Georgia Continues to Promote Business Growth Through Tax Credits

On Monday, April 14, 2014, Governor Deal signed into law a 2 year extension of state income tax credits for video game companies. The 2 year extension provides for up to $25 million in tax credits for video game developers. The Georgia Industry Investment Act was established in 2008 to support Georgia companies developing games and digital media. The purpose of the incentives is to support the growth of Georgia game developers and assist in the development of a skilled workforce unique to the gaming community.

Film and television companies may receive a tax credit of up to 30% of expenditures on production and post-production of feature films, television series, music videos and commercials, and interactive games and animation, either in a single production or on multiple projects with a minimum spending amount of $500,000. The tax credits are transferable. The newly signed bill will take effect January 1, 2013, and will cap the 30% credit at $25 million for the game industry, while limiting individual video game companies to $5 million.

The video gaming industry tax credit extension is only one of many tax credits available to companies located in or locating to Georgia. Tax credits give Georgia businesses the opportunity to minimize or even eliminate state corporate income tax. They apply to all qualifying companies already located within Georgia or relocating to Georgia. Applicable corporate income tax credits may offset 50% to 100% of a company’s state tax liability as well as payroll withholding liability in a given year.

Some of the most popular incentives include:

  • Jobs Tax Credit — provides up to $4,000 in annual tax savings for each new job created for up to 5 years
  • Quality Jobs Tax Credit — a $2,500 to $5,000 per job tax credit for companies creating at least 50 jobs in a 12-month period with wages 10% or higher above the county average
  • Port Tax Credit Bonus — provides companies that increase imports or exports by at least 10% with an additional bonus tax credit of either $1,250 per job for the Jobs Tax Credit or an adjustment in the Investment Tax Credit
  • Mega Project Tax Credit — allows qualifying companies to take a $5,250 per job, per year tax credit against state corporate income tax or payroll withholding (if an excess exists) for the first 5 years of each new job created
  • Investment Tax Credit — a 1% – 8% corporate income tax liability offset available for qualified upgrade or expansion investments of $50,000 or more made by businesses in the manufacturing or telecommunications industries
  • Optional Investment Tax Credit — credit of 6% – 10% for qualified investment
  • Retraining Tax Credit — up to $500 per full-time trainee available to offset qualifying company investments in retraining employees to use new equipment or learn new skills
  • Research and Development Tax Credit — an offset of up to 50% of net Georgia income tax liability (or against payroll withholding for any excess) for increased research and development expenditures for firms developing new products or services

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