Bill Text: GA HB438 | 2009-2010 | Regular Session | Comm Sub
Bill Title: Income tax; tax credits for qualified jobs and projects; comprehensive revision; provide
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2009-05-05 - Effective Date [HB438 Detail]
Download: Georgia-2009-HB438-Comm_Sub.html
09 LC 35
1500S
The
Senate Finance Committee offered the following substitute to HB
438:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia
Annotated, relating to imposition, rate, computation, and exemptions regarding
income tax, so as to provide for the comprehensive revision of the income tax
credits for qualified jobs, investment, investment property, and projects; to
provide for procedures, conditions, and limitations; to provide for an effective
date; to provide for applicability; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to imposition, rate, computation, and exemptions regarding income tax is amended
by revising Code Section 48-7-40.24, relating to income tax credits for
qualified jobs, investment, investment property, and projects, to read as
follows:
"48-7-40.24.
(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
enterprise or
organization, whether corporation, partnership, limited liability company,
proprietorship, association, trust, business trust, real estate trust, or other
form of organization which is registered and authorized to use the federal
employment verification system known as 'E-Verify' or any successor federal
employment verification system and is engaged in or carrying on any business
activities within this state, except that
such term shall not include retail
businesses.
(2)
'Eligible full-time employee' means an individual holding a full-time employee
job created by a qualified project
who:
(A)
Possesses a valid Georgia driver's license or identification card issued by the
Georgia Department of Driver Services; or
(B)
Submits a notarized affidavit swearing to be a United States citizen or lawfully
present alien authorized to work in the United
States.
(3)
'Force majeure' means any:
(A)
Explosions, implosions, fires, 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
or
sites 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.
(4)
'Full-time employee job' and 'full-time job' means employment of an individual
which:
(A)
Is located in this state at the site
or
sites of a qualified project or the
manufacturing
facility or
facilities resulting
therefrom;
(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 job tax 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.
(5)
'Investment
requirement' means the requirement that by the close of the sixth taxable year
following the withholding start-date a minimum of $450 million in qualified
investment property will have been purchased or acquired by the business
enterprise to be used with respect to a qualified project.
(6)
'Job creation requirement' means the requirement that no later than the close of
the sixth taxable year following the withholding
start-date
start
date, the business enterprise will have a
minimum of 1,800 eligible full-time employees.
(7)(6)
'Job maintenance requirement' means the requirement that, with respect to each
year in the recapture period, the monthly average number of eligible full-time
employees employed by the business enterprise, determined as prescribed by
subsection (l) of this Code section, must equal or exceed 1,800.
(7)
'Payroll maintenance requirement' means the requirement that, with respect to
each year in the recapture period, the total annual Georgia W-2 reported payroll
with respect to a qualified project must equal or exceed $150
million.
(8)
'Payroll requirement' means the requirement that no later than the close of the
sixth taxable year following the withholding start date, the business enterprise
will have a minimum of $150 million in total annual Georgia W-2 reported payroll
with respect to a qualified project.
(8)(9)
'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
any personal
property to be used in the
manufacturing
facility or
facilities.
(10)
'Qualified investment property requirement' means the requirement that by the
close of the sixth taxable year following the withholding start date a minimum
of $450 million in qualified investment property will have been purchased or
acquired by the business enterprise to be used with respect to a qualified
project.
(9)(11)
'Qualified project' means
a project
which meets the job creation requirement and either the payroll requirement or
qualified investment property requirement. If the taxpayer selects the qualified
investment property requirement as one of the conditions for its project, the
property shall involve the construction of one or more new
facilities
the
construction of a new manufacturing
facility in this state or the expansion of
an
one or
more existing
manufacturing
facility
facilities
in this state. For purposes of this paragraph, the term
'manufacturing
facility
facilities'
means all
facilities comprising a single
facility,
including contiguous
project,
including noncontiguous 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
personal
property that is used in the facility or
facilities.
(10)(12)
'Recapture period' means the period of five consecutive taxable years that
commences after the first taxable year in which a business enterprise has
satisfied
both the
investment requirement and the job
creation requirement
and either the
payroll requirement or the qualified investment property requirement, as
selected by the taxpayer.
