Section 48-7-40.25 - [Effective 1/1/2025] Tax credits for investment in expanding existing manufacturing facilities; enhancements for high-impact aerospace defense projects(a) As used in this Code section, the term: (1) "Business enterprise" means any business or the headquarters of any such business which is engaged in manufacturing. Such term shall not include retail businesses.(2) "Force majeure" means any: (A) Explosions, implosions, fire, conflagrations, accidents, or contamination;(B) Unusual and unforeseeable weather conditions such as floods, torrential rain, hail, tornadoes, hurricanes, lightning, or other natural calamities or acts of God;(C) Acts of war (whether or not declared), carnage, blockade, or embargo;(D) Acts of public enemy, acts or threats of terrorism or threats from terrorists, riot, public disorder, or violent demonstrations;(E) Strikes or other labor disturbances; or(F) Expropriation, requisition, confiscation, impoundment, seizure, nationalization, or compulsory acquisition of the site of a qualified project or any part thereof; but such term shall not include any event or circumstance that could have been prevented, overcome, or remedied in whole or in part by the taxpayer through the exercise of reasonable diligence and due care, nor shall such term include the unavailability of funds.
(3) "Full-time employee" means an individual holding a full-time employee job.(4) "Full-time employee job" and "full-time job" mean employment of an individual which: (A)(i) With respect to a qualified project, is located in this state at the manufacturing facility resulting from such qualified project; and(ii) With respect to a high-impact aerospace defense project certified pursuant to paragraph (2) of subsection (b) of this Code section on or after July 1, 2021, is located in this state and results from such project;(B) Involves a regular work week of 35 hours or more;(C) Has no predetermined end date; and(D) Pays at or above the average wage of the county with the lowest average wage in the state, as reported in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor. For purposes of this paragraph, leased employees will be considered employees of the company using their services, and such persons may be counted in determining the company's credits under this Code section if their employment otherwise meets the definition of full-time job contained herein. In addition, an individual's employment shall not be deemed to have a predetermined end date solely by virtue of a mandatory retirement age set forth in a company policy of general application. The employment of any individual in a bona fide executive, administrative, or professional capacity, within the meaning of Section 13 of the federal Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Section 213(a)(1), as such act existed on January 1, 2002, shall not be deemed to have a predetermined end date solely by virtue of the fact that such employment is pursuant to a fixed-term contract, provided that such contract is for a term of not less than one year.
(4.1) "High-impact aerospace defense project" means a qualified project with the additional limitations that it is: (A) To be constructed by a business enterprise that is a prime aerospace defense contractor with greater than 40 percent of its revenues derived from sales to the United States government in its most recently completed tax year; and(B) Certified by the commissioner of economic development as materially supportive of the mission of the Georgia Joint Defense Commission and the Governor's Defense Initiative. In making such a certification, the commissioner shall consider whether the project will support the goals of the Georgia Joint Defense Commission set forth in paragraphs (2), (3), and (4) of Code Section 20-4-121.(5) "Investment requirement" means the requirement that:(A) With respect to a qualified project, a minimum of $800 million in qualified investment property shall have been purchased or acquired for use in such qualified project and be in service; or(B) With respect to a high-impact aerospace defense project certified pursuant to paragraph (2) of subsection (b) of this Code section on or after July 1, 2021, a minimum of $500 million in qualified investment property shall have been purchased or acquired for use in such project and be in service.(6) "Job maintenance requirement" means the requirement that the monthly average number of full-time employees employed by the business enterprise during the first 60 months of the recapture period must equal or exceed 90 percent of the job requirement.(7) "Job requirement" means the requirement that:(A) With respect to a qualified project, the number of full-time employees must equal or exceed 1,800; or(B) With respect to a high-impact aerospace defense project certified pursuant to paragraph (2) of subsection (b) of this Code section on or after July 1, 2021, the number of full-time employees must equal or exceed 1,000.(8) "Qualified investment property" means all real and personal property purchased or acquired by a taxpayer for use in a qualified project, including, but not limited to, amounts expended on land acquisition, improvements, buildings, building improvements, and machinery and equipment to be used in the manufacturing facility.