Form It 611 - Corporation Income Tax Forms And General Instructions

GENERAL INFORMATION:

INCOME TAX

(continued)

A corporation may subtract federally taxable interest received

When salaries and wages are reduced on the Federal return

on Georgia municipal bonds designated as “Build America

to compute Federal taxable income because of a Federal jobs

Bonds” under Section 54AA of the Internal Revenue Code of

tax credit, the eliminated salary and wage deduction should

1986. “Recovery Zone Economic Development Bonds” under

be listed in Schedule 5 as a subtraction from Federal taxable

Section 1400U-2 of the Internal Revenue Code or any other

income. See Georgia Code Section 48-7-21 for additional

bond treated as a “Qualified Bond” under Section 6431 (f) of

adjustments.

the Internal Revenue Code are considered “Build America

Bonds” for this purpose.

ALLOCATION AND APPORTIONMENT OF INCOME

A corporation may subtract federally taxable interest received

If any corporation, domestic or foreign, does business or owns

on Georgia municipal bonds issued by the State of Georgia

property both within and outside Georgia, Schedules 6 and 7

and certain authorities or agencies of the State of Georgia for

should be used to compute Georgia taxable income.

which there is a special exemption under Georgia law from

The tax imposed by Georgia law applies to the entire net income

Georgia tax on interest.

as previously defined, received by every corporation, foreign or

A corporation which is a party to state contracts may subtract

domestic, that owns property in this state, does business in

from Federal taxable income 10% of qualified payments to

this State, or derives income from sources in this state. Every

minority subcontractors or $100,000, whichever is less, per

such corporation shall be deemed to be doing business in this

taxable year. The Commissioner of the Department of

State if engaged within this State in any activities or transactions

Administrative Services maintains a list of certified minority

for the purpose of financial profit or gain; whether or not such

subcontractors for the Revenue Department and general public.

corporation is registered to do business in this State; whether

To register as a minority subcontractor or to view the list, visit

or not it maintains an office or place of business within this

the DOAS website at

State; whether or not any such activity or transaction is

SupplierMBE.aspx

connected with interstate or foreign commerce. If the business

Corporations doing business both within and outside Georgia

income of the corporation is derived in part from Georgia

who incur a loss shall compute the net operating loss carryover

sources, from property owned or business done within this

deduction by allocating to Georgia only the amount of the loss

State, and derived in part from property owned or business

attributable to operations within Georgia. This deduction shall

done outside the State, the tax is imposed only on that portion

be entered on Schedule 7, Line 8.

of the business income which is reasonably attributable to

Georgia sources and property owned and business done within

A net operating loss sustained for the current taxable

the State, to be determined as follows:

year must be carried back and carried forward in the

procedural sequence of taxable periods provided by

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

Section 172 of the Internal Revenue Code of 1986, as it

received from other intangible property held for investment are

existed on January 3, 2013, and as adopted by Section

not subject to apportionment. Rentals received from real estate

48-7-21 of the income tax laws of Georgia. Accordingly,

held purely for investment purposes and not used in the

for tax years beginning on or after January 1, 2013, losses

operation of the business are also not subject to apportionment.

should generally be carried back two years (with special

All expenses connected with the interest and rentals from

rules for farmers, casualty losses, etc). Also for tax years

such investments are likewise not subject to apportionment

beginning on or after January 1, 2005, Georgia law was

but must be applied against the investment income. The net

changed to specifically provide that Georgia follows

investment income from intangible property shall be allocated

I.R.C. Sections 108, 381, 382, and 384. Please see page 1

to Georgia if the situs of the corporation is in Georgia or the

for the net operating loss carryover provisions Georgia

intangible property was acquired as income from property held

does not follow.

in Georgia, or as a result of business done in Georgia. The net

investment income from tangible property in Georgia shall be

If you claim a net operating loss deduction, you must file a

allocated to Georgia.

complete statement detailing the sources for such deduction.

(Attach Form IT-552 and Form 600, Schedule 11.)

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

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

Georgia Taxes Deductible. There shall be added to taxable

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

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

shall be allocated to the State if the property held is real or

paid or accrued within the taxable year imposed by the

tangible personal property situated in the State, or intangible

authority of the United States or any foreign country, or by any

property having an actual situs or a business situs within the

state except the State of Georgia, or by any territory, county,

State. Otherwise, such gains shall be allocated outside the

school district, municipality, or other tax subdivision of any

State.

state, territory, or foreign country to the extent such taxes are

deducted to determine Federal taxable income. This includes

(3) When net income of the above classes have been separately

Federal environmental tax.

allocated and deducted, the remainder of the net business

income shall be apportioned as follows:

Page 7

Form It 611 - Corporation Income Tax Forms And General Instructions - 2013 Page 9

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