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S.A.L.T. Select Developments: Georgia

Baker Donelson's S.A.L.T. Select Developments will identify important state and local tax developments from Georgia.

State and local taxes impact almost every taxpayer. S.A.L.T developments in any one jurisdiction can be frequent and sometimes confusing. Where multiple jurisdictions are involved, staying current with state and local tax developments can be overwhelming for any taxpayer.

To assist you with staying current on a periodic basis, Baker Donelson's S.A.L.T. Select Developments will identify one or more recent state and local tax developments from Georgia.

November 2023

High-Technology Data Center Equipment Sales Tax Exemption: On October 24, 2023, the Georgia Department of Revenue (Department) issued Notice SUT-2023-02, advising that the Department intended to address a proposed amendment to Rule 560-12-2-.117 involving high-technology data center equipment for purposes of the sales and use tax exemption. The Department in that Notice stated that the amendment to the foregoing Rule will be considered at a hearing on November 28, 2023, and that comments from interested parties must be received by the Department no later than 10:00 a.m. on that same day. It appears that the proposed amendments address issues involving, among others, the counting of new quality jobs created and maintained by the data center owner, as well as addressing extension requests for the required annual report. More information can be found here.

October 2023

Motor Fuel Tax Suspension Extended: On October 6, 2023, Governor Kemp signed Executive Order renewing the suspension of the collection of motor fuel excise tax, such suspension originally beginning on September 13, 2023. This suspension of the motor fuel excise tax is now set to last from September 13, 2023, through November 11, 2023. Information regarding the terms and conditions of this extended suspension can be found here.

September 2023

Motor Fuel Tax Suspension: On September 12, 2023, and in response to the adverse effects of continuing inflation, Governor Kemp signed Executive Order that suspends the collection of motor fuel excise taxes from September 13, 2023, through October 12, 2023. According to information published by the Georgia Department of Revenue (Department), the Executive Order suspends fuels subject to the Georgia motor fuel excise tax under O.C.G.A. Section 48-9-3, including, but not limited to; gasoline, clear diesel, aviation gasoline, liquid propane gas, gasohol, ethanol, liquified natural gas, and compressed natural gas; as well as fuel sold to or used by a contract or common carrier regulated by the United States Surface Transportation Board for use exclusively in the operation of locomotives by such carrier. The Department's published information states that the prepaid local sales tax and other local taxes have not been suspended. The Department's information, which includes access to the Executive Order and addresses various other information about this suspension, can be found here.

August 2023

Exemption for Qualifying Zoological Institutions: The Georgia Department of Revenue (Department) recently published Policy Bulletin SUT-2023-03 addressing the sales and use tax exemption for qualifying zoological institutions. As noted in the Bulletin, from July 1, 2023, until December 31, 2026, or until the aggregate state and local sales and use tax refunded exceeds $800,000, whichever occurs first, the sales or use of tangible personal property used for or in the renovation or expansion of zoological institutions is exempt from state and local sales and use tax subject to various qualifications. The Bulletin then reviews a number of such qualifications for the exemption, such as, what constitutes a qualifying zoological institution, what the qualifying items are, the effective dates of the exemption, and the refund administration procedures. More information can be found here.

July 2023

Proposed Sales Tax Rule Amendment Involving High-Technology Data Center Equipment: On June 9, 2023, the Georgia Department of Revenue (Department) issued Notice SUT-2023-01 entitled Proposal to amend Rule 560-12-2-.117 High-Technology Data Center Equipment. In that Notice, the Department stated that the purpose of the proposed amendment pertains to the sales and use tax exemption for certain high-technology data center equipment at O.C.G.A. Section 48-8-3(68.1). This proposed amendment makes numerous changes to the existing Rule involving the exemption for such equipment, including definitional changes; the scope of the exemption; the minimum investment threshold for the exemption; certificates for the exemption; annual reports; the impact on certain income tax credits; among other changes. More information can be found here.

June 2023

Homestead Assessed Value Reduced: The Georgia Legislature passed, and Governor Kemp signed HB 18 which is a supplemental appropriations bill for the fiscal year ending June 30, 2023. Buried in this bill is a provision that will provide for a one-time reduction in property taxes for homestead owners in fiscal year 2023. The tax relief is accomplished by an $18,000 reduction of the assessed value of homestead property for the year 2023, pursuant to the following steps: (a) following preparation of property tax bills, the local tax official notifies the Georgia Department of Revenue (Department) of the total anticipated revenue if all applicable millage rates were applied to all qualified homesteads, and the local tax officials apply to the Department for this money; (b) the Department issues credits appropriated by the General Assembly to the local taxing authorities, but the credits cannot exceed liability once all applicable homestead exemptions and millage rollbacks have been applied; and (c) appropriation of funds is conditional on local taxing authorities reducing taxpayers' liability and including a notice on each tax bill stating that the reduction comes from the General Assembly. It is noteworthy that the property tax relief does not apply to rental property and is subject to repayment if it is found to benefit the owner of the rental property. More information can be found here.

May 2023

Nontaxable Property Interest Recognized Despite Length of Rental Arrangement: Georgia recognizes a property interest known as a "usufruct." A usufruct is an interest in property that limits the use to a specified purpose, generally subject to limitations and typically of not more than a five-year duration. A usufruct is not subject to ad valorem taxation in Georgia. In contrast, a leasehold estate imposes fewer conditions on use and is a taxable property interest. A commonly used method in Georgia for local governments to grant ad valorem real property tax incentives to attract new businesses is for a conduit development authority to take title to a project and to enter into a rental agreement with a new industry permitting the industry to use the project for a period of years, at the end of which the industry can acquire title to the project in exchange for payment of a nominal sum. In the very recent decision of Joint Development Authority of Jasper County v. McKenzie, Court of Appeals of Georgia, April 28, 2023, a local citizens group attempted to block the determination that a certain project constituted a nontaxable usufruct. In that regard, the Authority is to own title to a truck manufacturing facility, financed by approximately $15 billion in bonds, held by the manufacturer. The parties used a bond validation procedure to validate the structure. In response to the citizen group, the Authority, the manufacturer, and the State argued that the rental arrangement amounted to a usufruct and did not create a taxable property interest. Relying on the restrictions on the use that could be made of the facility, the Appellate Court held that, notwithstanding the rental arrangement had a term which would be greater than five years, the intent of the parties was that the manufacturer had only a usufruct interest, which was not a taxable property interest. More information can be found here.

