As we are in the early months of 2019, some businesses in Georgia are taking stock of their tax strategy for the new year. Ultimately, there have been several changes that corporate America is still digesting, including the effect of the most recent corporate tax reform.
Certainly, this piece of legislation has had a large effect on your business’s tax planning strategy and tax obligations. But that said, it isn’t the only relevant consideration. You also have to consider state and local taxes. And with this task, you will need to consider all elements of Georgia tax law—including tax abatements.
Luckily, there are several tax abatements that Georgia businesses can leverage this year. By taking advantage of some of these opportunities, your business can keep some extra capital that can be deployed to more research and development opportunities or capital expenditures.
As with any tax advice, you will want to speak with any relevant accountants, bookkeepers, or attorneys at your company. It is always better to err on the side of caution, so if you have any doubt, please speak with all relevant actors within your organization.
Before engaging in this discussion, it is important to note that your county may provide certain tax abatements that are not available in other counties. This article intends to provide more general advice for Georgia businesses. So, if you’re interested in learning more about tax abatements in your county, we encourage you to do a bit of research to determine which tax abatements are most applicable to you.
Having said that, there are several programs within the state that can help your business reduce its tax bill. You will have to examine whether they are applicable to you, but rest assured that the opportunities are there.
First, let’s talk about the Georgia Retraining Tax Credit. Georgia businesses can earn a tax credit if they retrain their workers in a variety of ways, whether that’s retraining workers to use new equipment or technology or even instituting ISO 9000 training within your company. As part of this program, your business can receive a tax credit of up to 50 percent of direct training expenses with up to $500 credit per full-time employee, per training program. While you will want to view the specifics here to determine eligibility and the complete list of benefits, you may want to take advantage of this opportunity if your business intends on retraining employees.
Next, you may want to leverage the Georgia Job Tax Credit or the Georgia Quality Jobs Tax Credit. As for the Georgia Job Tax Credit, your business must be engaged in manufacturing, warehouse and distribution, processing, telecommunications, tourism, or research and development industries. Retail businesses are ineligible. Eligible companies can receive $750 to $4,000 dollars per job created, per year, for five years—so long as the new job creation threshold isn’t reached. To learn more about this tax credit, click here. As for the Georgia Quality Jobs Tax Credit, all industries are eligible—so long as you create 50 new jobs within a twelve month period and those jobs pay wages at least ten percent higher than the county average wage. Click here to learn more about this program and determine if you are eligible.
Depending on your business, you can also leverage a wide group of tax credits and abatements. For instance, the Port Tax Credit Bonus allows Georgia businesses to receive a tax credit if they increase imports or exports through a Georgia port by at least ten percent. Georgia’s Research and Development Tax Credit gives tax relief to qualified businesses that increase their research and development spending. The Work Opportunity Tax Credit is granted to eligible businesses that hire individuals who have faced barriers to employment. Your company can even receive a tax credit if it constructs qualified childcare facilities on property (the tax credits would equal the entire cost of construction). Ultimately, the state of Georgia provides a wide array of tax credits and abatements to businesses operating within the state. Because of this, you will want to do further research and diligence to determine how to best proceed.
While this guide provides more generalized advice to Georgia businesses, we’d like to speak about one tax abatement for businesses located in the Atlanta metro area. This is due to Atlanta being the capital of the state and the location of many large businesses in the state.
One of the more obvious tax abatements that you and your company can leverage is located within the City of Atlanta Urban Enterprise Zone (“UEZ”) Program. The UEZ Program was designed “to encourage private development and redevelopment in the areas of [Atlanta] or on sites which otherwise would unlikely be developed due to the existence of certain characteristics on the area or site.” Along with this, an urban enterprise zone is “a designated district that is located within an economically-depressed area of [Atlanta] where property owners receive tax abatements over a ten-year period, if certain conditions are met.”
Even if your business has been located in the same location for some time, it may be located in an enterprise zone area of at least three of five criteria are fulfilled. Those criteria include: pervasive poverty in the area, an unemployment rate in the area at least 10 percent higher than State or significant job dislocation, underdevelopment in the area, general distress and adverse conditions in the area, and general blight. While these criteria are perhaps intentionally vague, you can find the entirety of the guidelines by clicking here. Ultimately, the incentive of being located in an urban enterprise zone is that you can obtain a local property tax exemption (per OCGA 36-88-8(a)(1)) and a local abatement or reduction in occupation taxes, regulatory fees, building inspection fees, and other various fees that could be imposed on qualifying businesses (per OCGA 36-88-9(a)).
While tax policy, at times, can be confusing, it is in your company’s direct financial benefit to determine which tax credits and abatements that it can leverage. Whether you are located in Forsyth County, elsewhere in the metro Atlanta area, Savannah, or somewhere else in the state, we encourage you to check out your options. If necessary, speak with an accountant or in-house counsel. We wish you the best of luck!