Georgia Tax Expenditure Report for FY 2023 Prepared by the Fiscal Research Center of the Andrew Young School of Policy Studies at Georgia State University December 2021 Funding for this project was provided by the Georgia Department of Audits and Accounts. We would like to thank the Georgia Department of Revenue and the Georgia Office of Insurance and Safety Fire Commissioner for their contributions to the preparation of this report. Lastly, we would like to thank the Georgia Department of Audits and Accounts for their comments and recommendations. All estimates presented in this report are the work of the Fiscal Research Center. We are solely responsible for its contents. 1|Page Table of Contents Introduction................................................................................................................................................... 3 Summary of State Tax Expenditures ............................................................................................................ 9 1. Individual Income Tax ............................................................................................................................ 60 1.1 Federal Exclusions ............................................................................................................................ 62 1.2 Federal Deductions ........................................................................................................................... 71 1.3 Special Federal Conformity Provisions ............................................................................................ 78 1.4 Georgia Exemptions.......................................................................................................................... 81 1.5 Georgia Deductions .......................................................................................................................... 86 1.6 Georgia Credits ................................................................................................................................. 87 2. Corporate Income Tax .......................................................................................................................... 108 2.1 Federal Corporate Exclusions ......................................................................................................... 109 2.2 Federal Corporate Deductions ........................................................................................................ 111 2.3 Special Federal Corporate Conformity Provisions ......................................................................... 116 2.4 Corporate Apportionment ............................................................................................................... 119 2.5 Georgia Deductions ........................................................................................................................ 120 2.6 Georgia Credits ............................................................................................................................... 121 3. Corporate Net Worth Tax ..................................................................................................................... 137 4. Sales and Use Tax ................................................................................................................................. 138 4.0-4.3 Sales and Use Tax Exemptions................................................................................................. 139 4.5 Sales and Use Tax for Services....................................................................................................... 167 4.7 Vendor Compensation .................................................................................................................... 170 4.9 Casual Sales .................................................................................................................................... 171 5. Insurance Premium Tax ........................................................................................................................ 174 6. Motor Fuel Tax ..................................................................................................................................... 178 7. Alcoholic Beverage Tax ....................................................................................................................... 179 8. Tobacco Products Excise Tax ............................................................................................................... 181 9. Financial Institutions Special State Occupation Tax ............................................................................ 182 10. Special Assessment of Forest Land Conservation Use Property ........................................................ 183 11. Alternative Ad Valorem Tax on Motor Vehicles................................................................................ 184 12. Special Excise Tax on Consumer Fireworks ...................................................................................... 190 13. State Hotel-Motel Tax......................................................................................................................... 191 14. For-Hire Ground Transport Excise Tax .............................................................................................. 192 Appendix of Tables................................................................................................................................... 193 Table 1: Summary of Expired Provisions ............................................................................................. 193 Table 2: Sales and Use Tax Expenditures by Type............................................................................... 195 Tables 3-9: Distributional Tables of Selected Provisions ..................................................................... 