(9) "Qualified project" means the construction of a new manufacturing facility in this state. For purposes of this paragraph, the term "manufacturing facility" means a single facility, including contiguous parcels of land, improvements to such land, buildings, building improvements, and any machinery or equipment that is used in the process of making, fabricating, constructing, forming, or assembling a product from components or from raw, unfinished, or semifinished materials, and any support facility. For purposes of this paragraph, the term "support facility" means any warehouses, distribution centers, storage facilities, research and development facilities, laboratories, repair and maintenance facilities, corporate offices, sales or marketing offices, computer operations facilities, or administrative offices that are contiguous to the manufacturing facility that results from a qualified project, constructed or expanded as part of the same such project, and designed primarily for activities supporting the manufacturing operations at such manufacturing facility.(10) "Recapture period" means the period of ten consecutive taxable years that commences after the taxable year in which the taxpayer has met both the investment requirement and the job requirement.(b) A business enterprise that has operated an existing manufacturing facility in this state for the immediately three preceding years and that is planning a qualified project shall be allowed to take the credit provided by this Code section under the following conditions:(1) An application is filed with the commissioner that: (A) Describes the qualified project to be undertaken by the business enterprise, including when such project will commence;(B) Certifies that such project will meet the investment requirement and the job requirement prescribed by this Code section, stating when the business enterprise expects to meet such requirements;(C) With respect to a high-impact aerospace defense project, certifies that the taxpayer will purchase or acquire a minimum of $800 million in qualified investment property and will employ at least 1,800 full-time employees, stating when the business enterprise expects to meet such requirements; and(D) Certifies that during the recapture period applicable to such project the business enterprise will meet the job maintenance requirement prescribed by this Code section; and(2) Following the commissioner's referral of the application to a panel composed of the commissioner of community affairs, the commissioner of economic development, and the director of the Office of Planning and Budget, said panel, after reviewing the application, certifies that the new facility will have a significant beneficial economic effect on the region for which it is planned. The panel shall make its determination within 30 days after receipt from the commissioner of the taxpayer's application and any necessary supporting documentation. Although the panel's certification may be based upon other criteria, a project that meets the minimum job and investment requirements specified in paragraph (1) of this subsection will have a significant beneficial economic effect on the region for which it is planned if one of the following additional criteria is met: (A) The full-time employee jobs resulting from such project will pay average wages that are, as determined by the Georgia Department of Labor for all jobs, for the county in question: (i) Twenty percent above such average wage for projects located in tier 1 counties;(ii) Ten percent above such average wage for projects located in tier 2 counties; or(iii) Five percent above such average wage for projects located in tier 3 or tier 4 counties; or(B) The project demonstrates high growth potential based upon the prior year's Georgia net taxable income growth of over 20 percent from the previous year, if the taxpayer's Georgia net taxable income in each of the two preceding years also grew by 20 percent or more.(c) Any lease for a period of five years or longer of any real or personal property used in a new manufacturing facility which would otherwise constitute qualified investment property shall be treated as the purchase or acquisition thereof by the lessee. The taxpayer may treat the full value of the leased property as qualified investment property in the year in which the lease becomes binding on the lessor and the taxpayer.(d) A business enterprise whose application is approved shall be allowed a credit against the tax imposed under this article in an amount equal to 6 percent of the cost of all qualified investment property purchased or acquired by the business enterprise in such year, subject to the conditions and limitations set forth in this Code section. Where the amount of such credit exceeds a business enterprise's liability for such taxes in a taxable year, the excess may be taken as a credit against such business enterprise's quarterly or monthly payment under Code Section 48-7-103. The taxpayer may file an election with the commissioner to take such credit against quarterly or monthly payments under Code Section 48-7-103 that become due before the due date of the income tax return on which such credit may be claimed. In the event of such an election, the commissioner shall confirm with the taxpayer a date, which shall not be later than 30 days after receipt of the taxpayer's election, when the taxpayer may begin to take the credit against such quarterly or monthly payments. Each employee whose employer receives credit against such business enterprise's quarterly or monthly payment under Code Section 48-7-103 shall receive credit against his or her income tax liability under Code Section 48-7-20 for the corresponding taxable year for the full amount which would be credited against such liability prior to the application of the credit provided for in this subsection. Credits against quarterly or monthly payments under Code Section 48-7-103 and credits against liability under Code Section 48-7-20 established by this subsection shall not constitute income to the taxpayer.