Mayor's Office - Tax Incentives and Credits

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Mayor's Office

Tax Incentives and Credits

Richmond County is currently classified as a Tier 1 county. The counties are ranked each year based on unemployment rates, per capita income, poverty levels, and manufacturing wages. Here are some of the opportunities available to you and your business.

The following information is provided by the Development Authority of Richmond County. Details of these incentives can be found at their website at www.AugustaEDA.com.

JOB TAX CREDITS

Job tax credits are available to a business or to its headquarters engaged in manufacturing, telecommunications, warehouse/distribution, research & development, processing or tourism. Taxpayers may choose between investment or job tax credits.

In the State of Georgia, all counties are listed as Tier 1, 2, 3 or 4 counties, with Tier 1 counties receiving the most job tax credits. Augusta-Richmond County is a Tier 1 county. Job tax credits for Augusta-Richmond County amounts to $4,000 per job each year for 5 years.

Job tax credits in Augusta-Richmond County (Tier 1) can be used against 100% of income tax liability. The excess over 100% is credited to Georgia withholding tax (with a limitation of $3,500 per job) in Tier 1 counties only. Unused job tax credits may be carried forward ten years. In some cases, the unused job tax credits may be used toward employee withholding.

INVESTMENT TAX CREDITS

Investment tax credits range from 8% to 5% of qualified capital investment in Augusta-Richmond County. Investment tax credits are available to an existing manufacturing or telecommunications business that has operated a facility in Augusta-Richmond County for three years prior to the investment and invests $50,000 or more. Higher level credits of 8% are available for investment in recycled equipment, pollution control equipment, and for the conversion of a defense plant to manufacturing of a new product. The recycle, pollution control, and defense conversion options are available only for manufacturing plants. Taxpayers must choose either the investment tax credit or the job tax credit.

Investment tax credits can be used against 50% of income tax liability in a given year. Unused credits may be carried forward 10 years.

RETRAINING TAX CREDITS

The retraining tax credit is one-half the employer's approved direct retraining cost up to $500 per employee. The credit is available to all business categories. Before a taxpayer applies for the credits, its retraining program must be approved by the Georgia Department of Technical & Adult Education. The retraining program must be for new equipment, a new technology, or a new operating system.

The retraining tax credit can be used against 50% of taxpayer's income tax liability in a given year to reduce or eliminate Georgia income tax liability. Unused credits can be carried forward 10 years. These credits can be combined with other tax credits.

CORPORATE HEADQUARTERS TAX CREDIT

Companies establishing or relocating their North American or International corporate headquarters [principal central administrative offices] in Augusta-Richmond County are eligible to receive an income tax credit of $5,000 per job per year for five years if the new jobs pay twice the county average wage rate. A $2,500 tax credit is available if the wages are greater than the county average.

The tax credit is available to taxpayers that (1) establish or relocate their headquarters and the headquarters of a subsidiary in Augusta-Richmond County, (2) create 50 or more jobs, (3) invest $1 million, and (4) pay wages that exceed the county average wage rate. Headquarters taxpayer cannot take the job or investment tax credit.

The headquarters tax credit can be used against 100% of tax liability regardless of where the taxpayer locates the headquarters. Credits not applied to income tax liability may be used to reduce withholding tax. Companies establishing or relocating their headquarters to Augusta-Richmond County may be eligible for a tax credit if the headquarters is defined as the principal central administrative offices of a company. New jobs created at the new headquarters must be full-time and must pay above the average wage.

PORT JOB TAX CREDIT BONUS

The port tax credit is a $1,250 per job bonus for taxpayers with large increases in shipments into and out of a Georgia port. The $1,250 is added to the job tax credit [above].

RESEARCH AND DEVELOPMENT TAX CREDIT

The R&D tax credit equals up to 10 percent of the additional R&D expense over a base amount. The base is computed from the previous three years' taxable income and research expenses.

