Compilation of Rules and Regulations of the State of Georgia › Department 110 - RULES OF GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS › Chapter 110-9 - JOB TAX CREDIT PROGRAM › Subject 110-9-1 - JOB TAX CREDIT PROGRAM REGULATIONS › Rule 110-9-1-.01 - Introduction and Definitions

Current through Rules and Regulations filed through June 27, 2024
(1)
Authority for Regulations.
O.C.G.A. §
									48-7-40, §
									48-7-40.1, §
									48-7-40.23, and §
									36-62-5.1.
(2)
Administrative Agencies.
The
				Georgia Department of Community Affairs (DCA) and the Georgia Department of
				Revenue have been designated as the responsible agencies within the State of
				Georgia to administer the Job Tax Credit Program for less developed
				areas.
(3)
Program
				Purpose.
The purpose of the Job Tax Credit Program is to encourage the
				further economic development of the state.
(4)
Program Objective.
The Job
				Tax Credit Program is designed to encourage businesses to locate and expand in
				the state.
(5)
Program
				Description.
The Job Tax Credit Program provides tax credits under
				O.C.G.A. §
									48-7-2 for certain business
				enterprises that create and retain jobs in areas designated as less developed.
				A minimum number of new full-time employee jobs must be created before any
				credit may be received.
(6)
Definitions.
(a) Less Developed Areas
				-- means certain counties and certain census tract areas that meet applicable
				requirements in law and regulation. Less developed census tract areas mean
				areas in this state which are composed of 10 or more contiguous census tracts,
				each of whom is equal to or worse than the benchmark county based on a
				calculation of the following economic indicators: highest unemployment rate;
				lowest per capita income; and highest percentage of residents whose income is
				below the poverty level. Comparisons between census tracts and the benchmark
				county will be based on data from the Department of Labor and the United States
				Department of Commerce.
(b)
				Business Enterprise -- means any corporation, partnership, limited liability
				company, or sole proprietorship, or the headquarters of any such corporation,
				partnership, limited liability company, or sole proprietorship, which is
				engaged in manufacturing, warehousing and distribution, processing,
				telecommunications, broadcasting, research and development, or tourism in a
				less developed area. Such term does not include retail businesses. The
				definition of Business Enterprise under the county tier program in O.C.G.A. §
										48-7-40 shall also include any
				business which is engaged in services for the elderly and persons with
				disabilities. For the purpose of determining which businesses are engaged in
				the qualifying activities, classifications will be made for individual
				establishments defined pursuant to Department Rule
				110-9-1-.01(6)(d)
				using the latest published North American Industry Classification System (NAICS
				Code), United States, with the business being eligible for the tax credit based
				on the individual establishment. If the NAICS Code cannot be clearly defined,
				the business may request a determination as outlined in Department Rule
				110-9-1-.03(11).
1) Manufacturing means those establishments
				classified by the NAICS Code that belong to Sectors 31-33.
2) Warehousing and distribution means a
				warehouse, facility, structure, or enclosed area which is used primarily for
				the storage, shipment, preparation for shipment, or any combination of such
				activities, of goods, wares, merchandise, raw materials, or other tangible
				personal property, and those establishments classified by the NAICS Codes that
				belong to Subsectors 423, 424 and 493. In addition, establishments primarily
				engaged in scheduled freight air transportation, and included in NAICS Code
				481112; establishments primarily engaged in nonscheduled chartered freight air
				transportation, and included in NAICS Code 481212; establishments primarily
				engaged in line-haul railroads; establishments primarily engaged in short line
				railroads, and included in NAICS Code 482112; establishments which are
				primarily engaged in deep sea freight transportation, and included in NAICS
				Code 483111; 483211, establishments primarily engaged in inland water freight
				transportation; establishments classified by the NAICS Codes that belong to
				Industry Group 4841; 484220, establishments engaged in specialized freight
				(except used goods) trucking, local; 484230, establishments in specialized
				freight (except used goods) trucking, long-distance; 485111, establishments
				engaged in mixed mode transit systems; 486110, establishments primarily engaged
				in pipeline transportation of crude oil; 486210, establishments primarily
				engaged in pipeline transportation of natural gas; 486910, establishments
				primarily engaged in pipeline transportation of refined petroleum products;
				486990, establishments engaged in all other pipeline transportation; 488320,
				establishments which are primarily engaged in marine cargo and handling; 488510
				establishments primarily engaged in freight transportation arrangement are
				included. In addition, NAICS Code 541611 is eligible, but only as it associates
				to establishments that provide consulting services to clients relating to the
				physical distribution of goods and services.