April 2023

Ad Valorem Tax Relief: On March 16, 2023, Governor Kemp signed into law House Bill 311, which provides for the possibility of tax relief in the form of reduced appraised values for ad valorem tax purposes. With exceptions for particular political jurisdictions, Georgia property tax values are determined by the Tax Assessor's Office on the basis of the value of the parcel on January 1 of the year in question, with opportunities for appeal. HB 311 is admittedly responsive to adverse weather in several counties occurring early in the Legislative Session, which was the occasion of a declaration of disaster area by the appropriate government officials. The Georgia Code, as amended, permits local government officials to grant property tax relief in several ways, including the reduction of the millage rate among affected parcels or flat dollar amounts of reduction. The Act is effective with respect to assessments on or after April 1, 2023, which will permit it to apply to assessments for the year 2023. More information can be found here.

March 2023

Extended Deadline for Taxpayers Impacted by Severe Weather: On February 23, 2023, the Georgia Department of Revenue (Department) published an announcement that certain deadlines for taxpayers have been extended until May 15, 2023, for those taxpayers impacted by severe weather on January 12, 2023. According to this announcement, this extension will impact Georgia taxpayers in Butts, Crisp, Henry, Jasper, Meriwether, Newton, Pike, Spalding, and Troup Counties. Following IRS precedent, the announcement states that individuals who reside in and businesses whose records required for tax compliance are located in the disaster area will receive the extended deadline. Further, the extension applies to return filing, tax payment, and other time-sensitive acts as specified by the IRS. Affected taxpayers who had a valid extension to file their 2021 return that was due to expire on February 15, 2023, will now have until May 15, 2023, to file that return. According to the announcement, the relief also includes quarterly estimated income tax payments due January 26, 2023, and the quarterly payroll and excise tax returns normally due on January 31, 2023, and on April 30, 2023. However, this postponement of time to file and pay does not apply to information returns in the W-2 and 1099 series, nor to certain other return and payment requirements as set forth in the announcement. More information can be found here.

Legislation Authorizing Personal Income Tax Refunds: On March 17, 2023, Governor Brian P. Kemp signed into law HB 162, which grants a personal income tax refund to individual filers. The refund will be $250 for single filers and $500 for joint filers. To be eligible for a refund, taxpayers must have filed returns for both the calendar year 2021 and 2022. The Department of Revenue anticipates that it will begin issuing refunds within six to eight weeks and that the majority of refunds will be issued by July 1, 2023. More information can be found here.

February 2023

Important Income Tax Updates: The Georgia Department of Revenue (Department) recently published information regarding important income tax updates for the 2022 year. As noted in that publication, the Department states that the deadline to file 2022 individual income tax returns, without an extension, is April 18, 2023. The publication also noted that February 1, 2023, is the beginning date for the Department's processing of 2022 individual income tax returns. The publication also provides information important to both individuals and businesses, such as about tax credits, federal tax changes, and other details. More information can be found here.

January 2023

Sales Tax Includes "Safe Rider" Fees: The Georgia Tax Tribunal has issued a decision upholding the position of the Georgia Department of Revenue (Department) holding that a separately stated charge by Uber for transportation services was subject to the Georgia sales tax. The case of Uber Technologies, Inc. v. Robyn A. Crittenden (November 1, 2022) involved the "Safe Rider" fee charged by Uber. This fee is a flat charge for each ride, separate from the service fee charged to drivers, and is a separate line item on the rider's receipt. The Georgia sales tax applies to charges for most transportation services, subject to specific exceptions. The Safe Rider fee was charged beginning in April 2014 and was intended to recover costs for regulatory compliance, insurance, driver background checks, motor vehicle records checks, and safety features in the Uber App. The Georgia Sales Tax Act exempts some components of the charges for transportation services from the tax; however, since the Safe Rider fee could not be fit within any of the exceptions, the Tax Tribunal held those charges to be subject to sales tax. More information can be found here.

October 2022

Temporary Waiver of IRP/IFT Requirements Due to Hurricane Ian: On September 30, 2022, the Georgia Department of Revenue (Department) issued Policy Bulletin MVD-2022-01which stated that due to Hurricane Ian, the Department and its Motor Vehicle Division were waiving certain motor carrier and related requirements. According to that Bulletin, temporary waivers are in effect through 5:00 p.m. October 28, 2022, for motor carriers and individual truck drivers to comply with the requirements associated with the Georgia International Registration Plan and the International Fuel Tax Agreement trip and fuel permits. The Department noted that the Georgia requirements associated with the IRP and the IFTA trip and fuel permits are waived for vehicles providing direct assistance with relief efforts relating to Hurricane Ian. The Department further stated that the waiver shall not be construed to allow any vehicle to operate in Georgia without a valid vehicle registration and insurance as required by the base state, and that carriers are required to maintain compliance with all driver, owner, vehicle and carrier compliance requirements that may fall outside this waiver or with any other rule, statute or requirement. Further, the waiver does not apply to motor carriers or drivers that are currently subject to state and federal out-of-service orders. The waiver automatically terminates at 5:00 p.m. on October 28, 2022, unless renewed by the Department. More information can be found here.

September 2022

Income Tax/Domicile for Tax Liability Purposes: Generally, voting in a jurisdiction, being licensed to drive in a jurisdiction, and claiming the homestead exemption for a residence are indications of being domiciled in that jurisdiction and being subject to income taxes based on residence. In a decision earlier this year, the Georgia Tax Tribunal, in Perkinson V. Robyn A. Crittenden, Commissioner, Docket No. 2116694 & 2118458, found those elements were not dispositive of the issue of domicile for Georgia income tax purposes. Larry Perkinson was an employee of Saudi Aramco working in Saudi Arabia from 2009 until 2019, when he retired. Before 2014, neither Mr. Perkinson nor his wife had any business or financial contact with Georgia. In 2014, Mrs. Perkinson's mother, then living in Texas, began to decline in health. To provide a residence for her closer to family, Larry Perkins and his wife bought a residence in Georgia. The same year, they obtained Georgia driver's licenses and registered to vote in Georgia. They also registered their automobiles in Georgia and had their bank and credit card statements sent to the Georgia address. In 2015, Mrs. Perkinson returned to the United States and began to live in the Georgia residence. Mr. Perkinson continued to live in an apartment in Saudi Arabia until his retirement in 2019 and came to Georgia on his annual leave. The Tax Tribunal noted that Saudi Arabia did not have a path to citizenship for residents at any time. Despite Mr. Perkinson enjoying the tax benefit of the homestead exemption, which is available only to Georgia residents, the Court held that Mr. Perkinson did not form an intent to become a Georgia resident until his retirement in 2019 and thus was not liable for Georgia income taxes until that time. More information can be found here.

