Ga. Comp. R. & Regs. R. 110-34-1-.06 - Rural Zone Tax Credits
(1) For eligible certified entities and
certified investors within a currently designated Rural Zone, tax credits may
be earned in accordance with O.C.G.A.
48-7-40.32 and accompanying
regulations. Nothing in this regulation shall be construed as authorization for
certified entities or certified investors to claim multiple job tax credits for
the same jobs or to claim multiple investment or rehabilitation credits for the
same investment or rehabilitation expenses.
(2) Before claiming the Rural Zone tax
credit, a certified entity or certified investor must apply for a certification
in a format prescribed by the Department of Community Affairs that the business
location where jobs are being created or the investment has been made,
including the rehabilitation credit, is located within a currently designated
Rural Zone.
(a) The certification application
must contain the address and parcel number;
(b) The certification application must verify
the baseline number of jobs prior to the eligibility for the credit, as well as
employment during the year for which credits are being claimed.
(c) The certified entity or certified
investor must file the certification with the local government's contact person
for the Rural Zone. The local jurisdiction must then certify that the certified
entity or certified investor location is within the Rural Zone, and that the
applicant meets all local ordinances and licensing standards.
(d) The certification must then be forwarded
to the Department of Community Affairs for acknowledgment.
(e) Once certified and acknowledged, a copy
will be provided to the applicant entity or investor, the local jurisdiction
and the Department of Revenue.
(3) Certified entities shall receive the
Rural Zone Job tax credit for five years beginning with the first taxable year
in which new full-time equivalent jobs are created within a designated zone and
for years two, three, four, and five of the taxable years immediately
following, provided the new full-time equivalent jobs are maintained for each
year the tax credit is claimed.
(a) Each new
full-time equivalent job created will be eligible for a $2,000.00 annual income
tax credit. The amount of credit claimed by each certified entity shall not
exceed $40,000.00 per taxable year.
(b) The number of new full-time equivalent
jobs shall be determined by comparing the monthly average of full-time
equivalent jobs subject to Georgia income tax withholding for a given taxable
year with the corresponding period of the prior taxable year; provided,
however, a certified entity which begins operations during the taxable year may
be certified by the Commissioner for the Department of Community Affairs to
base initial eligibility on a period of less than 12 months.
(c) This income tax credit shall not be
allowed during a year if the net employment increase falls below the number
required by subparagraph
110-34-1-.02(1)(A)
of these regulations.
(d) Any
credit generated and utilized in years prior to the year in which the net
employment increase falls below the number required by subparagraph
110-34-1-.02(1)(A)
of these regulations shall not be affected.
(e) Tax credits for the taxes imposed under
Article 2 of Chapter 7 of Title 48 shall be awarded for additional new
full-time equivalent jobs created by an eligible business qualified under
O.C.G.A. §
48-7-40.32 for the four years
immediately following an eligible Year One. Additional credits are allowed for
additional new full-time equivalent jobs if the eligible business already
qualifies for the Rural Zone tax credit based on full-time equivalent job
increases in year one. Additional new full-time equivalent jobs shall mean
those full-time equivalent jobs created in year two that increase an employer's
count of full-time equivalent jobs above the number of full-time equivalent
jobs in year one; and beyond with years three through five, etc. Additional new
full-time equivalent jobs may only be created in years two through five,
including all subsequent years two through five initiated by a qualifying
increase of full-time equivalent jobs.
(f) A subsequent year one and years two
through five are created when an eligible business creates the required
threshold number of new full-time equivalent jobs.
1. Subsequent periods of eligibility are
subject to all the provisions of these regulations and O.C.G.A. §
48-7-40.32.
2. Rural Zone Job Tax Credits generated under
previous periods of eligibility will not be affected as long as the full-time
equivalent jobs are maintained. But no new Rural Zone Job tax credits may be
generated under previous periods of eligibility after a subsequent period of
eligibility has begun.
