Current through Rules and Regulations filed through March 20, 2024
(1)
Program Description. The
headquarters job tax credit program authorized by Section
48-7-40.17provides a credit for taxes for a taxpayer establishing its headquarters in
this state or relocating its headquarters into this state.
(2)
Definitions.
(a)
Average Wage. The term
"average wage" means the average wage of the county in which a full-time job is
located as reported in the most recent annual issue of the Georgia Employment
and Wages Averages Report of the Department of Labor that is available as of
the last day of the tax year in which the jobs were created. For purposes of
this definition, wages means the total dollars paid during the year to an
employee, including but not limited to bonuses, incentive pay, and deductions
from gross pay. Wages does not mean contributions made by employers on behalf
of employees to health insurance, retirement, or other benefit
programs.
(b)
Full-time Job.
The term "full-time job" means employment for an individual in a
permanent, full-time position located in this state which:
1. Is located at a headquarters and is
engaged in performing headquarters related functions and services as a
headquarters staff employee;
2. Has
a regular workweek of 30 hours or more;
3. Pays at or above:
(i) In tier 1 counties, the average wage of
the county in which it is located;
(ii) In tier 2 counties, 105 percent of the
average wage of the county in which it is located;
(iii) In tier 3 counties, 110 percent of the
average wage of the county in which it is located; and
(iv) In tier 4 counties, 115 percent of the
average wage of the county in which it is located; and
4. Has no predetermined end date.
(c)
Headquarters. The
term "headquarters" means the principal central administrative office of a
taxpayer, where headquarters staff employees are located and employed, and
where the primary headquarters related functions and services are
performed.
(d)
Tier.
The term "tier" means a tier as designated pursuant to Code Section
48-7-40, as amended.
(e)
Headquarters
Related Functions and Services. The term "headquarters related functions
and services" means those functions involving financial, personnel,
administrative, legal, planning, or similar business functions performed by
headquarters staff employees.
(f)
Headquarters Staff Employees. The term "headquarters staff
employee" means executive, administrative, or professional workers performing
headquarters related functions and services.
1. An executive employee is a full-time job
employee who is primarily engaged in the management of all or part of the
enterprise.
2. An administrative
employee is a full-time job employee who is not primarily involved in manual
work and whose work is directly related to management policies or general
headquarters operations.
3. A
professional employee is an employee whose primary duty is work requiring
knowledge of an advanced type in a field of science or learning. This knowledge
is characterized by a prolonged course of specialized study.
(g)
New Full-Time Jobs.
The term "new full-time jobs" refers to full-time jobs that are new to
the state of Georgia. Jobs that are transferred from other Georgia locations of
the taxpayer or from other Georgia locations of an affiliate of the taxpayer
would not be jobs that are new to the state of Georgia. However, an employee in
a new full-time job may be employed at a temporary location in this state
pending completion of construction or renovation work at the
headquarters.
(3)
Establishing Eligibility for the Credit.
(a) A taxpayer must either establish its
headquarters in this state, or it must relocate its headquarters into this
state. Such establishment or relocation must occur on or after January 1,
2001.
(b) The first date on which
the taxpayer withholds wages for employees at such headquarters (pursuant to
the provisions of Code Section
48-7-101)
is a critical date with respect to the following eligibility requirements:
1. Prior to one year from such date the
taxpayer must incur within the state a minimum of $1 million in construction,
renovation, leasing, or other costs related to such establishment or
relocation; and
2. Within one year
of such date the taxpayer must employ at least 50 persons in new full-time jobs
at such headquarters, as provided in paragraph (3)(c).
(c) Once the taxpayer has employed at least
50 persons in new full-time jobs at its headquarters, the average number of new
full-time jobs at such headquarters must be at least 50 for a taxable
year.
(d) New full-time jobs at
such headquarters are determined for a taxable year by computing the average
number of new full-time jobs subject to Georgia income tax withholding for the
taxable year. This average shall be determined by the following method:
1. For each month of the taxable year, count
the total number of new full-time jobs that are subject to Georgia income tax
withholding as of the last payroll period of the month or as of the payroll
period during each month used for the purpose of reports to the Georgia
Department of Labor;
2. Add the
monthly totals of new full-time jobs; and
3. Divide the results by the number of months
in the taxable year.
(e)
The taxpayer must elect not to receive the tax credits provided for by Code
Sections
48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, 48-7-40.4, 48-7-40.7, 48-7-40.8, and
48-7-40.9for such jobs or for such project. This election is deemed to have been made
when the taxpayer claims the headquarters job tax credit on its state income
tax return. Under this election, taxpayers may not claim or carry forward the
headquarters job tax credit for any given project for which a job tax credit is
claimed under O.C.G.A. Sections
48-7-40 or
48-7-40.1, an investment tax credit is claimed under O.C.G.A. Sections
48-7-40.2, 48-7-40.3 or
48-7-40.4, or an optional investment tax credit is claimed under O.C.G.A. Sections
48-7-40.7, 48-7-40.8 or
48-7-40.9.