3) Processing includes, without limitation,
				(a) manufacturing establishments classified in NAICS Sectors 31-33 and
				processing establishments classified in NAICS Sector 21; and (b) those
				establishments primarily engaged in providing data processing services, and
				further means only the following establishments in addition to Sectors 31-33 of
				the NAICS Code: establishments that are both primarily engaged in pharmacy
				benefits management and other third-party administration of insurance and
				pension funds, and included in NAICS Code 524292; establishments that are both
				primarily engaged in providing automated clearinghouses, check clearinghouse
				associations, and included in NAICS Code 522320; establishments that are both
				primarily engaged in furnishing physical or electronic marketplaces for the
				purpose of facilitating the buying and selling of stocks, stock options, bonds
				or commodity contracts and included in NAICS Code 523210; establishments that
				are both primarily engaged in providing computer systems design and related
				services, and included in NAICS Industry Group 5415; establishments that are
				both primarily engaged in producing and distributing computer software, and
				included in NAICS Code or 513210; establishments that are both primarily
				engaged in providing data processing services, and included in NAICS Code
				518210; establishments that are both primarily engaged in providing payroll
				services, and included in NAICS Code 541214; establishments that are both
				primarily engaged in providing financial transaction or credit card processing
				services, and included in NAICS Code 522320; establishments that are both
				primarily engaged in testing laboratories and services and included in NAICS
				Code 54138; establishments that are both primarily engaged in Medical and
				Diagnostic Laboratories, and included in NAICS Industry Group 6215.
4) Telecommunications means those
				establishments that are primarily engaged in operating, maintaining and/or
				providing access to facilities for the transmission of voice, data, text, sound
				and video and classified within NAICS Codes 514111, 517111, 517112, and 517810;
				and establishments that are both primarily engaged in providing telephone call
				center services comprising telephone answering services and telemarketing
				bureaus and other contact centers, and included in NAICS Industry Code 56142;
				with the exception of telecommunication resellers and agents
5) 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 Internet Protocol and includes motion picture and
				sound recording, editing, production, postproduction, and distribution, and is
				limited to those establishments that are primarily engaged in broadcasting and
				included in NAICS Subsector 516; establishments that are primarily engaged in
				Internet publishing and broadcasting and included in NAICS Subsector 519;
				establishments that are primarily engaged in telecommunications and included in
				NAICS Subsector 517 with the exception of telecommunication resellers and
				agents; and establishments that are primarily engaged in motion picture and
				sound recording industries and included in NAICS Subsector 512.
6) Research and development means only the
				following establishments: establishments primarily engaged in conducting
				research and experimental development in the physical, engineering and life
				sciences and classified in NAICS Industries 54171; establishments primarily
				engaged in conducting research and analyses in cognitive development,
				sociology, psychology, language, behavior, economic, and other social science
				and humanities research and classified in NAICS Code 541720; and establishments
				primarily engaged in space research and technology and included in NAICS
				Subsector 927.
7) Tourism means
				only the following establishments: establishments that are both primarily
				engaged in providing lodging for the public, and included in NAICS Industry
				Group 7211, provided that establishments offering lodging for more than 30
				consecutive days to the same customer shall not qualify for a tax credit under
				this provision; establishments that are both primarily engaged in providing
				overnight or short term sites for recreational vehicles, trailers, campers or
				tents, and included in NAICS Code 721211, provided that establishments
				primarily engaged in the operation of residential trailer parks or primarily
				engaged in providing accommodations for more than 30 consecutive days to the
				same customer shall not qualify for a tax credit under this provision;
				establishments that are both primarily engaged in the operation of convention
				centers, and included in NAICS Code 711310; establishments that are both
				primarily engaged in the operation of sports stadiums or arenas, and included
				in NAICS Code 711310; establishments that are both primarily engaged in the
				operation of recreational camps, and included in NAICS Code 721214, provided
				that establishments primarily engaged in the operation of summer camps shall
				not qualify for a tax credit under this provision; establishments that are both
				primarily engaged in the operation of golf courses open to the general public
				on a contract or fee basis, which are associated with a resort development, and
				included in NAICS Code 713910, provided that establishments primarily engaged
				in the operation of golf courses associated with housing developments shall not
				qualify for a tax credit under this provision; establishments that are both
				primarily engaged in the operation of sports complexes open to the general