3. If an
eligible business creates the required number of full-time equivalent jobs to
establish a subsequent period of eligibility, but does not meet other
requirements in law or regulation, no subsequent period of eligibility is
established. In addition, such full-time equivalent jobs may not be counted as
additional full-time equivalent jobs under a previous period of
eligibility.
(4) Certified investors who acquire and
develop property in a Rural Zone on or after January 1, 2018, shall receive the
Rural Zone Investment tax credit, subject to the following:
(a) Certified investors shall demonstrate a
property's ongoing commercial benefit as follows:
1. An eligible business is located in the
investment property and creates a minimum of two full-time equivalent jobs and
maintains employment levels equal to or greater than such levels for each year
the tax credit is claimed. This eligible business may or may not be owned by
the Certified Investor or
2. An
eligible business is located in the investment property and qualifies to
receive the tax credit pursuant to subsection (c) of O.C.G.A. §
48-7-40.32;
(b) The amount of the Investment tax credit
per project shall be 25 percent of the purchase price and shall not exceed
$125,000.00; provided, however, that the entire credit shall not be taken in
the year in which the property is placed in commercial service but shall be
prorated equally in five installments over five taxable years, beginning with
the taxable year in which the property is placed in service; and
(c) A certified investor shall be allowed to
preserve the Rural Zone Investment tax credit for up to seven years from the
date of initial eligibility in the event the commercial requirement in
paragraph (1) of this subsection is not satisfied in consecutive years.
(1) A certified investor or certified entity
with qualified rehabilitation expenditures on or after January 1, 2018, shall
receive the Rural Zone Rehabilitation tax credit for three years beginning with
the year the property is placed in service.
(a) The amount of the tax credit per project
shall be 30 percent of the qualified rehabilitation expenditures and shall not
exceed $150,000.00; provided, however, the entire credit shall not be taken in
the first year, but shall be prorated equally in three installments over three
taxable years, beginning with the taxable year in which the property is placed
in service.
(b) An eligible
business is located in the investment property and creates a minimum of two
full-time equivalent jobs and maintains employment levels equal to or greater
than such levels for each year the tax credit is claimed. This eligible
business may or may not be owned by the Certified Investor.
(c) A certified investor or certified entity
shall meet certain historic preservation standards in order to be qualified to
receive the Rural Zone Rehabilitation tax credit. The standards shall be
identified with the assistance of the Department of Natural Resources' Historic
Preservation Division and placed on the agency's website by the Department of
Community Affairs.
(d) A taxpayer
who is entitled to and takes credits provided by O.C.G.A. §
48-7-40.32 for a project shall not
be allowed to utilize the same qualified rehabilitation expenditures to
generate any additional state income tax credits, including, but not limited
to, the state income tax credit for rehabilitated historic property
administered by the Department of Natural Resources' Historic Preservation
Division.
(e) For projects
utilizing credits under O.C.G.A §
48-7-40.32, direct jobs for which
credits are received shall not be eligible toward qualifying for any other
job-related state tax credits provided under the Official Code of Georgia
(including but not limited to OZ, Georgia Jobs Tax Credit, Military Zone, Less
Developed Census Tract, etc.).
(f)
As a general rule, the teardown of facilities within a Rural Zone will not be
permitted to claim rehabilitation credits. However, in rare cases, exceptional
circumstances may warrant credits being earned at the discretion of the
Commissioner of Community Affairs.
(2) In no event shall the amount of the tax
credits allowed by O.C.G.A. §
48-7-40.32 for a taxable year
exceed a certified entity's or certified investor's state income tax liability.
Any credit claimed under O.C.G.A. §
48-7-40.32 by a certified entity or
certified investor but not used in any taxable year may be carried forward for
ten years from the close of the taxable year in which the credit is claimed. No
such credit shall be allowed by the taxpayer against prior years' tax
liability.
(3) Any tax credits
earned under O.C.G.A. §
48-7-40.32 are
nontransferable.
Notes
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