TAX CREDIT CAN APPLY TO SALES OFFICES

FOREIGN COMPANIES SEEKING TO BUILD OR EXPAND MANUFACTURING FACILITIES  IN GEORGIA AND TO BENEFIT FROM INVESTMENT TAX CREDITS MAY SATISFY A REQUIREMENT THAT THEY HAVE PAID TAXES TO THE STATE FOR THREE PREVIOUS YEARS IF THEY CURRENTLY ARE ONLY MAINTAINING A SALES OFFICE.

THE INVESTMENT TAX CREDITS ARE PART OF GEORGIA’S BUSINESS EXPANSION SUPPORT ACT (BEST) ORIGINALLY ADOPTED BY THE GENERAL ASSEMBLY IN 1994 AND  AMENDED THIS YEAR.  ALSO INCLUDED IN THE LEGISLATION ARE CREDITS FOR CREATING JOBS AND RETRAINING EMPLOYEES, OR PROVIDING CHILD CARE, AMONG OTHERS.

“THE ATTITUDE (OF THE DEPARTMENT OF REVENUE) IS ‘LETS TRY TO MAKE THIS THING WORK’,” SAID JOHN GORNALL, AN ATTORNEY WITH THE ATLANTA LAW FIRM ARNALL GOLDEN & GREGORY AT A SEMINAR HELD IN THE FIRM’S OFFICES AT ONE ATLANTIC CENTER MAY 14.  THE INVESTMENT CREDITS ARE AVAILABLE IF THE “TAXPAYER” HAS OPERATED AN EXISTING MANUFACTURING FACILITY OR MANUFACTURING SUPPORT FACILITY, SUCH AS A SALES OFFICE, IN THE STATE FOR THE PREVIOUS THREE YEARS.

IN AN EFFORT TO ENCOURAGE INVESTMENT THROUGHOUT THE STATE, BEST DIVIDES GEORGIA’S 159 COUNTIES INTO THREE TIERS ACCORDING TO UNEMPLOYMENT, PER CAPITA INCOME, POVERTY LEVEL AND AVERAGE WEEKLY MANUFACTURING WAGES.

COMPANIES, WHETHER THEY ARE FOREIGN OR DOMESTIC, MAY APPLY FOR A VARIETY OF JOB OR INVESTMENT TAX CREDITS DEPENDING ON THE TIER OF THE COUNTY IN WHICH THE INVESTMENT WILL BE MADE.  THE CREDITS CAN APPLY TO BUSINESSES OR HEADQUARTERS OF ANY COMPANY ENGAGED IN MANUFACTURING, WAREHOUSING AND DISTRIBUTION, DATA PROCESSING, TOURISM AND RESEARCH AND DEVELOPMENT. EXCEPT IN VERY LIMITED CIRCUMSTANCES, THE CREDITS DO NOT APPLY TO RETAIL BUSINESSES.

FOR INSTANCE, COMPANIES WHICH CREATE FIVE OR MORE NEW JOBS IN A TIER ONE COUNTY, MAY RECEIVE UP TO A $3,000 CREDIT PER JOB AS OPPOSED TO THOSE IN THE 53 MOST DEVELOPED COUNTIES IN TIER THREE WHICH WILL RECEIVE A MAXIMUM OF A  $1,000 TAX CREDIT PER NEW JOB.  THE CREDITS ARE ALLOWED FOR EACH NEW FULL-TIME EMPLOYEE JOB FOR FIVE YEARS BEGINNING WITH YEARS TWO THROUGH SIX AFTER THE CREATION OF THE JOB.

THE INVESTMENT TAX CREDIT IS BASED ON THE SAME TIERS AS THE JOB TAX CREDIT PROGRAM.  COMPANIES EXPANDING IN TIER ONE COUNTIES MUST INVEST $50,000 TO RECEIVE A 5% CREDIT WHICH INCREASES TO 8% FOR RECYCLING, POLLUTION CONTROL AND DEFENSE CONVERSION ACTIVITIES, WHILE COMPANIES EXPANDING INTO TIER THREE COUNTIES WILL RECEIVE A 1% CREDIT FOR A $50,000 INVESTMENT, WHICH INCREASES TO 3% FOR RECYCLING, POLLUTION CONTROL AND DEFENSE CONVERSION ACTIVITIES.

MR. GORNALL SAID THAT COMPANIES WOULD HAVE TO BE PARTICULARLY CAREFUL IN THEIR RECORD KEEPING SINCE  THE STATE WILL BE DILIGENT IN ASSURING THAT QUALIFIED COMPANIES ARE ONLY GRANTED EITHER JOB OR INVESTMENT TAX CREDITS.  COMPANIES ARE NOT GENERALLY ABLE TO APPLY FOR BOTH KINDS OF CREDITS.

FOR MORE INFORMATION, CALL MR. GORNALL OR STUART JOHNSON AT (404) 873-8500; FAX, (404) 873-8501.