				public on a contract or fee basis, and included in NAICS Code 711310;
				establishments that are both primarily engaged in the operation of professional
				or semi-professional sport clubs, and included in NAICS Code 711211, provided
				that for the purposes of this provision professional and semi-professional
				sport clubs include only those clubs which compensate athletes for their
				services as players and such term does not include amateur sport clubs, amateur
				sport leagues, or amateur sport associations; establishments that are both
				primarily engaged in the operation of racing facilities, including drag-strips,
				motorcycle race tracks, auto or stock car race tracks or speedways, and
				included in NAICS Code 711212; establishments that are both primarily engaged
				in the operation of amusement centers, amusement parks, theme parks, or
				amusement piers, and included in NAICS Code 713110; establishments that are
				both primarily engaged in the operation of tours within the State of Georgia,
				and included in NAICS Code 561520; establishments that are both primarily
				engaged in the operation of airplanes, helicopters, buses, trolleys, vans,
				scenic railroads, aerial tramways, or boats for excursion or sightseeing
				purposes within the State of Georgia, and included in NAICS Subsector 487;
				establishments that are both primarily engaged in the operation of hunting
				preserves, trapping preserves, or fishing preserves or lakes which are open to
				the general public on a contract or fee basis for fin fish, shell fish, or
				other marine fishing, which are included in NAICS Codes 114111, 114112, 114119,
				and 114210; and establishments that are both primarily engaged in the operation
				of museums, planetariums, art galleries, botanical gardens, aquariums, or
				zoological gardens, and included in NAICS Subsector 712, provided that
				establishments which derive 50% or more of their gross revenue from the sale of
				goods or merchandise shall not qualify for a tax credit under this
				provision.
8) Services for the
				elderly and persons with disabilities means establishments primarily engaged in
				providing nonresidential social assistance services to improve the quality of
				life for the elderly, persons diagnosed with intellectual and developmental
				disabilities, or persons with disabilities and included in NAICS Code 624120.
				The inclusion of this industry under the Business Enterprise definition is only
				applicable to establishments which qualify for the job tax credit under the
				county tier provision under O.C.G.A. §
											48-7-40 and is not applicable to
				establishments which qualify for the census tract provision under O.C.G.A. §
											48-7-40.1.
(c) Retail Business -- means any
				establishment that is primarily engaged in retailing merchandise and rendering
				services incidental to the sale of merchandise and included in NAICS Sector
				44-45; any establishment that is primarily engaged in providing professional
				services and included in NAICS Industry Groups 5411, 5412 and 5413; and
				establishments that are primarily engaged in banking, savings and lending
				functions and included in NAICS Industry Groups 5211, 5221, 5222, 5231, and
				5239, and NAICS Industries 52231 and 52239.
(d) Establishment -- means an economic unit
				at a single physical location where business is conducted or where services or
				industrial operations are performed. This is specifically where an employee's
				job is performed. Note that if more than one business activity is conducted at
				the establishment then only those jobs engaged in a qualifying activity will be
				eligible. For example, a retail establishment which also has a distribution
				activity serving the southeast will only be eligible for the jobs engaged in
				the qualifying distribution activity and not for any retail jobs.
(e) Benchmark County -- means the county
				according to the most recent data from the Department of Labor and the United
				States Department of Commerce that ranks seventy-first from the bottom county
				on the following factors: highest unemployment rate; lowest per capita income;
				and highest percentage of residents whose income is below the poverty level.
				This county's scores will be the benchmark for determining census tracts that
				are potentially eligible for inclusion in less developed census tract
				areas.
(f) Competitive project --
				means the expansion or location of some or all of a business enterprise's
				operations in this state having significant regional impact where the
				commissioner of economic development certifies that but for some or all of the
				tax incentives provided under O.C.G.A. §
										48-7-40, the business enterprise
				would have located or expanded outside this state. Businesses claiming the tax
				credit under this provision must provide certification from the commissioner of
				economic development when claiming such credit on the Georgia Corporation
				Income Tax return.
(g) New
				Full-Time Employee Job (also "New Job") -- means a newly created position of
				employment by a Georgia employer, requires a minimum of 35 hours worked each
				week, and pays at or above the average wage earned in the county with the
				lowest average wage in the most recently available annual issue of the Georgia
				Employment and Wages Averages Report of the Department of Labor, but does not
				mean a job classified for federal tax purposes as an independent contractor.
				This determination occurs when a new or expanded operation is first staffed and
				does not include staff replacement or transfer.
