Georgia Form 700 - Partnership Tax Return - 2006 (Page 2 of 12) in pdf

GENERAL INFORMATION

partner in a partnership, a shareholder in an S Corporation,

FEDERAL TAX CHANGES

or a member of a limited liability company that is either taxed

Job Creation and Worker Assistance Act of 2002, Jobs

as a partnership or that is disregarded for tax purposes,

and Growth Tax Relief Reconciliation Act of 2003,

where the partnership or LLC has been taxed at the entity

Working Families Tax Relief Act of 2004, American Jobs

level by another state or S Corporation status is not

Creation Act of 2004, The Gulf Opportunity Zone Act of

recognized by the other state. Adjustments shall be allowed

2005 and Katrina Emergency Relief Act of 2005. Georgia

only for that portion of the income on which the tax was

has adopted the provisions of these acts (as they relate to

actually paid by the S Corporation, partnership, or limited

the computation of Federal taxable income) for taxable years

liability company. The Governor signed this bill on April 28,

beginning on or after January 1, 2006, except for I.R.C. 168(k)

2006, it became effective on that date, and is applicable to

(the 30% and 50% bonus depreciation rules). This exception

all taxable years beginning on or after January 1, 2006.

does not apply to I.R.C. 168(k)(2)(A)(i), (the definition of

qualified property), I.R.C. 168(k)(2)(D)(i), (exceptions to the

Extensions. An amendment to O.C.G.A. § 48-2-36 allows

definition of qualified property) and 168(k)(2)(E),(special rules

the Commissioner to provide extensions for filing returns and

for qualified property). Georgia has also not adopted I.R.C.

making tax payments in a manner similar to the IRS in the

Section 199 (deduction for income attributable to domestic

event of a presidentially declared disaster, terrorist, or military

production activities, I.R.C. Section 1400L (New York Liberty

action. The Governor signed this bill on April 19, 2006, and

Zone Benefits), I.R.C. Section 1400N(d)(1) (post 8/28/2006

it became effective on that date with the exception that the

Gulf Opportunity Zone (GOZ) property, I.R.C. Section

amendment to O.C.G.A. § 48-1-2 shall apply to all taxable

1400N(j) (GOZ public utility casualty losses), and I.R.C.

years beginning on or after January 1, 2006.

Section 1400N(k) (NOLs attributable to GOZ losses). For

Beginning with taxable year 2006, Georgia will accept an

tax years beginning on or after January 1, 2005, Georgia has

approved six-month Federal extension. It will not be necessary

now adopted the increased I.R.C. Section 179 deduction

to request a separate Georgia extension. If you do not need

($105,000 in 2005) and the related phase out ($420,000 in

a Federal extension, use Form IT 303 to request a Georgia

2005) that was enacted as part of the Jobs and Growth Tax

extension if necessary.

Relief Reconciliation Act of 2003.

Confidentiality. An amendment to O.C.G.A. § 48-2-15 was

Federal deduction for income attributable to domestic

made to ensure that tax information obtained by third parties

production activities (IRC Section 199). This should be

contracting with the Department of Revenue will fall under

entered on Form 700 Page 2, Schedule 4, Line 4.

confidentiality requirements. This is necessary to allow

electronically filed sales and use tax returns to be processed

Depreciation Differences. Depreciation differences due to

in a manner similar to that allowed for withholding tax returns

the Federal acts mentioned above should be handled as

as already provided in Chapter 7.

follows. If the taxpayer has depreciation differences from

more than one Federal act, it is not necessary to make a

Visit for additional

separate adjustment for each act.

2006 legislation.

A. Depreciation must be computed one way for Federal

2006 LEGISLATION EFFECTIVE IN 2007

purposes and another way for Georgia purposes. To compute

Definition of the terms “authorized employee” and “labor

depreciation for Federal purposes, taxpayers should use the

services”. Senate Bill 529 amends O.C.G.A. § 48-7-21.1 to

2006 IRS Form 4562 and attach it to the Georgia return.

create a new Code Section to define the terms “authorized

This amount should be entered on Page 2, Schedule 4, Line

employee” and “labor services.” It also provides that on or

6 along with the words “2002 JCWA/2003 JGTRRA

before January 1, 2008, no wages or remuneration for labor

Depreciation Adjustment”.

services to an individual of $600.00 or more per annum may

B. Depreciation must also be computed for Georgia

be claimed and allowed as a deductible business expense

purposes. Taxpayers should use Georgia Form 4562 to

for state income purposes by a taxpayer unless such individual

compute depreciation for Georgia purposes and attach it to

is an authorized employee. The Governor signed this bill on

the Georgia return. This amount should be entered on Page

April 17, 2006, and it will become effective on July 1, 2007.

3, Schedule 5, Line 3 along with the words “2002 JCWA/

FREQUENTLY ASKED QUESTIONS

2003 JGTRRA Depreciation Adjustment”. Georgia Form 4562

Answers to frequently asked questions regarding corporations,

and related instructions can be obtained from our website at

S Corporations, partnerships, LLC’s, and nonresident

or from any Revenue Office.

withholding are available on our website at .

Additionally, any depreciation differences will affect the

FILING REQUIREMENTS

calculation of gain when the property is sold.

A partnership, limited liability company, syndicate, group, pool,

2006 LEGISLATION

joint venture and unincorporated organization which is

Adjustment to the distributive share of the Federal

engaged in business or derives income from property located

adjusted gross income. An amendment to O.C.G.A. § 48-

in Georgia or has members domiciled in Georgia, and which

7-27 provides for an adjustment to the distributive share of

is required to file a Federal Income Tax return on Form 1065,

the Federal adjusted gross income of an individual who is a

is required to file a Georgia Income Tax return on Form 700.

Page 2

Georgia Form 700 - Partnership Tax Return - 2006 Page 2

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