August 2022

Proposed Rule Amendments for Qualified Timberland Property Appraisal Manual: The Georgia Department of Revenue (Department) published Notice LGSD-2022-004 on July 22, 2022, proposing to amend Rule 560-11-16.05 and Appendix 560-11-16-A involving the Qualified Timberland Property Appraisal Manual. The Department's synopsis in this Notice stated that the purpose of this amendment is to update the Manual and the table of commercial timberland per acre values by ecological region and soil productivity classification. The Department will consider the proposed amendment to this Rule and Appendix at a remote regulation hearing held at 10:00 a.m. EST on August 30, 2022, which can be accessed through the following link: or via telephone at 1-877-309-2073 (toll-free) and 646-749-3129 (local) with the access code 478-259-845. The Department also stated that all comments regarding this Rule from interested persons must be received no later than 10:00 a.m. on August 30, 2022.

Expansion of Sales Tax Exemption Relative to Certain Sporting Events: In an effort to encourage major sporting events to come to Georgia, admission sales to nonrecurring sporting events in Georgia have for some years been exempt from the sales tax to the extent such events are expected to generate over $50 million in revenue. Expressly included in such exemptions are the Super Bowl; any semifinal or championship game of a national collegiate tournament; or an all-star game of Major League Baseball, Major League Soccer, or the National Basketball Association. The 2022 General Assembly extended that exemption by the passage of Act 757 (H.B. 1034), signed by Governor Kemp on May 2, 2022, so as to apply the exemption to tickets to the World Cup, which at the time of passage was considering Atlanta as one of the host cities in 2026. Atlanta was subsequently designated as one of the host cities. Further, this exemption was scheduled to be automatically repealed on December 31, 2022, but Act 757 also extended that repeal date to December 31, 2031. More information can be found here.

Living Infants and Fairness Equality (LIFE) Act: On August 1, 2022, the Department issued Guidance regarding Georgia House Bill 481, in particular in light of the recent rulings by the U.S. Supreme Court on June 24, 2022, in Dobbs vs. Jackson Women's Health Organization and in light of a ruling on July 20, 2022, by the 11th Circuit Court of Appeals. This Guidance states that the Department will recognize any unborn child with a detectable human heartbeat as eligible for the Georgia individual income tax dependent exemption. Pursuant to this Guidance, on individual income tax returns filed for the tax year 2022 where, at any time on or after July 20, 2022, and through December 31, 2022, a taxpayer has an unborn child (or children) with a detectable human heartbeat (which may occur, according to the Guidance, as early as six weeks' gestation), the taxpayer may claim a dependent personal exemption in the amount of $3,000 for each unborn child. The Guidance stated that additional information, including return instructions to claim the personal exemption for an unborn child with a detectable heartbeat, will be issued later this year, along with other tax changes impacting the tax year 2022 Georgia individual income tax returns. More information can be found here.

June 2022

Consolidated Income Tax Returns Addressed: For purposes of the federal income tax, parent-subsidiary groups of affiliated corporations have long been permitted to file consolidated income tax returns, reporting the income of all corporations as if they were a single corporation. For purposes of the Georgia income tax, however, the Georgia Department of Revenue (Department) has had to approve the filing of a consolidated income tax return. Georgia House Bill 1058 provides that, beginning in 2023, parent-subsidiary groups that file a consolidated IRS Form 1120 may elect to file a consolidated Georgia income tax return without advance approval. The election is irrevocable for five years. Each member of the group is treated as a separate entity for purposes of apportionment of liability for taxes but net operating losses apportionable to Georgia may be shared among the group. It is expected that the Department will promulgate detailed rules interpreting these requirements. As is the case under existing law, brother-sister groups of corporations may not file consolidated returns even though they may file consolidated returns under GAAP. More information can be found here.

Motor Fuel Taxes Suspended: As a result of the passage of Georgia House Bill 302 and Governor Kemp's subsequent Executive Order signed May 26, 2022, the Georgia excise tax on motor fuel (both diesel and gasoline) has been suspended through July 14. Interstate carriers which operate in Georgia are members of the International Fuel Tax Association (IFTA). The Department has clarified the effect of the suspension of the tax on IFTA reporting requirements. Although motor carriers will be able to purchase motor fuel tax-free and travel non-taxable miles in Georgia during the suspension period, they are still required to file IFTA returns for the quarters that include the suspension period. IFTA returns should still reflect the miles per gallon for the suspension period and should include both tax-free and tax-paid miles. More information can be found here.

May 2022

Credit for Historic Preservation Extended: On May 2, 2022, Governor Kemp signed HB 469, which extends the existing historic property rehabilitation income tax credit through 2027. The credit was set to expire in 2022. It is available for repairs and alterations to certain structures certified by the Georgia Department of Community Affairs as meeting the standards of the U.S. Secretary of the Interior's or the Georgia Standards for Rehabilitation as provided by the Georgia Department of Community Affairs. The credit is 25 percent of the certified rehabilitation expenses (with an extra 5 percent for a historic home located in a target area). Various conditions and limitations also apply to the utilization of this credit. More information can be found here.

April 2022

New Income Tax Legislation Provides Refunds to Qualified Taxpayers: The 2022 Georgia General Assembly recently enacted House Bill 1302, (Act 582), which provides for a one-time tax credit for a "qualified taxpayer", meaning an individual taxpayer who filed an individual income tax return for both the 2020 and 2021 taxable years by the due date for filing the income tax return for the 2021 taxable year, including any extensions which have been granted. The term "qualified taxpayer" does not include a nonresident alien individual, an individual who was claimed as a dependent on another taxpayer's federal or Georgia return for the 2020 year, or an estate or trust. Under this Bill, once a qualified taxpayer files an individual income tax return for the tax year 2021, the Georgia Department of Revenue (Department) shall automatically credit such qualified taxpayer with a one-time refund amount equal to the lesser of (a) the qualified taxpayer's 2020 individual income tax liability as properly reported, consistent with this Bill, or (b) an amount which is based on such taxpayer's filing status for the 2020 taxable year, equal to $250 in the case of a single taxpayer or married taxpayer filing a separate return, $375 in the case of a head of household, or $500 in the case of a married couple filing a joint return. The refunds and credits provided shall not, according to the Bill, constitute taxable income for Georgia individual income tax purposes. Other conditions also apply, and the Department may promulgate rules to implement and administer the foregoing. More information can be found here.

