Form It-711 - Partnership Income Tax General Instructions

TAX CREDITS

(continued)

112

Research Tax Credit. A tax credit is allowed for research expenses for research conducted within Georgia for any

business or headquarters of any such business engaged in manufacturing, warehousing, and distribution, processing,

telecommunications, tourism, broadcasting or research and development industries. The credit shall be 10% of the

additional research expense over the “base amount,” provided that the business enterprise for the same taxable year

claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986. For tax years begin-

ning on or after January 1, 2009, the base amount calculation is based on Georgia gross receipts instead of Georgia

taxable net income. (Note that for tax years beginning before January 1, 2009, the base amount must contain positive

Georgia taxable net income for all years.) The credit may not exceed 50% of the business’ Georgia net income tax

liability after all other credits have been applied in any one year. Any unused credit may be carried forward 10 years.

Excess research tax credit earned in taxable years beginning on or after January 1, 2012, may be used to offset with

holding as provided in the research tax credit regulation. This credit should be claimed on Form IT-RD. For more

information, refer to O.C.G.A. §48-7-40.12.

113

Headquarters Tax Credit. Companies establishing their headquarters or relocating their headquarters to Georgia prior

to January 1, 2009 may be entitled to a tax credit if the following criteria are met: 1) At least fifty (50) headquarters jobs

are created; and 2) within one year of the first hire, $1 million is spent in construction, renovation, leasing, or other cost

related to such establishment or reallocation. Headquarters is defined as the principal central administrative offices of

a company or a subsidiary of the company. The credit is available for establishing new full-time jobs. To qualify, each job

must pay a salary which is a stated percentage of the average county wage where the job is located: Tier 1 counties at

least 100%; Tier 2 counties at least 105%; Tier 3 counties at least 110%; and Tier 4 counties at least 115%. The company

has the ability to claim the credit in years one through five for jobs created in year one and may continue to claim newly

created jobs through year seven and claim the credit on each of those jobs for five years. The credit is equal to $2,500

annually per new full-time job meeting the wage requirement or $5,000 if the average wage of all new qualifying fulltime

jobs is 200% or more of the average county wage where new jobs are located. The credit may be used to offset 100

percent of the taxpayers Georgia income tax liability in the taxable year. Where the amount of such credit exceeds the

taxpayer’s tax liability in a taxable year, the excess may be taken as a credit against such taxpayer’s quarterly or monthly

withholding tax. To claim the credit against withholding, a business must file Form IT-WH at least 30 days prior to filing

the return on which the applicable jobs are claimed. Once the income tax return is filed, the Department has 90 days to

review the withholding credit being claimed and notify the business of the approved credit and when and how it may be

claimed. This credit should be applied for and claimed on Form IT-HQ. For more information, refer to O.C.G.A. §48-7-

40.17.

114

Port Activity Tax Credit (Use 114J for Port Activity Job Tax Credit and 114M for Port Activity Investment Tax

Credit). For taxable years beginning before January 1, 2010, businesses or the headquarters of any such businesses

engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or re-

search and development that have increased shipments out of Georgia ports during the previous 12-month period by

more than 10% over their 1997 base year port traffic, or by more than 10% over 75 net tons five containers or ten 20-

foot equivalent units (TEU’s) during the previous 12-month period are qualified for increased job tax credits or invest-

ment tax credits. NOTE: Base year port traffic must be at least 75 net tons, five containers, or 10 TEU’s. If not, the per-

centage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEU’s as the base. Companies

must meet Business Expansion and Support Act (BEST) criteria for the county in which they are located. The tax credit

amounts are as follows for all Tiers: An additional job tax credit of $1,250 per job; investment tax credit of 5%; or optional

investment tax credit of 10%.Companies that create 400 or more new jobs, invest $20 million or more in new and ex-

panded facilities, and increase their port traffic by more than 20% above their base year port traffic may take both job tax

credits and investment tax credits. The credit is claimed by filing the appropriate form for the applicable credit (job tax:

Form IT-CA; investment tax: Form IT-IC or optional: Form IT-OIT) with the tax return and providing a statement with

port numbers to verify the increase in port traffic. For more information, refer to O.C.G.A. §48-7-40.15.

For tax years beginning on or after January 1, 2010, the following changes apply:

1. “Base year port traffic” means the amount of imports and exports during the second preceding 12 month period. For

example, if the taxpayer is trying to claim the credit for 2010, they would compare 2009 to 2008 and if the increase is

more than 10% they would qualify. NOTE: Base year port traffic must be at least 75 net tons, five containers, or 10

TEU’s. If not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEU’s

as the base.

2. “Port traffic” means the amount of imports and exports.

Bank Tax Credit. All financial institutions that conduct business or own property in Georgia are required to file a

115

Georgia Financial Institutions Business Occupation Tax Return, Form 900. Effective on or after January 1, 2001, a

depository financial institution with a Sub S election can pass through the credit to its shareholders on a pro rata basis.

For more information, refer to O.C.G.A. §48-7-29.7.

Low Emission Vehicle Credit. This is a credit, the lesser of 10% of the cost of the vehicle or $2,500, for the purchase

116

or lease of a new low emission vehicle. Also there is a credit for the conversion of a standard vehicle to a low emission

vehicle which is equal to 10% of the cost of conversion, not to exceed $2,500 per converted vehicle. Certification appr-

oved by the Environmental Protection Division of the Department of Natural Resources must be included with

the return for any credit claimed under this provision. A statement from the vehicle manufacturer is not accept

able. A low emission vehicle is defined as an “alternative fuel” vehicle and does not include any gasoline powered vehi-

cles (i.e. hybrids). A “low speed vehicle” does not qualify for this credit. For more information, refer to O.C.G.A. §48-7-

40.16. The low emission vehicle tax credit was repealed and cannot be claimed for vehicles purchased or leased on or

after July 1, 2015.

Page 11

Form It-711 - Partnership Income Tax General Instructions - 2015 Page 12

Related Articles

Related forms

Related Categories