(e) The credit granted under subsection (d) of this Code section shall be subject to the following conditions and limitations:(1) In order to qualify as a basis for the credit, the investment in qualified investment property must occur no sooner than the date of application by the taxpayer for the qualified project pursuant to paragraph (1) of subsection (b) of this Code section. The credit may be taken beginning with the taxable year in which the taxpayer has met both the investment requirement and the job requirement, and for such first year the credit may include qualified investment property purchased or acquired in prior years but after the date of application by the taxpayer for the qualified project pursuant to paragraph (1) of subsection (b) of this Code section. For each year in which a taxpayer claims the credit, the taxpayer shall attach a schedule to the taxpayer's Georgia income tax return which will set forth the following information, as a minimum: (A) A description of the qualified project;(B) The amount of qualified investment property acquired during the taxable year;(C) The amount of tax credit claimed for the taxable year;(D) The amount of qualified investment property acquired in prior taxable years;(E) Any tax credit previously taken by the taxpayer against Georgia income tax liabilities or the taxpayer's quarterly or monthly payments under Code Section 48-7-103;(F) The amount of tax credit carried over from prior years;(G) The amount of tax credit utilized by the taxpayer in the current taxable year;(H) The amount of tax credit to be carried over to subsequent tax years; and(I) The monthly average number of full-time jobs during the taxable year;(2) Any credit claimed under this Code section but not fully used in the manner prescribed in subsection (d) of this Code section may be carried forward for ten years from the close of the later of: (A) The taxable year in which the qualified investment property was acquired; or(B) The taxable year in which both the job requirement and investment requirement are satisfied. The sale, merger, acquisition, or bankruptcy of any business enterprise shall not create new eligibility in any succeeding business entity but any unused investment tax credit may be transferred and continued by any transferee of the business enterprise;
(3) In the initial year in which the taxpayer claims the credit granted in subsection (d) of this Code section, the taxpayer shall include in the description of the project required by subparagraph (A) of paragraph (1) of this subsection information which demonstrates that the taxpayer has met both the investment requirement and the job requirement during such year; and(4) The utilization of the credit granted in subsection (d) of this Code section shall have no effect on the taxpayer's ability to claim depreciation for tax purposes on the assets acquired by the taxpayer, nor shall the credit have any effect on the taxpayer's basis in such assets for the purpose of depreciation.(f)(1) Except as provided in paragraph (2) of this subsection, in no event may credits exceeding $50 million in the aggregate be claimed under this Code section with respect to any one project.(2) In no event shall a taxpayer claim credits exceeding $100 million in the aggregate under this Code section with respect to a high-impact aerospace defense project.(g)(1) Except as provided in paragraph (2) of this subsection, a taxpayer who is entitled to and takes credits provided by this Code section with respect to a qualified project shall not be allowed to take any of the credits authorized by Code Section 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, 48-7-40.4, 48-7-40.6, 48-7-40.7, 48-7-40.8, 48-7-40.9, 48-7-40.10, 48-7-40.15, 48-7-40.17, 48-7-40.18, or 48-7-40.24 with respect to jobs, investments, child care, or ground-water usage shifts created by, arising from, related to, or connected in any way with the same project. Such taxpayer may take any credit authorized by Code Section 48-7-40.5 for the cost of retraining an employee located at the site of such project or the manufacturing facility resulting therefrom, but only with respect to costs incurred more than five years after the date the manufacturing facility first becomes operational.(2) A taxpayer who is entitled to and takes credits authorized by this Code section for a high-impact aerospace defense project certified pursuant to paragraph (2) of subsection (b) of this Code section on or after July 1, 2021, may also take the credits authorized by Code Sections 48-7-40.17 and 48-7-40.24 for such project.(h)(1) With respect to each qualified project, not more than 60 days after the close of the fifth taxable year within the recapture period, the taxpayer shall file a report, using such form and providing such information as the commissioner may reasonably require, concerning whether it met the job maintenance requirement. If the taxpayer fails to meet the job maintenance requirement, such taxpayer shall forfeit its right to all credits provided by this Code section for such project.