Individual Income Tax Rate Reduction: Also during the 2022 Georgia Assembly, House Bill 1437 was passed by both the House and Senate and has been signed by Governor Brian Kemp so as to reduce the individual income tax rates, subject to a delay if certain revenue criteria are not satisfied. If such criteria are satisfied, however, the individual income tax rates would be gradually reduced over several years such that the tax imposed for the year 2025 would be 5.5 percent and for years beginning on or after January 1, 2029, would 4.99 percent. Additionally, the amount of the personal exemption deduction in computing the Georgia taxable income for individuals would be revised such that the exemption for a single taxpayer or head of household would be $12,000; the personal exemption for a married couple filing a joint return would be reduced over several years to different levels, with the deduction being $24,000 for years beginning on or after January 1, 2030; the amount of the exemption for married taxpayers filing separate returns would be half of the amount of the personal exemption allowed for married couples filing a joint return; and a dependent of a taxpayer would be allowed a $3,000 deduction. More information can be found here.

March 2022

Rate Adjustment for Transportation Services Tax: On February 28, 2022, the Georgia Department of Revenue (Department) issued a Transportation Services Tax Bulletin which, effective April 1, 2022, notices the rate for the transportation services tax is being adjusted to reflect the effect of annual inflation or deflation for the cost of living that consumers in Georgia experience on an average during the immediately preceding calendar year. The Department states in this Bulletin effective for April 1, 2022 through March 31, 2023, the transportation services tax as to for-hire ground transport trip is 54 cents per trip, and the tax for shared for-hire ground transport trip is 27 cents per trip. More information can be found here.

February 2022

Interest Rate Annual Adjustment Notice: The Georgia Department of Revenue (Department) recently issued Policy Bulletin ADMIN-2022-01, dated effective January 1, 2022, advising for the calendar year 2022, the annual interest rate will be 6.25 percent, accruing monthly. The Policy Bulletin states Georgia law requires refunds and past due taxes that accrue interest will do so at a rate equal to the bank prime loan rate as posted by the Board of Governors of the Federal Reserve System, plus three percent. The Department noted in the Bulletin that the interest rate of 6.25 percent was also applicable in the calendar year 2021. More information can be found here.

January 2022

Georgia Film Tax Credit – Examples of Vendors Not Qualifying: On December 20, 2021, the Georgia Department of Revenue (Department) issued Informational Bulletin CRED-2013-2-13, revised December 20, 2021, which provides examples of vendors that do not qualify as a Georgia vendor under Revenue Regulation 560-7-8-.45. In this Informational Bulletin, the Department initially reviewed the pertinent parts of Revenue Regulation 560-7-8-.45 and then addressed the issue of a vendor not qualifying as a Georgia vendor under four different examples. In each of these examples, the company is assumed to have a physical location in Georgia with at least one individual working at such location on a regular basis. However, the facts in each example result in the company not being considered as a Georgia vendor for various reasons, such as the company not regularly holding in inventory more than a de minimis amount of inventory of the type ordered by the production company. Separately, the Bulletin also addresses the Georgia real property exception to the Georgia vendor requirements.

October 2021

Proposed Rule Concerning Implementation/Administration of Life Sciences Manufacturing Job Tax Credit: On October 7, 2021, the Georgia Department of Revenue (Department) issued Notice IT-2021-4 setting forth a proposal to adopt Rule 560-7-8-.67 involving the life sciences manufacturing job tax credit. According to this Notice, the Department will consider the adoption of this Rule at a remote regulation hearing to be held on November 10, 2021, and that all comments regarding such Rule from interested persons and parties must be submitted no later than 10:00 am on November 10, 2021. As noted in this proposed Rule, the life sciences manufacturing job tax credit may be used to offset 100 percent of a medical equipment and supplies manufacturer's and pharmaceutical and medicine manufacturer's Georgia income tax liability derived from operations from within Georgia. The proposed Rule sets forth various definitions, provides information regarding the maximum credit amount, the eligibility of the credit, and the conditions and limitations pertinent to the credit, among other information. According to this proposed Rule, this Rule would be effective on July 1, 2021 and shall be applicable to taxable years beginning on or after January 1, 2021.

September 2021

Revenue Leadership Team: On September 2, 2021, the Georgia Department of Revenue (Department) announced an innovative leadership team at the Department to address functional areas of Tax Operations, Agency Operations and Governance & Planning. This leadership team is comprised of the Deputy State Revenue Commissioner and two Assistant Deputy Commissioners. The objective of these new functional areas within the Department is to streamline services for taxpayers, and this new leadership team will apparently be responsible for achieving that objective. More information can be found here.

August 2021

HB 149 as a Federal SALT Limitation Workaround: In November 2020, the IRS issued Notice 2020-75, responsive to the $10,000 limitation on the deductibility of state and local taxes applicable to individuals which was part of the Tax Cuts and Jobs Act of 2017. In the notice, the IRS said that it intended to issue proposed regulations clarifying that state and local income taxes imposed on and paid by a partnership or an S corporation on its income are allowed as a deduction by the partnership or S corporation in computing its non-separately stated taxable income or loss for the taxable year of payment. If, by virtue of state and local legislation, the obligor of the tax is the entity (i.e., a Subchapter S corporation or partnership), this would effectively provide a workaround to the limitation. The tenor of this notice was to validate the workaround acts passed by some states and to invite other states to pass similar legislation.

The Georgia legislature approved, and the Governor signed HB 149, the effect of which is to allow, in limited circumstances, an S corporation or a partnership to make an annual irrevocable election to pay income taxes at the entity level. See May issue here.

The Georgia Department of Revenue apparently believes that HB 149 is directly responsive to the invitation in Notice 2020-75, in that it provides that the annual election makes the entity, and not the partners or shareholders, the taxpayer, thus distinguishing this feature from the otherwise applicable withholding elections.