R&D tax credits are available to a business engaged in one of the categories to which the jobs tax credit is available (manufacturing, telecommunications, etc.). Taxpayer must have positive net income for the previous three years.

R&D tax credits can be used against 50 percent of the remaining income tax liability after all other credits have been applied in a given year. Unused R&D tax credits may be carried forward 10 years. These credits can be added to other tax credits.

The R&D base is the taxpayer's Georgia taxable net income in the current year multiplied by either (a) the average of the ratios of its qualified research expense to taxable net income for the preceding three taxable years, or (b) 30 percent, whichever is less.

CHILD CARE TAX CREDIT

Child care credits range from 100 percent to 75 percent of costs. Employers who purchase or build qualified child care facilities are eligible to receive Georgia income tax credits equal to 100 percent of the cost of construction. Employers who provide or sponsor child care for employees are eligible for a credit against Georgia income tax equal to 75 percent of employers' direct costs. The credits are available to all businesses in the state. The child care program must be licensed by the state.

All child care credits can be used against 50 percent of taxpayer's income tax liability in a given year. Unused child care credits from the purchase or construction of a child care facility can be carried forward three years. The credit can be used for the cost of construction over 10 years [10 percent each year]. Credits that are related to the operating cost of the facility may be carried forward five years.

SMALL BUSINESS FAST GROWTH TAX CREDIT

Georgia income tax credits are available to a small business in Augusta-Richmond County having Georgia net taxable income growth of 20 percent or more each year for three consecutive years. The credit in year 3 is the difference in the net taxable income of year 3 and year 2. Eligible companies include the same categories that can receive the job tax credit on page 1 except for retail businesses.

The small business credit can be used against 50 percent of the remaining Georgia income tax liability after all other credits have been applied in a given year. There is no carry forward provision. This process can continue until the taxpayer's Georgia income tax liability exceeds $1.5 million, at which time the taxpayer would no longer be considered a small business. This credit may be combined with other tax credits.

SALES TAX EXEMPTIONS

Manufacturing production machinery is exempt from state and local sales tax, as well as machinery or components bought to upgrade or replace existing machinery; additionally, the exemption covers the re-manufacturing of aircraft engines and components.

The concept of exempting production machinery has been extended to warehouses and distribution centers; their primary material handling equipment is exempt from sales tax if the company invests $5 million or more in a new or expanded facility. Computer equipment that is purchased or leased for use at the facilities of a high technology company is exempt when the total amount of the purchase (or lease) value exceeds $15 million.

Machinery, equipment and materials purchased and used in a clean room of Class 100 or less are exempt. Electricity interacting directly with a manufactured product is exempt if the total cost of the electricity is more than half the cost of all materials used (including electricity) in making the product.

ONE GEORGIA AUTHORITY

The OneGeorgia Authority is a statewide financial tool to help bridge the economic divide in Georgia. The Authority channels one third of the state's tobacco settlement to economic development projects. Flexible assistance will be provided in the form of loans and grants to support local and regional economic development strategies. While the authority will support traditional economic development projects, it will also support innovative solutions to local and regional challenges. $1.6 billion is anticipated to be available over the 25-year term of the tobacco settlement. Augusta-Richmond County is eligible for OneGeorgia Funds through the Development Authority of Richmond County.

HIGH QUALITY TRAINING AT NO COST

Georgia provides employers with free employee recruiting, screening, and training. Quick Start is an innovative on-site training program custom-designed to meet the needs of each company prior to plant start-up. Intellectual Capital Partnership Program (ICAPP). ICAPP is a program of four year and advanced degrees, as well as advanced education in specific courses.

INDUSTRIAL REVENUE BOND FINANCING

Tax-exempt and taxable Industrial Revenue Bond (IRB) financing is available through the Development Authority of Richmond County. Benefits include lower rates and longer terms, either for small or large manufacturing projects.

Contact:
Development Authority of Richmond County
(706) 821-1321
wsprouse@AugustaEDA.com
www.AugustaEDA.com