes 517210, 517110, 517911, 517410, and 517919.”

In order for a company to be eligible, the company must have been operating in the state of Georgia for a minimum of three years and have properly filed its state tax returns.

Separate from the Investment Credit, Georgia companies can look to qualify for the Georgia Jobs Credit. Companies cannot qualify for both the Georgia Jobs Credit and the Georgia Investment Tax Credit, however, so they will want to gauge which credit would provide the greatest benefit.

How Much is the Tax Credit?

Companies eligible for the Georgia Investment Tax Credit can earn from 1 to 8 percent of qualified capital investments of $50,000 or more.

The amount that a company can receive is determined by two criteria:

  • Geographic location – Companies can qualify for larger amounts if located in one of Georgia’s less prosperous counties.
  • Type of investment – A set 3 percent credit is reserved for companies investing in recycling equipment, pollution control or conversion of a defense plant manufacturing facility to a new product; 1 to 5 percent is reserved for investments in general equipment to be used for manufacturing or telecommunications services.

Companies can make use of the investment credit to offset up to 50 percent of their Georgia state income tax liability.

How to Get Started

A company must submit an application for the Georgia Investment Tax Credit when eligibility has been confirmed and its investment project has been defined.

The application must be submitted within 30 days of completion of the project and must include a detailed description of the parameters of the investment project, including type, quantity and cost of the investment(s) to be made.

See Georgia Regulation 560-7-8-.37 for additional details, and learn more about how ADP® can help businesses identify and capture tax credits and incentives for which they may be eligible.

 

Learn More About ADP SmartCompliance® Tax Credits

 

The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available.

 

Sources

http://rules.sos.state.ga.us/docs/560/7/8/37.pdf

http://www.georgia.org/competitive-advantages/tax-credits/job-credit/

http://www.georgia.org/competitive-advantages/tax-credits/investment/

http://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/TSD_Investment_Tax_Credit_Form_ITIC_2001.pdf

 

 


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