Sales Tax Extension to Marketplace Innkeepers: In 2020, Georgia adopted amendments to its Sales and Use Tax Act defining "marketplace facilitators" as "dealers" for purposes of requiring so called "click through" merchants who sell through other online merchants to collect and remit sales tax. In 2021, Georgia extended the reach of the Sales and Use Tax Act to booking agents who book rooms for transients. HB 317 adds the term "Marketplace Innkeeper" to the definition of "dealer," thus applying parallel requirements on booking agents. More information can be found here.

July 2021

Proposed Amendment to Manufacturing Sales Tax Rule: On June 11, 2021, the Georgia Department of Revenue (Department) issued Notice SUT 2021-002, which proposes to amend Rule 560-12-2-.62 "Manufacturing Machinery and Equipment, Industrial Materials, and Packaging Supplies." The Department states in this Notice that the proposed amendment will be considered at a remote regulation hearing to be held on July 27, 2021. In the synopsis following the Notice, the Department states that it proposes to amend that Rule by making changes as indicated in the copy attached to the Notice. The copy of the Rule attached to the Notice contains the word "PROPOSED" on each page of the proposed amendment to Rule 560-12-2-.62. The Department also states in the synopsis that the purpose of the proposed amended Rule is to conform the Rule to O.C.G.A. Section 48-8-3.2 as amended in 2021. The Notice states that comments may be submitted to the Department in advance of the hearing. More information can be found here.

June 2021

Legislation Addressing Chevron Deference: Chevron deference is a principle of judicial review in which a federal court yields to an agency's interpretation of a statute or regulation. This principle was developed by the United States Supreme Court in 1984 in the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. However, with respect to tax laws in the State of Georgia, Governor Kemp signed Senate Bill 185 a few months ago which provides in essence that all questions of law decided by a court or by the Georgia Tax Tribunal pursuant Georgia law, including interpretations of constitutional, statutory and regulatory provisions, shall be made without any deference to any determination or interpretation, whether written or unwritten, that may have been made on the matter by the Georgia Department of Revenue (Department), except such requirement shall have no effect on the judicial standard of deference accorded to rules propagated pursuant to the Georgia Administrative Procedure Act. Similar language in this legislation addresses refund claims and related tax matters in Georgia. More information can be found here.

Film Tax Credit/Non-qualifying Vendors: The Department recently issued Informational Bulletin CRED-2013-2-13, revised June 2, 2021, dealing with the Georgia film tax credit (more information as to this credit can be found here). In this revised Informational Bulletin, the Department gives examples of vendors that do not qualify as a Georgia vendor under applicable regulations for purposes of the film tax credit. For instance, one example provides that Company A has an inventory of costumes that it rents and sells to production companies; that a production company places an order for a type of costume that Company A does not regularly hold in its Georgia inventory; that Company A rents/buys the costumes from a company that is not a Georgia vendor in order to fulfill the order from the production company; and, as a result, Company A would not be considered a Georgia vendor for this costume because more than a de minimis amount of this type of costume is not regularly held in their inventory and therefore the amount paid to Company A by the production company for the costume would not qualify as a production expenditure for purposes of the film tax credit. More information can be found here.

Usufruct/Property Tax Litigation Update: Georgia recognizes a property interest, having an origin in the English common law, known as a usufruct. A usufruct, as opposed to a leasehold interest, is an interest in real property pursuant to which the holder is limited to specific uses for the property. Generally, but not always, the term of a usufruct interest is no more than five years. A common example of a usufruct is an apartment lease. The Mercedes stadium, used by the Atlanta Falcons, had been classified by the Fulton Assessor's Office as a usufruct and hence not taxable for ad valorem tax purposes. In Love v. Fulton County Board of Tax Assessors, property owners contended that the Board of Assessors had erred in classifying the interest of the Atlanta Falcons as a usufruct, as opposed to a leasehold. The Georgia Supreme Court on June 1, 2021 sided with the Board in recognizing that the limitations put on the use of the facility were sufficient to justify classifying the property interest as a usufruct. More information can be found here.

May 2021

Entity Level Taxation for Electing S Corporations/Partnerships: Act 164, as signed by Governor Kemp on May 4, 2021, permits Subchapter S corporations and electing partnerships to elect irrevocably to pay tax at the entity level at the rate of 5.75 percent of its net income, in lieu of the shareholders or partners paying tax on the entity's net income. There are various qualifying conditions for this election. Just a few of such conditions are, following such election, neither the entity nor the shareholders/partners are entitled to a deduction on account of the payment and the election has no effect on the basis of the shareholders/partners in their stock/partnership interests in the entity. This new law is effective with respect to taxable years beginning on or after January 1, 2022. More information may be found here.

April 2021

Extension to May 17: On March 19, 2021, the Georgia Department of Revenue (Department) announced, in conformance with the federal extension of the individual income tax return due date, that Georgia is automatically extending the 2020 individual income tax filing and payment deadline from April 15, 2021 to May 17, 2021, without penalties or interest. According to this announcement, this Georgia relief is only for the tax year 2020 individual state income tax payments and state individual income tax returns due on April 15, 2021. Further, individual taxpayers do not need to file forms or call the Department to qualify for this automatic filing and payment extension. Estimated income tax payments due on April 15, 2020 are not included in this extension. Separately, the Department has published various FAQs regarding the 2020 individual income tax filing and payment deadline extension, which can be found here.

Reduction in Individual Income Taxes: On March 22, 2021, Governor Kemp signed legislation passed by the Georgia Legislature increasing the standard deduction for various taxpayers, effective for all taxable years beginning on or after January 1, 2022. More information can be found here.

Unemployment Income Still Taxable: On April 5, 2021, the Department updated its income tax guidance to state that unemployment income remains taxable at the state level and must be included in the taxpayer's income in their Georgia return. The American Rescue Plan Act of 2021, which provides for an exemption at the federal level for certain amounts of unemployment income, was signed into law by President Biden on March 11, 2021. However, Governor Kemp had already signed earlier Georgia legislation updating the state's income tax laws to conform to the Internal Revenue Code as it existed prior to January 1, 2021, so the revisions made by the American Rescue Plan were not included within the confirmation legislation signed by Governor Kemp. As result, Georgia has not yet adopted the tax exemption for any unemployment income. More information can be found here.

