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 48-7-40.7 - [Effective 1/1/2025] Optional tax credits for existing manufacturing and telecommunications facilities in tier 1 counties

(a)
As used in this Code section, the term:
(1)
"Machinery and equipment" means all tangible personal property used, directly or indirectly, to move, sort, store, prepare, convert, process, fabricate, or manufacture products.
(2)
"Product" means a marketable product or component of a product which has an economic value to the wholesale or retail consumer and is ready to be used without further alteration of its form or a product or material which is marketed as a prepared material or is a component in the manufacturing and assembly of other finished products.
(3)
"Qualified investment property" means all real and personal property purchased or acquired by a taxpayer for use in the construction of an additional manufacturing or telecommunications facility to be located in this state or the expansion of an existing manufacturing or telecommunications facility located in this state, including, but not limited to, amounts expended on land acquisition, improvements, buildings, building improvements, and machinery and equipment to be used exclusively in the manufacturing or telecommunications facility. The department shall promulgate rules defining eligible manufacturing facilities, telecommunications facilities, and qualified investment property pursuant to this paragraph.
(b)
In the case of a taxpayer which has operated for the immediately preceding three years an existing manufacturing or telecommunications facility or manufacturing or telecommunications support facility and which first places in service during a taxable year qualified investment property in this state in a tier 1 county designated pursuant to Code Section
48-7-40
, there shall be allowed an optional credit against the tax imposed under this article for the ensuing five taxable years following the taxable year the qualified investment property was first placed in service, provided that such qualified investment property remains in service. Such optional credit shall be at the irrevocable election of the taxpayer and shall be in lieu of the credit under Code Section
48-7-40.2
. No taxpayer who claims the credit under Code Section
48-7-40.2
for any taxable year for a given project shall be eligible to receive the credit under this Code section with respect to the same project for any taxable year. The aggregate amount of the credit allowed under this Code section shall equal 10 percent of the cost of all qualified investment property purchased or acquired by the taxpayer and first placed in service during a taxable year. The annual amount of such credit shall be computed as follows:
(1)
The taxable year in which such qualified investment property is first placed in service shall be the base year for purposes of calculating the credit provided for by this Code section;
(2)
The amount of tax owed by the taxpayer for the base year and for each of the two immediately preceding taxable years shall be determined without regard to any credits and shall be added together and divided by three. The resulting figure shall be the base year average; and
(3)
The credit available to the taxpayer to apply against the tax liability of any year following the base year but no later than the fifth year shall be the lesser of the following amounts:
(A)
Ninety percent of the excess of the tax of the applicable year determined without regard to any credits over the base year average; or
(B)
The excess of the aggregate amount of the credit allowed for the qualified investment property over the sum of the amounts of credit already used in the years following the base year.
(c)
The credit granted under subsection (b) 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 qualified investment property must be first placed in service no sooner than January 1, 1996. The credit may only be taken with respect to qualified investment property having an aggregate cost in excess of $5 million. For every 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 project;
(B)
The amount of qualified investment property placed in service during the taxable year;
(C)
The base year average calculated under paragraph (2) of subsection (b) of this Code section;
(D)
The tax owed by the taxpayer for the current taxable year determined without regard to any credits;
(E)
The amount of the unused credit available at the end of the prior tax year;
(F)
The amount of tax credit utilized by the taxpayer in the current taxable year; and
(G)
The amount of tax credit remaining for subsequent tax years;
(2)
In the initial year in which the taxpayer claims the credit granted in subsection (b) 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 project includes the placing in service of qualified investment property having an aggregate cost in excess of $5 million;
(3)
Any lease for a period of five years or longer of any real or personal property used in a new or expanded manufacturing or telecommunications facility which would otherwise constitute qualified investment property shall be treated as the purchase or acquisition of qualified investment property by the lessee. The taxpayer may treat the full value of the leased property as qualified investment property in the taxable year in which the lease becomes binding on the lessor and the taxpayer if all other conditions of this subsection have been met; and
(4)
The utilization of the credit granted in subsection (b) 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.
(d)
No taxpayer shall be authorized to claim on a tax return for a given project the credit provided for in this Code section if such taxpayer claims on such tax return any of the credits authorized under Code Section
48-7-40
or
48-7-40.1
.
Amended by 2024 Ga. Laws 598,§ 1-20, eff. 1/1/2025, app. only to unused tax credits generated during taxable years beginning on or after 1/1/2025.
This section is set out more than once due to postponed, multiple, or conflicting amendments.