Rule 560-7-8-.67 - Life Sciences Manufacturing Job Tax Credit(1)Purpose. This regulation provides guidance concerning the implementation and administration of the tax credit under O.C.G.A. § 48-7-40.1 B. (2)Definitions.(a) As used in this regulation, the terms "establishment", "medical equipment and supplies manufacturer", and "pharmaceutical and medicine manufacturer" shall have the same meaning as in O.C.G.A. § 48-7-40.1 B.(b) "Life Sciences Manufacturing Job Tax Credit" is the credit established under O.C.G.A. § 48-7-40.1 B that is allowed to a medical equipment and supplies manufacturer and pharmaceutical and medicine manufacturer. (3)Credit Amount. A medical equipment and supplies manufacturer or a pharmaceutical and medicine manufacturer, that qualifies for the job tax credit under O.C.G.A. § 48-7-40 or 48-7-40.1 and the applicable job tax credit regulations thereunder, shall be allowed an additional $1,250 life sciences manufacturing job tax credit for jobs created on or after July 1, 2021 that are engaged in the qualifying activity of manufacturing medical equipment or supplies or manufacturing pharmaceuticals or medicine in Georgia during the taxable year. (4)Maximum Amount of Credit. The life sciences manufacturing job tax credit may be used to offset 100% of the medical equipment and supplies manufacturer's and pharmaceutical and medicine manufacturer's Georgia income tax liability derived from operations within this state. (5)Eligibility. A medical equipment and supplies manufacturer and pharmaceutical and medicine manufacturer shall be eligible for the life sciences manufacturing job tax credit under paragraph (3) of this regulation at an individual establishment of the business. If more than one business activity is conducted at the establishment, then only those jobs engaged in the qualifying activity of manufacturing medical equipment or supplies or manufacturing pharmaceuticals or medicine in Georgia shall be eligible for the life sciences manufacturing job tax credit. (a) The determination of whether a job is considered engaged in the qualifying activity of manufacturing medical equipment or supplies or manufacturing pharmaceuticals or medicine in Georgia shall be determined on a monthly basis. In order to qualify for the life sciences manufacturing job tax credit, such job must first qualify for and be claimed for the job tax credit under O.C.G.A. § 48-7-40 or 48-7-40.1. The medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer must compute a monthly average number of jobs engaged in the qualifying activity of manufacturing medical equipment and supplies or manufacturing pharmaceuticals or medicine in Georgia. Any job created on or after July 1, 2021 that is included in the job tax credit calculation, where 50 percent or more of the time is spent in a month on the qualifying activity of manufacturing medical equipment or supplies or manufacturing pharmaceuticals or medicine in Georgia, shall be eligible to be included in the total for such month, but in no case can such number exceed the number of jobs that are included in the job tax credit computation for such month. A job must be excluded from the monthly computation for any month that it does not meet the 50 percent requirement. Once the monthly average is computed, the number that is allowed cannot exceed the number of jobs that are allowed for the job tax credit for such year. (b) For example. A taxpayer started its business in 2022 and such business manufactures medical equipment and supplies in Georgia and the taxpayer also has another business in Georgia. The taxpayer qualified for and claimed the job tax credit for jobs at both businesses. However, not all the jobs included in the job tax credit are involved in the manufacture of medical equipment and supplies. The taxpayer has the following job numbers in 2022: Month in 2022 | Eligible for the Jobs Tax Credit | Allowed for the life sciences manufacturing job tax credit |
January | 50 | 25 |
February | 52 | 27 |
March | 55 | 30 |
April | 60 | 35 |
May | 71 | 46 |
June | 68 | 43 |
July | 55 | 30 |
August | 52 | 27 |
September | 55 | 30 |
October | 66 | 41 |
November | 44 | 19 |
December | 60 | 35 |
Monthly Average - Number of jobs eligible for the job tax credit and allowed for the life sciences manufacturing job tax credit | 57 | 32 |