March 2021

Updates Reported – The Georgia Department of Revenue is amending the sales and use tax rules dealing with direct pay reporting. The Department considered these amendments at a remote regulation hearing held on March 9, 2021, with such proposed changes addressing definitions as well as substantive provisions within the current Direct Pay Reporting Regulations found at Section 560-12-1-.16 of the Department's Regulations.

Additionally, the Georgia Legislature recently passed legislation (H.B.265), and Governor Kemp signed that legislation on February 24, 2021, updating Georgia's corporate and personal income tax laws so as to conform to the Internal Revenue Code as it existed prior to January 1, 2021. This legislation provides that, for taxable years beginning on or after January 1, 2020, the provisions of the Internal Revenue Code of 1986, as amended, which were as of January 2021, enacted into law but not yet effective, shall become effective for purposes of Georgia taxation on the same dates upon which they become effective for federal tax purposes. Notably, businesses eligible for PPP loan forgiveness would not be required to pay Georgia taxes on such forgiven loans even though included in income; and those businesses can claim tax deductions for appropriate business expenditures using the loan proceeds. This new law is effective for all taxable years beginning on or after January 1, 2020. More information can be found here.

February 2021

Updates Reported – On January 26, 2021, the Georgia Department of Revenue posted General Instructions for third-party audit firms interested in becoming certified eligible auditors for purposes of conducting mandatory film tax credit audits. (For background information, see here for our September 2020 SALT Select Developments addressing the recently revised Georgia firm production credit, which references that the audit requirement would be phased in starting in 2021.) As noted in the General Instructions, production companies may alternatively request either a third-party audit firm to conduct the mandatory audit or request the Department to conduct the audit. A production company requests an audit by completing the application, the link for which is in the General Instructions. Whether the audit is completed by the third-party audit firm or by the Department, the Department will complete the final review and issue the Final Certification Letter. Eligible third-party audit firms are added to the certified list of auditors once they have completed the required training and have been certified by the Department. Third-party audit firms interested in becoming a certified auditor will find a list of qualifications and applications at another link within the General Instructions. Those links within the General Instructions are supposed to be available February 10, 2021. More information can be found here.

January 2021

Updates Reported – On January 5, 2021, the Georgia Department of Revenue announced the interest rate which would apply to interest-bearing refunds and past due taxes for the 2021 calendar year. According to the Department's Policy Bulletin ADMIN-2021-01, the annual interest rate will be 6.25 percent, accruing monthly, for the calendar year 2021. The interest rate for 2020 was 7.75 percent. More information can be found here.

December 2020

Updates Reported – The Georgia Department of Revenue recently held a remote regulation hearing regarding a proposed amendment to a certain substantive Regulation. Specifically, Regulation Section 560-3-2-.26 is being amended so as to add a new Subsection (7)(g) which will provide that any Form 900, Georgia Financial Institutions Business Occupation Tax Return, which is due on or after March 1, 2021, must be filed and the tax be paid through the Department's Georgia Tax Center. This proposal also states that the amendment is necessary so that the Department's systems can more efficiently process the related credit that is allowed against income tax.

November 2020

Updates Reported – On November 10, 2020, the Georgia Department of Revenue issued Policy Bulletin ADMIN-2020-02, which addresses the acceptance of electronic signatures, remote notaries, and electronic filings. As noted in this Policy Bulletin, the Department is clarifying its current regulations on electronic signatures and filings, and authorizing broader acceptance of digital or electronic signatures, electronic filings, and remote notarization for certain documents and forms. The Policy Bulletin specifically states that it does not apply to the Department's Motor Vehicle Division documents and forms. This Policy Bulletin does state that through the Department's regulations, the Department has defined "electronic signature" for purposes of electronic filings of registrations and tax returns. The Department has also laid out guidelines for the acceptance of e-signatures by taxpayers and/or their authorized third-party representatives. The Bulletin further states that e-signatures that comply with the standards set forth in this Bulletin will have the same effect as signatures on a paper tax return or form. The Bulletin sets forth the various acceptable forms of an e-signature, remote notarization, electronic transmission of e-signature documents, among other topics pertaining to e-signatures. More information can be found here.

October 2020

Updates Reported – On October 7, 2020, and so as to provide additional economic assistance during this pandemic, the Georgia Department of Revenue has issued Notice IT-2020-1. That Notice announced a proposal to adopt Rule 560-7-8-.66 which, if promulgated, would provide an additional $1,250 personal protective equipment manufacturer jobs tax credit for qualifying jobs engaged in manufacturing personal protective equipment in Georgia during the taxable year. The credit appears to be applicable to personal protective equipment manufacturers that qualify for the jobs tax credit under O.C.G.A. Section 48-7-40 or 48-7-40.1 and the applicable regulations associated with that credit. This additional jobs tax credit can be used to offset 100 percent of the manufacturer's Georgia income tax liability derived from operations within Georgia. The qualifying activity of manufacturing personal protective equipment shall be determined on a monthly basis, and that manufacturer must compute a monthly average number of jobs engaged in the qualifying activity in this State. Any job that is included in the jobs tax credit calculation where 50 percent or more of the time is spent on such qualifying activities shall be eligible to be included in the total for the month. Examples are given in the proposed Rule with respect to such computations.

If eligible for this additional jobs tax credit, the manufacturer would claim the additional credit by submitting a Form IT-CA with the manufacturer's Georgia income tax return each year the credit is claimed. Any excess credit may be applied against the manufacturer's withholding tax liability under certain circumstances. A carry-forward of unused credit is available for ten years. Special provisions are provided in the Rule for pass-through entities. This proposed Rule, if promulgated, shall be applicable to tax years beginning on or after January 1, 2020, but shall not be allowed for any jobs created on or after January 1, 2025. A hearing on this proposed Rule is scheduled for November 17, 2020. Written comments on this proposed Rule must be sent to the Department as set forth in the Notice.

