2023 CODE OF GEORGIA › Title 48 - REVENUE AND TAXATION (§§ 48-1-1 — 48-18-1) › Chapter 7 - INCOME TAXES (§§ 48-7-1 — 48-7-170) › Article 2 - IMPOSITION, RATE, AND COMPUTATION; EXEMPTIONS (§§ 48-7-20 — 48-7-42) › Section 48-7-40.12 - [Effective 1/1/2025] Tax credits for qualified research expenses

(a)
As used in this Code section, the term:
(1)
"Base amount" means the product of a business enterprise's Georgia gross receipts in the current taxable year and the average of the ratios of its aggregate qualified research expenses to Georgia gross receipts for the preceding three taxable years or 0.300, whichever is less; provided, however, that a business enterprise need not have had a positive taxable net income for the preceding three taxable years in order to claim the credit provided in this Code section. For purposes of this paragraph, "Georgia gross receipts" shall be the numerator of the gross receipts factor provided in subsection (d) of Code Section
48-7-31
.
(2)
"Broadcasting" means the transmission or licensing of audio, video, text, or other programming content to the general public, subscribers, or to third parties via radio, television, cable, satellite, or the internet or IP and includes motion picture and sound recording, editing, production, postproduction, and distribution. Such term is limited to establishments classified under the 2007 North American Industry Classification System Codes 515, broadcasting; 519, internet publishing and broadcasting; 517, telecommunications; and 512, motion picture and sound recording industries.
(3)
"Business enterprise" means any business or the headquarters of any such business which is engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, and research and development industries. Such term shall not include retail businesses. Any business or the headquarters of any such business that otherwise meets the definition of a business enterprise shall not be considered a retail business due to the retail activities of any of its affiliate entities, as such term is defined in subsection (a) of Code Section
48-7-42
.
(4)
"Qualified research expenses" means qualified research expenses for any business enterprise as that term is defined in Section 41 of the Internal Revenue Code of 1986, as amended, except that all wages paid and all purchases of services and supplies must be for research conducted within the State of Georgia.
(b)
A tax credit is allowed a business enterprise which has qualified research expenses in Georgia in a taxable year exceeding a base amount, provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended.
(c)
The tax credit provided in subsection (b) of this Code section shall be 10 percent of the excess over the base amount referred to in said subsection.
(d)
Any unused credit claimed under this Code section may be carried forward five years from the close of the taxable year in which the qualified research expenses were made. The credit taken in any one taxable year shall not exceed 50 percent of the business enterprise's remaining Georgia net income tax liability after all other credits have been applied.
(e)
Where the amount of a credit claimed under this Code section exceeds 50 percent of the business enterprise's remaining Georgia net income tax liability after all other credits have been applied in a taxable year, the excess may be taken as a credit against such taxpayer's quarterly or monthly payment under Code Section
48-7-103
. Each employee whose employer receives credit against such taxpayer's quarterly or monthly payment under Code Section
48-7-103
shall receive a 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.
(f)
Any credit earned under this Code section in any taxable year beginning before January 1, 2012, and any credit carryforward attributable thereto, shall be governed by this Code section as in effect for the taxable year in which such credit was earned, including, but not limited to, when determining whether such credit or any credit carryforward may be taken as a credit against the taxpayer's quarterly or monthly payments under Code Section
48-7-103
.
Amended by 2024 Ga. Laws 701,§ 5, eff. 7/1/2024.
Amended by 2024 Ga. Laws 598,§ 1-23, 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,§ 7-1, eff. 7/1/2021.
Amended by 2013 Ga. Laws 8,§ 3, eff. 3/5/2013.
Amended by 2012 Ga. Laws 767,§ 3, eff. 5/3/2012.
Amended by 2009 Ga. Laws 129,§ 4, eff. 5/4/2009.
Amended by 2008 Ga. Laws 730,§ 3, eff. 5/14/2008.
See 2013 Ga. Laws 8, § 7.
See 2012 Ga. Laws 767, § 7.
This section is set out more than once due to postponed, multiple, or conflicting amendments.