(11)(13)
'Withholding
start-date
start
date' means the date on which the business
enterprise begins to withhold Georgia income tax from the wages of its employees
located at the site
or
sites of a qualified project.
(b)
A business enterprise that is planning a qualified project shall be allowed to
take the job tax 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 and the expected withholding
start-date
start
date;
(B)
Certifies that such project will meet the
investment
job
creation requirement and
the job
creation
either the
payroll requirement or the qualified investment
property requirement prescribed by this
Code section; and
(C)
Certifies that during the recapture period applicable to such project the
business enterprise will meet the job maintenance requirement
and, if
applicable, the payroll maintenance
requirement prescribed by this Code
section;
(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
or expanded
facility or
expansion
facilities
will have a significant beneficial economic effect on the region for which
it
is
they
are 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
employment
and
job creation
requirement and either the payroll requirement or qualified
investment
requirements
property
requirement, as applicable, 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 project will create new full-time employee jobs with average wages that are,
as determined by the 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 or expanded
manufacturing
facility or
facilities 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 tax
credit for taxes imposed under this article equal to $5,250.00 annually per new
eligible full-time employee job for five years beginning with the year in which
such job is created through year five after such creation; provided, however,
that 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. For any one taxable year the amounts taken
as a credit against taxes imposed under this article and against the business
enterprise's quarterly or monthly payments under Code Section 48-7-103 may not
in the aggregate exceed $5,250.00 per eligible full-time employee job. Each
employee whose employer receives credit against such business enterprise'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. To
qualify for a credit under this subsection, the employer must make health
insurance coverage available to the employee filling the new full-time job;
provided, however, that nothing in this subsection shall be construed to require
the employer to pay for all or any part of health insurance coverage for such an
employee in order to claim the credit provided for in this subsection if such
employer does not pay for all or any part of health insurance coverage for other
employees.
(e)
The number of new full-time jobs to which this Code section shall be applicable
shall be determined
each month
by comparing the number of full-time employees subject to Georgia income tax
withholding as of the last payroll period of such month or as the payroll period
during each month used for the purpose of reports to the Department of Labor
with the number of such employees for the previous
month
by comparing
the monthly average number of eligible full-time employees subject to Georgia
income tax withholding for the taxable year with the corresponding period for
the prior taxable year.
(f)
The sale, merger, acquisition, or bankruptcy of any business enterprise shall
not create new eligibility in any succeeding business entity, but any unused job
tax credit may be transferred and continued by any transferee of the business
enterprise.
(g)
To qualify for the credit provided by this Code section a new full-time job must
be created by the close of the seventh taxable year following the business
enterprise's withholding
start-date
start
date. In no event may a credit be claimed
under this Code section for more than 3,300 new full-time employee jobs created
by any one project; provided, however, that the taxpayer may claim the credits
provided by Code Sections 48-7-40 and 48-7-40.1 for any such additional jobs if
the taxpayer meets the terms and conditions thereof.
(h)
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 taxable year in which the qualified job was
established.
(i)
Except as provided in subsection (g) of this Code section, a taxpayer who is
entitled to and takes credits provided by this Code section
with
respect to
for
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, 48-7-40.11, 48-7-40.15, 48-7-40.17,
or 48-7-40.18
with
respect to
for
jobs, investments, child care, or ground-water usage shifts created by, arising
from, related to, or connected in any way with the same project.
Provided such
taxpayer otherwise qualifies, such
Such
taxpayer may take any credit authorized by Code Section 48-7-40.5 for the costs
of retraining an employee located at the site
or
sites of such project or the
manufacturing
facility or
facilities resulting therefrom, but only
with
respect to
for
costs incurred more than five years after the date the
manufacturing
facility or
facilities first
becomes
become
operational.