(c) Only jobs that are involved in the qualifying activity of manufacturing medical equipment or supplies or manufacturing pharmaceuticals or medicine in Georgia are allowed to be included when claiming the life sciences manufacturing job tax credit. This shall include managers, sales jobs, and support jobs that are involved in the qualifying activity of manufacturing medical equipment and supplies or manufacturing pharmaceuticals or medicine in Georgia provided such persons meet the other requirements including the 50% monthly requirement. (6)Conditions and Limitations. The life sciences manufacturing job tax credit shall be allowed subject to the conditions and limitations under O.C.G.A. §§ 48-7-40 or 48-7-40.1 and the applicable job tax credit regulations. The life sciences manufacturing job tax credit shall be disallowed during any year that the taxpayer does not qualify as a medical equipment and supplies manufacturer or a pharmaceutical and medicine manufacturer but the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer may requalify in a later year if they meet the requirements. (a) Medical equipment and supplies manufacturers and pharmaceutical and medicine manufacturers that make the election provided in O.C.G.A. §§ 48-7-40(m) or 48-7-40.1(k) to use their 2019 job tax credit numbers for their 2021 job tax credit, cannot use their 2019 job tax credit numbers to determine the life sciences manufacturing job tax credit for 2021. (b) Only medical equipment and supplies manufacturing or pharmaceutical and medicine manufacturing jobs actually created on or after July 1, 2021 can be claimed. As such any job included in the job tax credit computation that was created before July 1, 2021 shall not be eligible for the life sciences manufacturing job tax credit. To determine the number of jobs created on or after July 1, 2021 for any year that includes July 1, 2021, the number of jobs created on or after July 1, 2021 shall be computed by subtracting the average for the months before July 1, 2021 from the average for the year. 1. For example. A taxpayer was in business before July 1, 2021 and has a business that manufactures medical equipment and supplies in Georgia and also has another business in Georgia. The taxpayer qualified for and claimed the job tax credit for jobs at both businesses. However, not all the jobs included in the job tax credit are involved in the manufacture of medical equipment and supplies. The number of jobs created on or after July 1, 2021 that are eligible for the life sciences manufacturing job tax credit is computed as follows: Month in 2021 | Eligible for the Jobs Tax Credit | Allowed for the life sciences manufacturing job tax credit |
January | 30 | 25 |
February | 32 | 27 |
March | 35 | 30 |
April | 40 | 35 |
May | 51 | 46 |
June | 58 | 43 |
Average for Jan to June | 41 | 34 |
July | 75 | 50 |
August | 60 | 50 |
September | 99 | 65 |
October | 75 | 60 |
November | 60 | 58 |
December | 75 | 73 |
Monthly Average for Entire Year | 58 | 47 |
Monthly average for entire year less Average for Jan to June and allowed for the life sciences manufacturing job tax credit | 13 | |
2. For a fiscal year that begins on or after January 1, 2021 and which includes July 1, 2021, the same computation should be performed to determine the number of jobs created on or after July 1, 2021 but there will be different months before and different months after July 1, 2021.(7)Cannot claim the Personal Protective Equipment Manufacturer Jobs Tax Credit for the Same Jobs. Taxpayers may not claim the life sciences manufacturing job tax credit for any job for which the taxpayer claims the tax credit provided under Code Section 48-7-40.1 A. Jobs for which the personal protective equipment manufacturer jobs tax credit is claimed under Code Section 48-7-40.1 A shall be excluded from all calculations for the life sciences manufacturing job tax credit under this regulation. Also, in no case can the number of jobs claimed under Code Section 48-7-40.1 A and Code Section 48-7-40.1 B together exceed the number of jobs that are included in the job tax credit computation. (8)Claiming the Credit. For a medical equipment and supplies manufacturer or pharmaceutical and medicine manufacturer to claim the life sciences manufacturing job tax credit, the medical equipment and supplies manufacturer or pharmaceutical and medicine manufacturer must submit Form IT-CA with the medical equipment and supplies manufacturer or pharmaceutical and medicine manufacturer's Georgia income tax return each year the credit is claimed. A software program's Form IT-CA that is electronically filed with the Georgia income tax return in the manner specified by the Department satisfies this requirement. (a) Withholding tax. A medical equipment and supplies manufacturer or pharmaceutical and medicine manufacturer may claim any excess life sciences manufacturing job tax credit against its withholding tax liability. Except in the case of a timely assignment under O.C.G.A. § 48-7-42, the withholding tax benefit may only be applied against the withholding tax account used by the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer