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A net operating loss sustained for the current taxable year

original cost. Property rented is valued at eight times the net annu-

must be carried back and forward in the procedural

al rental rate. The net annual rental rate is the annual rental rate

sequence of taxable periods provided by Section 172 of the

paid less any annual rental rate received from any subrentals.

Internal Revenue Code of 1986, as it existed on January 1,

Averaging with respect to rented property is achieved automati-

1999, and as adopted by Section 48-7-21 of the income tax

cally by the method of determining the net annual rental rate of

laws of Georgia.

such property.

Georgia Taxes Deductible. There shall be added to taxable

(b) Payroll Factor. The payroll factor is the ratio of all salaries,

income any taxes on, or measured by, net income or net profits

wages, commissions, and other compensation paid by the tax-

paid or accrued within the taxable year imposed by the authority

payer in this State for personal services performed by employees

of the United States or any foreign country, or by any state except

in connection with the trade or business of the taxpayer during the

the State of Georgia, or by any territory, county, school district,

taxable year to the total salaries, wages, commissions, and other

municipality, or other tax subdivision of any state, territory, or for-

compensation paid by the taxpayer for personal services per-

eign country to the extent such taxes are deducted in determining

formed by employees in connection with its entire trade or busi-

federal taxable income. This includes federal environmental tax.

ness, wherever conducted, during the taxable year. Payments

made to an independent contractor or any other person not prop-

Where salaries and wages are reduced on the federal return in

erly classified as an employee are excluded. Compensation is paid

computing federal taxable income because of a Federal jobs tax

in this State if the employee’s service outside Georgia is inciden-

credit the eliminated salary and wage deduction should be listed

tal to the service performed in this State or some of the service is

in Schedule 5 as a subtraction from Federal taxable income.

performed in Georgia and the base of operations from which the

ALLOCATION AND APPORTIONMENT OF INCOME

service is directed is in this State, or some of the service is per-

If any corporation, domestic or foreign, is doing business both

formed in Georgia and the base of operations from which the ser-

within and without Georgia, Schedules 6 and 7 should be used to

vice is directed is not in any State where some part of the service

compute Georgia taxable income.

is performed but the employee’s residence is in Georgia.

The tax imposed by this law applies to the entire net income as

herein defined, received by every corporation, foreign or domestic,

of gross receipts from business done within this State to total

owning property or doing business in this State. Every such cor-

gross receipts from business done everywhere. Receipts shall be

poration shall be deemed to be doing business in this State if it

deemed to have been derived from business done within this State

engaged within this State in any activities or transactions for the

only if received from products shipped to customers in this State,

purpose of financial profit or gain; whether or not such corporation

or delivered within this State to customers.

is registered to do business in this State; whether or not it main-

The purpose of the gross receipts factor is to measure the mar-

tains an office or place of doing business within this State; whether

ketplace for the taxpayer’s goods and services.

or not any such activity or transaction is connected with interstate

When receipts are derived from the sale of tangible personal

or foreign commerce. If the business income of the corporation is

property, receipts shall be deemed to have been derived from

derived from property owned or business done within the State,

business done in this state if they were received from products

and in part from property owned or business done without the

shipped to customers in this state or products delivered within this

State, the tax shall be imposed only on that portion of the business

state to customers.

income which is reasonably attributable to the property owned

and business done within the State, to be determined as follows:

When receipts are derived from business other than the sale of

tangible personal property, receipts shall be deemed to have been

(1) Interest received on bonds held for investment and income

derived from business done in this state if they were received from

received from other intangible property held for investment are not

customers within this state or if the receipts are otherwise attrib-

subject to apportionment. Rentals received from real estate held

utable to this state’s marketplace.

purely for investment purposes and not used in the operation of

the business are also not subject to apportionment. All expenses

(d) The apportionment factors determined above shall be

connected with the interest and rentals realized from such invest-

weighted 25% to property, 25% to payroll and 50% to

ments are likewise not subject to apportionment but must be

receipts. If the denominator for either the property or payroll

applied against the investment income. The net investment

factor is zero, the weighted percentage for the other will be

income from intangible property shall be allocated to Georgia if the

33-1/3% and the weighted percentage for the receipts fac-

situs of the corporation is in Georgia or the intangible property was

tor will be 66-2/3%. If the denominator for the receipts is

acquired as income from property held in Georgia, or as a result of

zero, the weighted percentage for the property and payroll

business done in Georgia. The net investment income from tangi-

will change to 50% each. If the denominators for any two

ble property in Georgia shall be allocated to Georgia.

factors are zero, the weighted percentage for the remaining

(2) Gains from the sale of tangible or intangible property not

factor will be 100%.

held, owned or used in connection with the trade or business of

(e) Apportionment of Income; Business Joint Venture and

the corporation nor for sale in the regular course of business shall

Business Partnerships. A corporation which is involved in a busi-

be allocated to the State if the property held is real or tangible per-

ness joint venture, or is a general partner in a business partner-

sonal property situated in the State, or intangible property having

ship, must include its pro rata share of the joint venture or part-

an actual situs or a business situs within the State. Otherwise,

nership, property, payroll and gross receipts values in its own

such gains shall be allocated outside the State.

apportionment formula.

(3) Net income of the above classes having been separately allo-

AMENDED RETURNS

cated and deducted, the remainder of the net business income

Georgia has no special form for the filing of an amended return.

shall be apportioned by application of the following:

Please check the amended return block on Form 600. Copy of

THREE FACTOR FORMULA

Federal form 1120X or federal audit adjustments must be attached.

(a) Property Factor. The property factor is composed of the aver-

The amended return should be mailed to Georgia Income Tax

age value of real and tangible personal property owned or rented

Division, P.O. Box 740397, Atlanta, Georgia 30374-0397.

and used during the taxable year. Property owned is valued at its

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Form It-611 - Georgia Income Tax Forms And General Instructions - Georgia Department Of Revenue - 1999 Page 3

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