Economics

Tax Incentives

Tax incentives in Athens Clarke County may either come from Athens Clarke County or the State of Georgia.  State tax credits and incentives, for qualifying business, are offered under Georgia's Business Expansion & Support Act (BEST) - pdf. BEST incentives include: Job Tax Credit, Job Tax Credit for Joint Development Authorities, Optional Investment Tax Credit, Investment Tax Credit, Childcare Tax Credit, Manufacturing Machinery and Computer Sales Tax Exemption, and Primary Materials Handling Sales Tax Exemption.  Local incentives include both Freeport and Homestead tax exemptions.

State Level Incentives

Job Tax Credit - download application here - pdf file

Provides for a statewide job tax credit for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries, but does not include retail businesses. For the purposes of establishing threshold criteria, the state is divided into four "tiers" of eligibility, beginning with those most economically disadvantaged (Tier 1) to those least disadvantaged (Tier 4). For tax credit purposes, Clarke County is considered a Tier 2 County.  For every new job created in a Tier 2 County, there is an annual tax credit equal to $2,500  for each new job created for 5 years beginning with years two through six after the creation of the job.  The job creation requirement and the tax credit increase with the tier designation. The credit can be taken for five years beginning with year two and continuing through year six after the creation of the job.  The regulations can be found here.

Job Tax Credit For Joint Development Authorities

Provides for an additional $500 job tax credit per job for a business locating within the jurisdiction of a joint authority of two or more contiguous counties. Specific to Athens-Clarke County (a Tier 2 county) tax credit can be taken annually for each new full-time job, beginning with the creation of at least 10 new jobs and is at the $2500 level. In addition, $500 can be claimed per job because Athens-Clarke County is part of a joint development authority. In other words, $3000 per job created x 10 jobs = $30,000 per year x 5 years = $150,000

Optional Investment Tax Credit

Taxpayers qualifying for the investment tax credit may choose an optional investment tax credit with the following threshold criteria:

The credit may be claimed for 10 years, provided the qualifying property remains in service throughout that period. A taxpayer must choose either the regular or optional investment tax credit. Once this election is made, it is irrevocable. The optional investment tax credit is calculated based upon a three-year tax liability average. The annual credits are then determined using this base year average. The credit available to the taxpayer in any given year is the lesser of the following amounts:

1. 90% of the increase in tax liability in the current taxable year over that in the base year, or
2. The excess of the aggregate amount of the credit allowed over the sum of the amounts of credit already used in the years following the base year.

Investment Tax Credit

Based on the same tiers as the Job Tax Credit program. Allows a taxpayer that has operated an existing manufacturing or telecommunications facility or manufacturing or telecommunications support facility in the state for the previous three years to obtain a credit against income tax liability. Companies expanding in Tier 2 counties must invest $50,000 to receive a 3% tax credit. That credit increases to 5% for recycling, pollution control, and defense conversion activities.

Childcare Tax Credit - download application here - pdf file

Employers who provide or sponsor childcare for employees are eligible for a tax credit of up to 75% of the employers' direct cost. In addition, employers who purchase qualified childcare property will receive a credit totaling 100% of the cost of such property. The credit is claimed at the rate of 10% a year for 10 years.

Manufacturing Machinery and Computer Sales Tax Exemptions

Provides for an exemption from the sales and use tax for:

1. machinery used directly in the manufacture of tangible personal property when the machinery is bought to replace or upgrade machinery in a manufacturing plant presently existing in the state and machinery components which are purchased to upgrade machinery used directly in the manufacture of tangible personal property in a manufacturing plant;
2. machinery used directly in the manufacture of tangible personal property when the machinery is incorporated as additional machinery for the first time into a manufacturing plant presently existing in this state;
3. machinery which is used directly in the manufacture of tangible personal property when the machinery is incorporated for the first time into a new manufacturing plant located in this state;
4. machinery used directly in the remanufacture of aircraft engines, parts, and components on a factory basis;
5. on the first $150,000 on each part and phased in in 20% increments from January 1, 2001 to January 1, 2005, the sale or use of repair or replacement parts, machinery clothing or replacement machinery clothing, molds or replacement molds, dies or replacement dies, and tooling or replacement tooling for machinery used directly in the manufacture of tangible personal property in a manufacturing plant presently existing in this state;
6. overhead material consumed in the performance of certain contracts between the Department of Defense or NASA and a contractor employing 500 or more full-time employees engaged in manufacturing (this exemption has been phased in at a 25% increment rate each year from January 1, 1997 to January 1, 2000);
7. the sale or lease of computer equipment to be used at a facility or facilities in this state to any high-technology company classified under certain NAICS Codes where such sale of computer equipment for any calendar year exceeds $15 million, or, in the event of a lease of such computer equipment, the fair market value of such leased computer equipment for any calendar year exceeds $15 million; and
8. the sale of machinery, equipment, and materials incorporated into and used in the construction or operation of a clean room of Class 100 or less in Georgia, provided that such clean room is used directly in the manufacture of tangible personal property.

Primary Material Handling Sales Tax Exemption

Purchases of primary material handling equipment and racking systems which are used directly for the storage, handling, and moving of tangible personal property in a new or expanding warehouse or distribution facility when such new facility or expansion is valued at $5 million or more and does not have greater than 15% retail sales are exempt from sales and use taxes. Further information on BEST can be found here: Georgia Department of Revenue pdf file.

• QuickStart Training - Georgia's Quick Start program is nationally recognized as providing customized, world-class training for new and expanding industries and businesses.
• Hope Scholarship/Hope Grant - In Georgia, HOPE (Helping Outstanding Pupils Educationally) rewards students with financial assistance in degree, diploma or certificate programs at any eligible Georgia public or private college, university or technical institute. Financial assistance includes tuition, mandatory fees, and a book allowance. There are no family income restrictions. To qualify, the student must be a Georgia resident, have graduated from high school in 1993 or later, and earn a "B" average. The scholarship may be renewed when meeting required conditions. Non-traditional students, including General Education Development (GED) recipients, may be eligible to receive a HOPE Grant to cover tuition, approved mandatory fees and a book allowance to seek a technical diploma or certificate at a public post secondary institution in Georgia if they meet the program's eligibility requirements.

Local Incentives

Freeport Exemptions

Athens-Clarke County voters have elected to exempt the following types of commercial and industrial inventory:

• Raw materials and goods in process of manufacture - 100% exemption
• Finished goods produced in Georgia within the last 12 months - 100% exemption
• Finished goods stored in Georgia within the last 12 months and destined for shipment out-of-state 100% exemption The deadline for filing an application for freeport exemption with the Board of Tax Assessors is March 1 to receive the full exemption.

Homestead Exemptions

Special local homestead exemptions exist that apply only in this county. Statewide homestead exemptions are also available and may provide more tax relief depending upon the taxpayer's circumstances. For more information on statewide homestead exemptions click here. The deadline for filing an application for a homestead exemption in Athens-Clarke County is March 1. Application for homestead exemption is made with the Tax Commissioner in the county. Failure to apply by the deadline will result in loss of the exemption for that year. The following local homestead exemptions are offered in this county:

(1) Excludes social security and pension.

(2) Includes all income of everyone in household.