for payroll purposes. In the event the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer that earned the credit is a single member limited liability company that is disregarded for income tax purposes, the withholding tax benefit may only be applied against the withholding tax liability that is attributable to wages paid by the single member limited liability company, but note that such benefit may also be assigned pursuant to O.C.G.A. § 48-7-42. A medical equipment and supplies manufacturer or a pharmaceutical and medicine manufacturer must notify the commissioner each year of its irrevocable election to take all or a part of the credit against the quarterly or monthly withholding tax payments for such medical equipment and supplies manufacturer or pharmaceutical and medicine manufacturer. When this election is made by a pass-through entity, the excess life sciences manufacturing job tax credit will not pass through to the shareholders, partners, or members of the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer if the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer is a pass-through entity. 1. Notice of Intent. To claim any excess tax credit not used on the income tax return against the medical equipment and supplies manufacturer's or the pharmaceutical and medicine manufacturer's withholding tax liability, the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer must file Revenue Form IT-WH through the Georgia Tax Center within thirty (30) days after the due date of the Georgia income tax return (including extensions) or within thirty (30) days after the filing of a timely filed Georgia income tax return, whichever occurs first. Failure to file this form as provided in this subparagraph will result in disallowance of the withholding tax benefit. However, in the case of a credit which is earned in more than one taxable year, the election to claim the withholding credit will be available for the credit earned in such subsequent year. 2. Review Period. The Department of Revenue has one hundred twenty (120) days from the date the applicable Form IT-WH under subparagraph (8)(a)1. of this regulation is received to review the credit and make a determination of the amount eligible to be used against withholding tax.3. Letter of Eligibility. Once the review is completed, a letter will be sent to the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer stating the tax credit amount which may be applied against withholding and when the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer may begin to claim the tax credit against withholding tax. The Department of Revenue shall treat this amount as a credit against future withholding tax payments and will not refund any previous withholding payments.(9)Carry Forward. Any life sciences manufacturing job tax credit which is claimed but not used in a taxable year may be carried forward for 10 years from the close of the taxable year in which the life sciences manufacturing job tax credit jobs were created. For example, life sciences manufacturing job tax credit created by an employment increase in year one, but not used in year one, may be carried forward to years two through eleven. (10)Pass-Through Entities. When the medical equipment and supplies manufacturer or the pharmaceutical and medicine manufacturer is a pass-through entity, and has no income tax liability of its own, the tax credit will pass to its individual members, shareholders, or partners based on their year ending profit/loss percentage. The credit forms will initially be filed with the tax return of the pass-through entity to establish the amount of the credit available for pass through. The credit will then pass through to its individual shareholders, members, or partners to be applied against the tax liability on their income tax returns. The shareholders, members, or partners may not claim any excess life sciences manufacturing job tax credit against their withholding tax liabilities. The credits are available for use as a credit by the individual shareholders, members, or partners for their tax year in which the income tax year of the pass-through entity ends. For example: A partnership earns the credit for its tax year ending January 31, 2022. The partnership passes the credit to a calendar year partner. The credit is available for use by the individual partner beginning with the 2022 calendar tax year.(11)Effective Date. This regulation shall be effective on July 1, 2021 and shall be applicable to taxable years beginning on or after January 1, 2021. Ga. Comp. R. & Regs. R. 560-7-8-.67
O.C.G.A. §§ 48-2-12, 48-7-40.1B.
Original Rule entitled "Life Sciences Manufacturing Job Tax Credit" adopted. F. Nov. 18, 2021; eff. Dec. 8, 2021.