Georgia Form 700 - Partnership Tax Return - 2006 (Page 3 of 12) in pdf

GENERAL INFORMATION

(continued)

WHEN AND WHERE TO FILE

expense is multiplied by a fraction, the numerator of which is

Form 700 must be filed on or before the 15th day of the fourth

the taxpayer’s average adjusted basis of the U.S. obligations,

month following the close of the taxable year. Mail the form

and the denominator of which is the average adjusted basis

to: Georgia Department of Revenue, P.O. Box 740315,

of all assets of the taxpayer.

Atlanta, Georgia 30374-0315. If you list a credit on Form 700,

Any expense that is subject to further limitation (e.g., Section

Schedule 2, mail your return to: Georgia Department of

179 Deduction, Charitable Contributions, etc.) is not

Revenue, P. O. Box 49431, Atlanta, Georgia 30359-1431.

deductible in calculating total income for Georgia purposes.

However, these expenses may be deductible on the partner’s

FEDERAL AUDIT

income tax return.

If the Internal Revenue Service has adjusted net income within

Where salaries and wages are reduced in computing Federal

the last five years, a detailed statement of these adjustments

taxable income because a Federal jobs tax credit has been

must be submitted under separate cover to: Georgia

taken, which required the elimination of the salary and wages

Department of Revenue, Processing Center, P.O. Box

deduction, the eliminated salary and wage deduction shall be

740315, Atlanta, Georgia 30374-0315.

subtracted from Georgia taxable income. Regulation 560-7-

AMENDED RETURNS

7-.05 defines the term “federal jobs tax credit”.

If a partnership becomes aware of changes it must make after

Taxpayers who are parties to state contracts may subtract

filing its return, it should file an amended Form 700. Check the

from Federal taxable income or Federal adjusted gross

amended box on Form 700 and submit an amended K-1 for

income 10% of qualified payments to minority subcontractors

each partner and a complete copy of the amended Federal

or $100,000, whichever is less, per taxable year.

partnership return, including schedules, if applicable.

A list of certified minority subcontractors will be maintained

RELATION TO THE FEDERAL RETURN

by the Commissioner of the Department of Administrative

The Georgia return correlates to the Federal return in most

Services for the Revenue Department and general public. To

respects (see information on page 2 about Federal tax

changes). The accounting period and method used for the

the list, call 404-656-6315 or visit

Georgia return must be the same as on the Federal return.

VendorDB/mainframe.jsp.

A complete copy of the Federal return and all supporting

INCOME APPORTIONMENT AND ALLOCATION

schedules must be attached to the Georgia return. Otherwise,

(Schedules 6 and 1)

your return will be deemed incomplete.

If any Partnership, domestic or foreign, is doing business or

ADJUSTMENTS TO FEDERAL INCOME

owns property both within and without Georgia, the average

(Schedules 4 and 5)

ratio as computed in Schedule 6 should be used to compute

To determine the total income for Georgia purposes, certain

Georgia Net Income in Schedule 1. If the business income

adjustments as provided by Georgia law are included in the

of the partnership is derived from Georgia sources, from

computations for Schedules 4 and 5. The total additions to

property owned or business done within this State, and in

Federal Income should be placed on Line 9 of Schedule 7, and

part from property owned or business done without this State,

listed in Schedule 4. Georgia does not allow the Federal

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

deduction for income attributable to domestic production

income which is reasonably attributable to Georgia sources

activities (IRC Section 199). An adjustment to the Georgia

and property owned and business done within this State, to

partnership return is not required if the partnership is not allowed

be determined as follows:

the Section 199 deduction directly, but instead passes the

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

information needed to compute the deduction to the partners.

received from other intangible property held for investment

A partnership must add back all intangible expense and

are not subject to apportionment. Rentals received from real

related interest expense directly or indirectly paid to a

estate held purely for investment purposes and not used in

related member. All such expense must be listed as an

the operation of the business are also not subject to

addition to Federal income even if the taxpayer qualifies

apportionment. All expenses connected with the interest and

for an exception. If the taxpayer qualifies for a full or partial

rentals from such investments are likewise not subject to

exception, Form IT Addback must be completed in order

apportionment but must be applied against the investment

for the taxpayer to take a subtraction on Schedule 5 for all

income. The net investment income from intangible property

or any portion of the addition listed on Schedule 4.

shall be allocated to Georgia if the partnership’s situs is in

The total subtractions from Federal income should be shown

Georgia, or the intangible property was acquired as income

on Line 11 of Schedule 7, and listed in Schedule 5. The more

from property held in Georgia, or as a result of business done

commonly used items are listed in each schedule. Additionally,

in Georgia. Net investment income from tangible property in

adjustments due to other Federal tax changes should be

Georgia shall be allocated to Georgia.

reported as stated on page 2.

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

U.S. obligation income must be reduced by direct and indirect

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

interest expense. To arrive at such reduction, the total interest

the partnership, nor for sale in the regular course of business,

Page 3

Georgia Form 700 - Partnership Tax Return - 2006 Page 3

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