September 2020

Coronavirus Tax Payment and Return Filing Responsibilities (September 30) - Updates Reported: For some years, Georgia has encouraged film production in that State by allowing a credit against Georgia income taxes of 20 percent of certain expenses incurred in film production within Georgia. If the production company could not use the credit, the credit could be sold to a Georgia taxpayer who could use the credit. This sale typically occurs at a discount from face value. Due to perceived abuses, the Georgia Legislature this year passed, and Governor Kemp signed on August 4, 2020, House Bill 1037, which will narrow the types of expenditures for which credits are available and limit the expenses to those incurred in Georgia. In addition, the Bill will require that all expenses for which a credit is available be audited. The audit requirement would be phased in starting in 2021. For 2021, the audit requirement will apply to projects for which the credit sought exceeds $2.5 million. The threshold is reduced to $1.25 million in 2022. The threshold drops to zero in 2023. The audit can be performed either by the Department of Revenue or by a certified public accountant who has met the requirements set by the Department. More information can be found here.

August 2020

Coronavirus Tax Payment and Return Filing Responsibilities (August 20) - Updates Reported: On August 17, 2020, the Georgia Department of Revenue issued an Informational Bulletin entitled Property Tax Appeal Deadline and COVID-19. This Bulletin referenced that the Chief Justice of the Georgia Supreme Court has issued an Order Declaring Statewide Judicial Emergency, which has been extended several times, that modifies various deadlines or other time schedules including an extension of the deadline for filing certain ad valorem tax appeals. The most recent of these extension orders, according to the Bulletin, provided that, for notices of assessment issued between March 14, 2020 and July 13, 2020, the 45-day appeal period began running on July 14, 2020, making the new appeal deadline August 27, 2020. Further, the Bulletin noted that pursuant to Georgia law the Department issues Orders Authorizing Collection after receiving required certifications from County Boards of Assessors; and, in view of this recent Extension Order affecting filing of property tax appeals, the certification regarding properties under appeal and values in dispute should be made after the new appeal deadline of August 27, 2020. More information can be found here.

July 2020

Coronavirus Tax Payment and Return Filing Responsibilities (July 27) - Updates Reported: Georgia, like most states, allows local governmental entities to piggy-back their local sales taxes onto the State tax. When this is done, the State collects both portions and remits to the local government entity its respective portion. When there is an occasion for a taxpayer to claim a refund, the State Department of Revenue determines the validity of the claim for refund and notifies the local government entity that the refund has been approved. In such instances, the State Department of Revenue deducts the refund from future payments otherwise due the local government entity. In some instances, the local government entity may experience a shortfall in budgeted revenue sufficient to cause disruption.

Georgia House Bill 846, recently passed by the Georgia Legislature and signed by the Governor on June 29, 2020, provides that if an approved refund exceeds a certain amount, the Department of Revenue is required to notify the local government, which then has the option to pay its share, with interest, over a period of time equal to the period covered by the refund. More information can be found here.

June 2020

Coronavirus Tax Payment and Return Filing Responsibilities (June 25) - Developments Discussed: Many Georgia counties exempt from property taxes "inventory of finished goods" destined for shipment out of state. Most people would construe the term "inventory" as meaning something the taxpayer holds for sale to others. In a surprising decision, the Georgia Court of Appeals upheld a trial court's decision that self-checkout components that Wal-Mart agreed to purchase from NCR qualified for freeport exemption as constituting "inventory of finished goods."

NCR had gathered the component parts at its facility in Fayette County, Georgia and held them for up to 90 days before shipping them to out-of-state Wal-Mart stores for installation in those stores. By contrast, the same equipment which was destined for installation in Georgia stores was conceded to not qualify for freeport exemption.

The court, relying on the Merriam-Webster Dictionary, held that the self-checkout component parts constituted inventory.

The decision does not discuss why the equipment was considered to be the property of Wal-Mart as it had apparently not left the possession of NCR on January 1 of the year in question. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities (June 2) - Updates Reported: The Georgia Department of Revenue has continued to update its Coronavirus Tax Relief FAQ's with a policy statement on the effect of employees' relocation due to the COVID-19 pandemic.

When employees work from temporary locations, the issue of what state has the jurisdiction to tax earnings associated with that location frequently arises.

The Georgia Department of Revenue has announced that it will not use an employee's relocation that is the direct result of temporary remote work requirements due to the COVID-19 pandemic to establish Georgia nexus or for exceeding the protections provided by PL 86-272 (the long-standing exemption for agents with no authority to bind the principal). The temporary protection extends for periods when: (a) there is an official work from home order issued by a government unit, or (b) pursuant to the order of a physician in relation to the pandemic or due to an actual diagnosis of COVID-19, the employee is working at home, including the subsequent 14-day period to allow for a return to normal work locations.

If an employee who normally works in another state remains in Georgia after the remote work requirements end, the normal rules for determining nexus apply.

In addition, wages paid to a nonresident employee who normally works in Georgia but who is temporarily working in another state due to the COVID-19 emergency are considered Georgia wages and the employer should continue to withhold Georgia income taxes. More information can be found here.

May 2020

Coronavirus Tax Payment and Return Filing Responsibilities (May 8) - Further Updates Reported: The Georgia Department of Revenue announced on April 16, 2020 that the state estimated income tax payments due on June 15, 2020 have been extended to July 15, 2020, as well as any other estimated income tax payments due after April 15, 2020 and before July 15, 2020. The Department had previously announced that the estimated income tax payments due on April 15, 2020 were extended to July 15, 2020. Further, any income tax return and payment due after April 15, 2020, and before July 15, 2020, is also due now on July 15, 2020. The Department stated that this extension adds additional corporate filers, as well as other fiscal year income tax filers, to the relief previously announced. It noted that the statute of limitations to file a refund claim for a previous tax year has been extended to July 15, 2020 with respect to refund claims that would have expired from April 15, 2020 and before July 15, 2020. Also, the Department stated that it has been given a 30-day extension within which it can perform certain time sensitive actions if the last date for the performance of the action is on or after April 15 and before July 15, 2020. More information can be found here.

April 2020

Coronavirus Tax Payment and Return Filing Responsibilities (April 16) - Further Updates Reported: On April 7, 2020, the Commissioner of the Georgia Department of Revenue certified an emergency rule which extends the application deadline for conservation use and forest land property tax breaks to the later of June 1, 2020 or 45 days after the date of the mailing of the notice of assessment. Georgia law allows for certain property tax relief where the property is used either for conservation purposes or forest land protection purposes. This deadline extension was initiated based on the Georgia Governor's March 31 Executive Order focused on providing broader relief for taxpayers impacted by the COVID-19 pandemic. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities (April 3) - Further Updates Reported: The Georgia Department of Revenue has included FAQs on their website which address a number of questions dealing with the extended 2019 filing deadline. That deadline has been extended from the original due date of April 15 to July 15 with respect to Georgia income tax payments and Georgia income tax returns that were due on April 15. The response to one of these questions involves whether the extension also applies to a fiscal year filer where the state income tax return is due on April 15; the response given is "Yes, if your state income tax return for your fiscal year ending during 2019 is due on April 15, your due date is postponed to July 15. This would apply regardless of whether that is the original due date or the due date on extension." More information can be found here.