(2) Within 60 days after the close of the tenth taxable year within the recapture period, any taxpayer that takes a credit allowed under this Code section with respect to a high-impact aerospace defense project shall file a report, using such form and providing such information as the commissioner may reasonably require, which establishes that the taxpayer purchased or acquired at least $800 million in qualified investment property and employs at least 1,800 full-time employees with respect to such high-impact aerospace defense project. If the taxpayer fails to establish that such objectives were met by the close of the tenth taxable year within the recapture period, such taxpayer shall forfeit its right to all credits provided by this Code section for such project.(3) A taxpayer that forfeits its right as provided in paragraph (1) or (2) of this subsection is liable for all past taxes imposed by this article and all past payments under Code Section 48-7-103 that were forgone by the state as a result of the credits provided by this Code section, plus interest at the rate established by Code Section 48-2-40 computed from the date such taxes or payments would have been due if the credits had not been taken. No later than 90 days after notification by the commissioner that the taxpayer has failed to meet the job maintenance requirement or the objectives required of a high-impact aerospace defense project, the taxpayer shall file amended income tax and withholding tax returns for all affected periods that recalculate those liabilities without regard to the forfeited credits and shall pay any additional amounts shown on such returns, with interest as provided herein.(i) A taxpayer who fails to meet the job maintenance requirement or the objectives required of a high-impact aerospace defense project because of force majeure may petition the commissioner for relief from such requirement. Such a petition must be made with and at the same time as the report required by subsection (h) of this Code section. If the commissioner determines that force majeure materially affected the taxpayer's ability to meet the job maintenance requirement, but that the portion of any year so affected was six months or less, the commissioner shall calculate the taxpayer's monthly average number of full-time employees for purposes of subsection (h) of this Code section by disregarding the affected months. If the commissioner determines that the affected portion of any such year was more than six months, the taxable year shall be disregarded in its entirety for purposes of the job maintenance requirement and the recapture period applicable to the qualified project shall be extended for an additional year.(j) If the manufacturing facility resulting from a qualified project is abandoned at any time during the recapture period, the taxpayer will forfeit the right to all credits provided by this Code section for such project. A taxpayer that forfeits such right is liable for all past taxes imposed by this article and all past payments under Code Section 48-7-103 that were forgone by the state as a result of the credits provided by this Code section, plus interest at the rate established by Code Section 48-2-40 computed from the date such taxes or payments would have been due if the credits had not been taken. For purposes of this subsection, a manufacturing facility will be considered abandoned if there is, for any reason other than force majeure, a complete cessation of manufacturing operations for a period of 12 consecutive months or more during the recapture period. Not more than 60 days after the close of the recapture period, the taxpayer shall file a report, using such form and providing such information as the commissioner may require, concerning whether such an abandonment occurred. No later than 90 days after notification by the commissioner that an abandonment occurred, the taxpayer shall file amended income tax and withholding tax returns for all affected periods that recalculate those liabilities without regard to the forfeited credits and shall pay any additional amounts shown on such returns, with interest as provided herein.(k) Unless more time is allowed therefor by Code Section 48-7-82 or 48-2-49, the commissioner may make any assessment attributable to the forfeiture of credits claimed under this Code section for the periods covered by any amended returns filed by a taxpayer pursuant to subsections (h) and (j) of this Code section within one year from the date such returns are filed. If the taxpayer fails to file the reports or any amended return required by subsections (h) and (j) of this Code section, the commissioner may assess additional tax or other amounts attributable to the forfeiture of credits claimed under this Code section at any time.(l) The commissioner shall promulgate any rules and regulations necessary to implement and administer this Code section.Amended by 2024 Ga. Laws 598,§ 1-29, eff. 1/1/2025, app. only to unused tax credits generated during taxable years beginning on or after 1/1/2025.Amended by 2021 Ga. Laws 166,§ 2-4, eff. 7/1/2021.Amended by 2005 Ga. Laws 19,§ 48, eff. 4/7/2005.Amended by 2004 Ga. Laws 569, § 21, eff. 7/1/2004.Added by 2003 Ga. Laws 343, § 8, eff. 6/3/2003. See 2003 Ga. Laws 343, § 47.This section is set out more than once due to postponed, multiple, or conflicting amendments.