Rule 110-34-1-.06 - Rural Zone Tax Credits(1) For eligible certified entities and certified investors within a currently designated Rural Zone, tax credits may be earned in accordance with O.C.G.A. § 48-7-40.32 and accompanying regulations. Nothing in this regulation shall be construed as authorization for certified entities or certified investors to claim multiple job tax credits for the same jobs or to claim multiple investment or rehabilitation credits for the same investment or rehabilitation expenses.(2) Before claiming the Rural Zone tax credit, a certified entity or certified investor must apply for a certification in a format prescribed by the Department of Community Affairs that the business location where jobs are being created or the investment has been made, including the rehabilitation credit, is located within a currently designated Rural Zone.(a) The certification application must contain the address and parcel number;(b) The certification application must verify the baseline number of jobs prior to the eligibility for the credit, as well as employment during the year for which credits are being claimed.(c) The certified entity or certified investor must file the certification with the local government's contact person for the Rural Zone. The local jurisdiction must then certify that the certified entity or certified investor location is within the Rural Zone, and that the applicant meets all local ordinances and licensing standards.(d) The certification must then be forwarded to the Department of Community Affairs for acknowledgment.(e) Once certified and acknowledged, a copy will be provided to the applicant entity or investor, the local jurisdiction and the Department of Revenue.(3) Certified entities shall receive the Rural Zone tax credit for five years beginning with the first taxable year in which new full-time equivalent jobs are created within a designated zone and for years two, three, four, and five of the taxable years immediately following, provided the new full-time equivalent jobs are maintained for each year the tax credit is claimed.(a) Each new full-time equivalent job created will be eligible for a $2,000.00 annual income tax credit. The amount of credit claimed by each certified entity shall not exceed $40,000.00 per taxable year.(b) The number of new full-time equivalent jobs shall be determined by comparing the monthly average of full-time equivalent jobs subject to Georgia income tax withholding for a given taxable year with the corresponding period of the prior taxable year; provided, however, a certified entity which begins operations during the taxable year may be certified by the Commissioner for the Department of Community Affairs to base initial eligibility on a period of less than 12 months.(c) This income tax credit shall not be allowed during a year if the net employment increase falls below the number required by subparagraph 110-34-1-.02(1)(a) of these regulations.(d) Any credit generated and utilized in years prior to the year in which the net employment increase falls below the number required by subparagraph 110-34-1-.02(1)(a) of these regulations shall not be affected.(4) Certified investors who acquire and develop property in a Rural Zone on or after January 1, 2018, shall receive the Rural Zone tax credit, subject to the following: (a) Certified investors shall demonstrate a property's ongoing commercial benefit as follows: 1. An eligible business is located in the investment property and creates a minimum of two full-time equivalent jobs and maintains employment levels equal to or greater than such levels for each year the tax credit is claimed; or2. An eligible business is located in the investment property and qualifies to receive the tax credit pursuant to subsection (c) of O.C.G.A. § 48-7-40.32; or(b) The amount of the tax credit per project shall be 25 percent of the purchase price and shall not exceed $125,000.00; provided, however, that the entire credit shall not be taken in the year in which the property is placed in commercial service but shall be prorated equally in three installments over three taxable years, beginning with the taxable year in which the property is placed in service; and(c) A certified investor shall be allowed to preserve the Rural Zone tax credit for up to seven years from the date of initial eligibility in the event the commercial requirement in paragraph 1 of this subsection is not satisfied in consecutive years. 1. A certified investor or certified entity with qualified rehabilitation expenditures on or after January 1, 2018, shall receive the Rural Zone tax credit for three years beginning with the year the property is placed in service.(i) The amount of the tax credit per project shall be 30 percent of the qualified rehabilitation expenditures and shall not exceed $150,000.00; provided, however, the entire credit shall not be taken in the first year, but shall be prorated equally in three installments over three taxable years, beginning with the taxable year in which the property is placed in service.(ii) The business shall create a minimum of two full-time equivalent jobs and maintains employment levels equal to or greater than such levels for each year the tax credit is claimed.(iii) A certified investor or certified entity shall meet certain historic preservation standards in order to be qualified to receive the Rural Zone tax credit. The standards shall be identified with the assistance of the Department of Natural Resources' Historic Preservation Division and placed on the agency's website by the Department of Community Affairs.(iv) A taxpayer who is entitled to and takes credits provided by O.C.G.A. § 48-7-40.32 for a project shall not be allowed to utilize the same qualified rehabilitation expenditures to generate any additional state income tax credits, including, but not limited to, the state income tax credit for rehabilitated historic property administered by the Department of Natural Resources' Historic Preservation Division.(v) For projects utilizing credits under O.C.G.A. § 48-7-40.32, direct jobs for which credits are received shall not be eligible toward qualifying for any other job-related state tax credits provided under the Official Code of Georgia (including but not limited to OZ, Georgia Jobs Tax Credit, Military Zone, Less Developed Census Tract, etc.).(vi) As a general rule, the teardown of facilities within a Rural Zone will not be permitted to claim rehabilitation credits. However, in rare cases, exceptional circumstances may warrant credits being earned at the discretion of the Commissioner of Community Affairs.2. In no event shall the amount of the tax credits allowed by O.C.G.A. § 48-7-40.32 for a taxable year exceed a certified entity's or certified investor's state income tax liability. Any credit claimed under O.C.G.A. § 48-7-40.32 by a certified entity or certified investor but not used in any taxable year may be carried forward for five years from the close of the taxable year in which the credit is claimed. No such credit shall be allowed by the taxpayer against prior years' tax liability.3. Any tax credits earned under O.C.G.A. § 48-7-40.32 are nontransferable.Ga. Comp. R. & Regs. R. 110-34-1-.06
O.C.G.A. § 48-7-40.32.
Original Rule entitled "Rural Zone Tax Credits" adopted. F. August 23, 2017; eff. September 12, 2017, as specified by the Agency.Amended: F. Feb. 16, 2018; eff. Mar. 9, 2018, as specified by Agency.Amended: F. Nov. 23, 2020; eff. Dec. 13, 2020.Amended: F. Oct. 16, 2024; eff. Nov. 5, 2024.