1) Part-time jobs that become full-time jobs
				shall be considered new full-time employee jobs for the purposes of the Job Tax
				Credit Program. Part-time jobs may not be aggregated to establish full-time
				equivalents for the purposes of the Job Tax Credit Program.
2) Leased employees will, for the purposes of
				the Job Tax Credit Program, be considered employees of the company using the
				services of the leased employees. Leased employees and other employees may be
				counted toward new job totals for purposes of determining a business
				enterprise's job tax credit when such employees otherwise meet the definition
				of full-time job contained herein. Leased employees and other employees that do
				not meet the definition of full- time job contained herein may not be counted
				toward job totals. (Note that only the business enterprise using the services
				of leased employees may claim credit for such employees so long as the business
				enterprise retains control of the business location and does not delegate such
				control to the leasing company.)
3)
				Special circumstances affecting the ability for employees to count new
				full-time employee jobs include the following:
(i) When a business purchases or leases
				existing assets and uses those assets for a substantially different process
				than their immediate prior use, the rule does not apply, and no approval is
				required from the commissioner of community affairs.
(ii) When a seasonal business purchases or
				leases existing assets, the assets must have been out of service for one year
				or longer unless otherwise approved by the commissioner of community
				affairs.
(iii) Any time a business
				is uncertain whether or not new jobs have been created based on this paragraph,
				the business shall seek a ruling from the commissioner of community affairs
				before claiming any credits.
(h) Headquarters -- means the global or
				national administrative offices of a business enterprise that is primarily
				engaged in performing management and general administrative functions for such
				business enterprise. If a business has headquarters that provides services to
				business enterprises, such business must derive at least 51 percent of its
				sales from the operations of its business enterprises in order for such
				business's headquarters to be potentially eligible for tax credits under these
				regulations.
(i) Maintained Job --
				means any new full-time employee job continued for all or part of the
				consecutive four-year period after its creation.
(j) Military Zone -- means an area designated
				by the commissioner of community affairs under the provision of O.C.G.A. §
										48-7-40.1(c)(2) 
				or (2.1).
1) For Military Zones designated
				under the provision of O.C.G.A. §
											48-7-40.1(c)(2),
				the designation shall include any "area composed of one or more census tracts
				adjacent to a federal military installation where pervasive poverty is
				evidenced by a fifteen (15) percent poverty rate or greater as reflected in the
				most recent decennial census."
2)
				For Military Zones designated under the provision of O.C.G.A. §
											48-7-40.1(c)(2.1),
				census tracts may be designated by the commissioner of community affairs to
				receive Military Zone designation if the census tract is in a county that
				contains a federal military installation with a garrison of at least 5,000
				federal or military personnel combined, and contains an industrial park that is
				owned and operated by a governmental entity.
3) Any designation made by the commissioner
				of community affairs under O.C.G.A. §
											48-7-40.1(c)(2) 
				or (2.1) shall be made by December 31 of each year.
4) Businesses locating within a designated
				Military Zone must meet all eligibility requirements for the Job Tax Credit
				prior to filing for the credit on the tax return.
(k) Government Owned Industrial Park -- means
				an Industrial Park, that at the time of formation or establishment, was wholly
				owned by one or more units of state, local municipal government, including any
				eligible authority, and which is intended to market, attract, and locate
				private industrial business operations.
(l) Industrial Park -- means an area
				comprised of 25 acres or more of developable land, which has been zoned
				industrial or its equivalent if industrial zoning does not exist within the
				applicable jurisdiction. The area shall also contain readily available water
				and sewer infrastructure on-site or at a minimum, adjacent to the
				site.
(m) Opportunity Zone -- means
				an area designated by the commissioner of community affairs, with the agreement
				of the commissioner of economic development, under the provision of O.C.G.A.
				48-7-40.1(c)(4) 
				and Department Rule 110-24-1. Businesses locating within a designated
				Opportunity Zone must meet all eligibility requirements for the Job Tax Credit
				and have an Opportunity Zone Certification form certified by the local
				Opportunity Zone coordinator and acknowledged by DCA prior to filing the tax
				credit on the corporation income tax return. The completed Certification form
				must be filed with the tax return when claiming the credit.
(n) Prior Year/Base Year -- means the tax
				year immediately prior to Year One.
(o) Replacement Job -- means a job created by
				an employer in Georgia that takes the place of a job that was interrupted due
				to a manmade or natural disaster. Neither the length of the interruption nor
				the location of the replacement job will affect eligibility for the Job Tax
				Credit Program.