March 2020

Coronavirus Tax Payment and Return Filing Responsibilities (March 25) - Due Date Changes Reported: On March 23, 2020, the Governor of the State of Georgia announced that the deadline for filing income tax returns in that state would be moved from April 15 to July 15 in accordance with the new federal tax filing deadline. Although anticipated, a formal Executive Order has not yet been published nor has the Georgia Department of Revenue issued as yet a formal notice of this deadline extension. Find more information here.

Coronavirus Tax Payment and Return Filing Responsibilities (March 19) - No Broad Changes Reported: The Georgia Department of Revenue (DOR) website has recently posted a notice stating that "Due to concerns regarding COVID-19, the DOR is encouraging all taxpayers to conduct their business with the DOR through online services. The DOR offers a number of motor vehicle and tax-related services online, without the need of in-person interactions." Find more information here. No further specifics at this time. 

Tax Incentives: The Georgia Senate has unanimously passed SB302, the "Tax Credit Return on Investment Act of 2020." This would allow the Chair of the House Ways & Means Committee and the Senate Finance Committee to request economic analyses detailing the return on investment of tax incentives offered by the State. The purpose of this is to periodically evaluate all state tax incentives in order to determine if the cost to the state is worth the benefit. On the same subject, HB 1037 would require that every film, television and media production that qualifies for the film tax credit be audited. This later bill is responsive to recent state audits that raise concern over whether some film credits used by Georgia taxpayers are proper. This bill would also expand the credit to major sporting events (i.e., the Super Bowl and World Cup).

Click here for the full bill.

February 2020

Sales and Use Tax: On January 30, 2020, Georgia Governor Brian Kemp signed into law an amendment to the state's sales tax laws requiring marketplace facilitators to collect and remit the tax, effective April 1, 2020. Under this new law, a marketplace facilitator must collect the tax if it makes at least $100,000 in Georgia taxable sales of property or services in the previous or current calendar year, calculating that $100,000 threshold using not only the facilitator's sales of its own property and services, but also sales it makes on behalf of all its marketplace sellers. Franchisors are not considered as marketplace facilitators if certain conditions are satisfied, including the conditions that such franchisor and all of its franchisees combined made annual gross sales in the U.S. of at least $500 million in the aggregate and the franchisee holds a valid certificate of registration with the Georgia Department of Revenue. In addition, large marketplace sellers are not subject to the facilitator requirements under certain conditions, including that gross sales in Georgia must be at least $500 million and the seller must hold a valid certificate of registration with the Department. More information regarding this new law can be found here.

November 2019

Income Tax Proposed Amendments to Rules for Quality Jobs and Manufacturer's and Telecommunications Investment Tax Credits: The Georgia Department of Revenue has published proposed amendments to Rule 560-7-8-.51, "Quality Jobs Tax Credit" and to Rule 560-7-8-.37, "Manufacturer's and Telecommunications Investment Tax Credit." Comments to the Department of Revenue on the proposed amendments to the Quality Jobs Tax Credit are due on or before 10:00 a.m., December 4, 2019, and comments on the proposed amendments to the Manufacturer's and Telecommunications Investment Tax Credit are due on or before 10:00 a.m., December 19, 2019.

October 2019

Taxation of Nonresident Trust Fiduciaries: The Georgia Department of Revenue released Policy Bulletin IT-2019-02 in August 2019 offering guidance on the Georgia income tax effect of the U.S. Supreme Court's decision in the case of North Carolina Dept. of Revenue v. Kimberly Rice Kaestner 1992 Family Trust on nonresident fiduciaries of trusts having Georgia resident beneficiaries. The Department announced in the Bulletin that it will follow the Kaestner decision, but only to the extent of the facts in that case, so "with respect to facts that are specifically like those in Kaestner, a nonresident trust fiduciary would not be subject to Georgia taxation. Otherwise, the fiduciary would be subject to taxation under O.C.G.A. §48-7-22 and must file a return."

September 2019

Service on the Georgia Department of Revenue: The Georgia Department of Revenue released Policy Bulletin ADMIN-2019-04, effective August 28, 2019, setting forth specific procedures required for serving legal documents on the Department. Documents requiring personal service must be delivered in person at Window 1 of the Customer Service area of the Department's primary office during the Department's business hours. Legal documents not requiring personal service will not be considered to be accepted or valid unless sent by certified mail or any other method specifically authorized by law to a specified address and with receipt acknowledged by the Department. Electronic service is only accepted if required by law or if the Department has approved it.

August 2019

Tax Incentives/Sales Tax Exemptions: Rather than expiring June 30, 2019, Georgia enacted a two-year extension of its sales and use tax exemption for purchases made during the construction of a competitive project of regional significance, so the exemption will now expire on June 30, 2021. Please refer to this webpage for said extension.

July 2019

Freeport Exemption: An amendment to O.C.G.A. Section 48-5-48.2 took effect on July 1, 2019, expanding the Level 1 Freeport Exemption to include personal property of a taxpayer's affiliates as well as inventory held for the repair, modification, or remanufacture of goods manufactured, processed, or produced by the taxpayer. The text of amendment can be found in 2019 Georgia Act 250 (HB 405), which is available here.

June 2019

Sales Tax: On May 7, 2019, the Georgia Department of Revenue issued a Policy Bulletin alerting taxpayers that remote sellers meeting certain revenue or number of retail sales thresholds can no longer satisfy their Georgia sales tax obligations by meeting specified notice and reporting requirements, and on or before July 1, 2019, must start collecting and remitting Georgia sales tax on their taxable sales. Policy Bulletin SUT-2019-02, which discusses the elimination of the notice and reporting option for remote sellers pursuant to legislation enacted effective April 28, 2019, can be found here.

For more information about state and local tax developments in Georgia, please contact:

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