Neither may taxpayers alternately elect to claim the job tax credit, the
investment tax credit, or the optional investment tax credit in one year, and
the headquarters job tax credit in the next year for a given project. These
credits are not interchangeable. Taxpayers may elect to take only one of the
tax credits for a given project.
(4)
Calculation of Credit. A
taxpayer that has established eligibility for the headquarters job tax credit
shall be allowed a credit for taxes imposed under this article as follows:
(a) An amount equal to $2,500.00 annually per
new full-time job; or
(b) An amount
equal to $5,000.00 annually per new full-time job if the average wage of the
new full-time jobs created is 200 percent or more of the average wage of the
county in which such jobs are located.
(5)
Claiming the Credit.
(a) The headquarters job tax credit may be
taken on an income tax return for the first taxable year in which the taxpayer
first becomes eligible for such credit. The credit may also be claimed for each
of the four immediately succeeding taxable years, provided the number of new
full-time jobs as required in (3)(c) of this regulation and as calculated in
(3)(d) of this regulation are maintained in each year. Thereafter, the taxpayer
shall be ineligible to claim the headquarters job tax credit on an income tax
return, except to the extent that the taxpayer qualifies for a carry forward of
the credit in accordance with paragraph (d) below.
(b) The credit may be used to offset 100
percent of the taxpayer's Georgia state income tax liability in the taxable
year.
(c) Where the amount of such
credit exceeds the taxpayer's income tax liability in a taxable year, the
excess may be taken as a credit against such taxpayer's quarterly or monthly
withholding tax payment under Code Section
48-7-103.
The amounts claimed under this paragraph may not exceed in any one taxable year
$2,500.00 annually per new full-time job, or $5,000.00 if the average wage of
the new full-time jobs created is 200 percent or more of the average wage of
the county in which such jobs are located.
(d) Any credit claimed under this code
section but not used in any taxable year may be carried forward for ten years
from the close of the taxable year in which the qualified jobs were established
as eligible new full-time jobs for purposes of computing the credit.
(6)
Documentation. At
the time the credit is claimed on an income tax return, the taxpayer shall
submit to the commissioner a listing of headquarters staff employees in new
full-time jobs. Such listing shall include the name of the employee, social
security number, wages, amount of credit claimed for such employee (whether
$2,500.00 or $5,000.00), and any other information that the commissioner may
request.
(7)
Notification and
Process to Claim and Receive Withholding Tax Credit.
(a)
Notification of Intention to Claim
Withholding Tax Credit. A taxpayer establishing its headquarters in this
state or relocating its headquarters into this state must notify the
commissioner each year of its election to take all or part of the credit
against the quarterly or monthly withholding tax payment for such taxpayer.
This notification must be made at least thirty (30) days prior to the date on
which the income tax return for the taxpayer is filed with the department.
Taxpayers should use Form IT-JOBW for this purpose.
(b)
Process for Receiving Withholding
Tax Credit Benefits. Within ninety (90) days of the date the income tax
return is filed in accordance with instructions provided by the department, the
commissioner will confirm to the taxpayer the approved amount of headquarters
job tax credit and the date when the taxpayer may begin retaining withholding
tax payments otherwise due to the department.
(8)
Pass-Through of Credit.
(a)
"S" Corporations. Taxpayers
that are "S" corporations will apply the headquarters job tax credit to
corporate income tax liability at the entity level if one exists. Any remaining
credit will then be apportioned to shareholders based on their percentage share
of ownership of the corporation in the same manner as other pass-through items.
Taxpayers that are "S" corporations that otherwise qualify to take all or a
part of the headquarters job tax credit against withholding tax otherwise due
the department must make an irrevocable election to do so as a part of their
notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to shareholders.
(b)
Partnership. Where the taxpayer is a partnership, the headquarters
job tax credit will be apportioned to partners according to the partnership
agreement for sharing income or loss, or if there is no partnership agreement
for sharing income or loss, according to the partner's interest in the
partnership. Taxpayers that are partnerships that otherwise qualify to take all
or a part of the headquarters job tax credit against withholding tax otherwise
due the department must make an irrevocable election to do so as a part of
their notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to partners.
(c)
Limited Liability Companies. Taxpayers that are limited liability
companies will apportion the headquarters job tax credit to members based on
their percentage ownership of the limited liability company. Taxpayers that are
limited liability companies that otherwise qualify to take all or a part of the
headquarters job tax credit against withholding tax otherwise due the
department must make an irrevocable election to do so as a part of their
notification to the commissioner required under paragraph 7(a) of this
regulation. When this election is made no headquarters job tax credit will be
apportioned to members.
O.C.G.A. Secs.
48-2-12, 48-7-40.17.