(p) To
				Generate/Trigger Credits -- means to meet all requirements in law and
				regulation for the tax credits allowed under O.C.G.A. §
										48-7-2 except for maintenance of
				jobs in all or part of the subsequent four years after their creation. Credits
				are not affected by a county's or census tract area's status once credits have
				been generated.
(q) Transferred Job
				-- means a job that is relocated by a business or related businesses from one
				Georgia establishment to another, or a job that is created by a business or
				related business that is substantially the same as a previously existing job of
				such business or related business at a location in Georgia that has ceased
				operations for six months or less. Because the Job Tax Credit is calculated by
				taxpayer, by county or census tract area, jobs that are relocated from one
				establishment to another within the same county or census tract area by the
				same taxpayer are not considered transferred jobs. If the duties of a
				transferred job are substantially different from those at the former location,
				the business may request in writing that the commissioner of community affairs
				determine whether or not the job is a new job for the purposes of the Job Tax
				Credit Program. Only after the commissioner of community affairs has determined
				that the job is a new job may any credits be earned. Similarly, new jobs that
				are transferred during years one through five from their original location to
				another county or less developed census tract area may not earn credits after
				their transfer unless otherwise approved by the commissioner of community
				affairs.
(r) Telecommuter employee
				job - means a newly created position of employment by a Georgia employer
only
during tax years 2020, 2021 or 2022, requires a minimum
				of 35 hours worked each week at a location that may not necessarily be at the
				establishment location, and pays at or above the average wage earned in the
				county with the lowest average wage in the most recently available annual issue
				of the Georgia Employment and Wages Averages Report of the Department of Labor.
				This does not mean a job classified for federal tax purposes as an independent
				contractor. This does not include staff replacement or transfer. This does not
				include telecommuting from out-of-state. The telecommuting employee must live
				and work in Georgia to qualify for the job tax credit program under this
				definition.
1) Current employees who are
				being counted for the job tax credit program and become telecommuters during
				the COVID-19 crisis during tax years 2020, 2021 or 2022 may continue to be
				counted as a qualified job for purposes of the job tax credit program, as long
				as all of the requirements including wages, hours, and health insurance are
				being met while being a telecommuter.
2) Part-time telecommuter jobs that become
				full-time jobs shall be considered a new full-time telecommuter employee jobs
				for the purposes of the Job Tax Credit Program under this special definition.
				Part-time jobs may not be aggregated to establish full-time equivalents for the
				purposes of the Job Tax Credit Program.
(s) Year One -- means the tax year in which
				sufficient new jobs are created that, meeting the requirements of these
				regulations, entitle a business enterprise to tax credits in years one through
				five after the creation of the new jobs.
(t) Years One Through Five -- means the
				consecutive five-year period in which job tax credits may be allowed for the
				new jobs created in year one as well the subsequent four years in which
				additional new jobs may be created that may also qualify for job tax
				credits.
(u) Auxiliary
				Establishment -- means an establishment primarily engaged in performing
				management or support services for other establishments of the same business.
				Auxiliary establishments will be included in the definition of business
				enterprise only when they are primarily engaged in providing the products or
				services provided by otherwise eligible business enterprises.
(v) Leased Employee -- means an employee of
				an employee leasing company, as defined by the O.C.G.A. §
										34-8-32 paragraph (a). Leased
				employees will, for the purposes of the Job Tax Credit Program, be considered
				employees of the company using the services of the leased employees. Leased
				employees and other employees may be counted toward new job totals for purposes
				of determining a business enterprise's job tax credit when such employees
				otherwise meet the definition of full-time job contained herein. Leased
				employees and other employees that do not meet the definition of full-time job
				contained herein may not be counted toward job totals. Only the business
				enterprise using the services of leased employees may claim credit for such
				employees so long as the business enterprise retains control of the business
				location and does not delegate such control to the leasing company.
(w) Wage -- means the total dollars paid
				(including bonuses, incentive pay, etc.) to the employee (whether hourly or
				salaried) during the year (i.e., income as reported on Form W-2). Wage does not
				mean contributions made by employers on behalf of employees to health
				insurance, retirement, or other benefit programs. This definition is consistent
				with and patterned after the definition of average weekly wages contained in
				the most recent annual
Georgia Employment and Wages Averages
				Report
. The wage requirement must be met each and every year the
				employee/job is being used to calculate the credit in each of the Years
				1-5.