(j)
Except under those circumstances described in subsection (k) of this Code
section, the taxpayer shall, not more than 60 days after the close of the sixth
taxable year following its withholding
start-date
start
date, file a report with the commissioner
concerning the number of eligible full-time employee jobs created by such
project; the wages of such jobs; the qualified investment property purchased or
acquired by the taxpayer for the project; and any other information that the
commissioner may reasonably require in order to determine whether the taxpayer
has met
both
the job
creation requirement and either the payroll requirement
or the
qualified
investment
property
requirement,
as selected by the taxpayer, for
and job
creation requirement with respect to such
project. If the taxpayer has failed to meet
either
such
any applicable
job creation, payroll, or qualified investment
property requirement, the taxpayer will
forfeit the right to claim any credits provided by this Code section for such
project. A taxpayer that forfeits the right to claim such credits is liable for
all past taxes imposed by this article and all past payments under Code Section
48-7-103 that were foregone by the state as a result of the credits, 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 from the commissioner that
either the
investment requirement or the job creation
any applicable
job creation, payroll, or qualified investment
property requirement was not met, 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. On such amended returns the taxpayer may claim
any credit to which it would have been entitled under this article but for
having taken the credit provided by this Code section.
(k)
If the recapture period applicable to a qualified project begins with or before
the sixth taxable year following the taxpayer's withholding
start-date
start
date, the taxpayer shall, not later than
60 days after the close of the taxable year immediately preceding the recapture
period, file a report with the commissioner concerning the number of eligible
full-time employee jobs created by such project; the wages of such jobs; the
qualified investment property purchased or acquired by the taxpayer for the
project; and any other information that the commissioner may reasonably require
in order to verify that the taxpayer met
both
the job
creation requirement and either the payroll requirement or the
qualified investment
property
requirement
and job
creation requirement in such preceding
year.
(l)
Not more than 60 days after the close of each 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
and, if
applicable, the payroll maintenance
requirement for such year. For purposes
of this subsection, whether such
job
maintenance requirement has been satisfied
shall be determined by comparing the monthly average number of eligible
full-time employees subject to Georgia income tax withholding for the taxable
year with 1,800.
For purposes
of this subsection, whether such payroll maintenance requirement has been
satisfied shall be determined by comparing the total annual Georgia W-2 reported
payroll with respect to a qualified project for the taxable year with $150
million. If the taxpayer has failed to
meet the job maintenance requirement
or payroll
maintenance requirement, or both, for such
year, the taxpayer will forfeit the right to 20 percent of all credits provided
by this Code section for such project. A taxpayer that forfeits such right is
liable for 20 percent of all past taxes imposed by this article and all past
payments under Code Section 48-7-103 that were foregone 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 payroll
maintenance requirement, or both, for such
year, 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.
(m)
A taxpayer who fails to meet the job maintenance requirement
or payroll
maintenance requirement, or both, for any
taxable year within the recapture period 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 (l) of this Code
section. If the commissioner determines that force majeure materially affected
the taxpayer's ability to meet the job maintenance requirement
or payroll
maintenance requirement, or both, for such
year, but that the portion of the year so affected was six months or less,
for purposes
of the job maintenance requirement the
commissioner shall calculate the taxpayer's monthly average number of eligible
full-time employees for purposes of subsection (l) of this Code section by
disregarding the affected months
and for
purposes of the payroll maintenance requirement the commissioner shall annualize
the total Georgia W-2 reported payroll with respect to a qualified project for
the portion of the year not so affected.
If the commissioner determines that the affected portion of the year was more
than six months, the taxable year shall be disregarded in its entirety for
purposes of the job maintenance requirement
or payroll
maintenance requirement, or both, and the
recapture period applicable to the qualified project shall be extended for an
additional year.
(n)
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 subsection (j) or (l) 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 subsection (j) or (l) 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.
(o)
Projects
certified by the panel pursuant to paragraph (2) of subsection (b) of this Code
section before January 1, 2009, shall be governed by this Code section as it was
in effect for the taxable year the project was certified.
(p)
The commissioner shall promulgate any rules and regulations necessary to
implement and administer this Code section."
SECTION
2.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval and shall be applicable to all taxable years
beginning on or after January 1, 2009.
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.