202 2|Page Introduction Tax expenditures are provisions in the tax code that allow for special treatment of a source of income or a certain type of expense. Such treatment usually results in a reduction in tax liability for the taxpayer. In principle, these tax benefits could be provided by direct appropriation, thus these provisions are referred to as "expenditures". They represent tax revenues that would have been otherwise generated if not for this preferential treatment in the tax code. Like direct government expenditures, tax expenditures are an allocation of government revenue that are intended to achieve a particular policy outcome or encourage some activity. The value of a tax expenditure can be thought of as representing the amount of money that would be necessary to provide the same level of financial support in the form of a government grant instead of through the tax code. Tax expenditures are received by businesses and individual taxpayers and are present in all of Georgia's major taxes, including the individual income tax, corporate income tax, and sales tax. Tax expenditures, also referred to as tax preference items, can take several forms. Many are structured as tax credits and deductions, such as the corporate credit for hiring a new worker or the individual deduction for the mortgage interest paid on a primary residence. Other expenditures are in the form of exclusions of income. For example, at the state level, individuals in Georgia can exclude the value of Social Security benefits from the calculation of Georgia taxable income. Lastly, some tax expenditures may be provided in the form of reduced rates for selected taxable transactions, such as the reduced title ad valorem tax for rental vehicles and certain vehicle title transfers. Tax Expenditure Report Preparation of a tax expenditure report is required by the Official Code of Georgia Annotated 45-12-75. The purpose of the report is to list all tax expenditures and their value. In this way, these items can be tracked over time in a fashion analogous to a budget of direct governmental expenditures. While direct expenditures for such items as education or transportation are reviewed annually with every budget, tax expenditures are often not subject to such periodic review. It is important to monitor the value associated with these provisions as they are a reduction in tax revenue and their presence results in special treatment for some taxpayers relative to others. For example, the state government supports education through direct expenditure programs and through HOPE scholarships but also allows a tax deduction for certain educational expenses borne by the taxpayer or paid by an employer. Both the direct expenditure and the tax expenditure represent an allocation of government resources toward education, but only the direct expenditures are listed in an annual budget. 3|Page Leaving tax expenditures out of the annual budgetary review process creates two types of distortions. First, it under-represents the amount of government resources allocated for a given purpose. Second, it incorrectly represents the distribution of the benefits of government expenditures. The benefits of tax expenditure provisions are usually targeted to higher income taxpayers compared to direct expenditure programs, so that the absence of tax expenditures in the overall analysis may lead to the conclusion that government resources are targeted toward less affluent taxpayers. In addition, not all tax expenditure programs have a direct budgetary counterpart, thus without a tax expenditure report, these provisions and their distributional effects escape notice. The presence of tax expenditures is not necessarily bad tax policy. However, not recognizing or monitoring the resources allocated through the tax system is not good fiscal policy. Through this report, we hope to provide a consolidated listing of government resources provided through this means. This report does not, however, provide any information on how effective the provision may be in terms of fulfilling its purpose. For instance, while the value of the Research and Development (R&D) credit may be reported annually in the tax expenditure report, there is no accompanying analysis to determine the extent to which more research activities have been undertaken due to the presence of the special provision. Identifying Tax Expenditures In most cases, identifying a tax expenditure is straightforward. Tax expenditures are deviations or special exceptions from the generally defined tax base, sometimes referred to as the normal tax base or the reference tax base. However, there may be disagreement as to what constitutes the normal or reference tax base. Even at the federal level, the list of tax expenditure items included by the Administration differs from the list estimated by Congress because each works from a different definition of the standard tax base. The appropriate norm against which tax expenditures are defined is somewhat subjective and may, in some cases, be driven by the intent of the policy underlying the legislation. For example, one would not consider the difference between the current top income tax rate of 5.75 percent and the tax rate of 1 percent a tax expenditure. Tax credits and deductions for certain types of activities, such as the jobs tax credit or the lowincome housing credit, are always classified as tax expenditures. This is also the case for items that are taxed at a reduced rate. In addition, specific exclusions from the tax base are, in most cases, considered tax expenditures. Because the Georgia individual and corporate tax systems are both tied to the federal individual and corporate bases, exclusions or deductions at the federal level apply to the state tax base as well. In some cases, Georgia chooses not to conform to federal provisions, such as the Section 199 deduction for domestic production activities. In these cases, we do not include the provision as a tax expenditure. It is also important to note that tax expenditures are not computed for revenue that is due but not collected. 4|Page There are instances when it is unclear whether a given tax provision should be listed as a tax expenditure. This is because it is unclear what constitutes the general rule, and therefore, it is sometimes difficult to determine which provisions are exceptions to that rule. Consider the individual income tax exemption. Individuals are allowed to exclude an amount of income for each taxpayer included on the return, but this exemption of income is not considered a tax expenditure by all states. Another example is the provision allowing for the use of a single-factor apportionment formula in allocating income earned by corporations operating in more than one state. Because the general rule of the single-factor apportionment formula has been established at the state level, only deviations from that rule would be listed as a tax expenditure. Alternatively, if one considers the status-quo method of apportionment to be the equally weighted three-factor apportionment formula, any deviation from that rule, such as the double-weighted three-factor or single-factor apportionment formula, would be reported as a tax expenditure. This sort of problematic classification of tax expenditures also applies to the taxation of services under the state sales tax. Because state legislation refers to the purchase of tangible goods, the exclusion of services from the base may not be seen as a deviation from the general rule. On the other hand, if it is really the intent of the general rule to tax all consumption, then the exclusions provided to the consumption of services should be listed as a tax expenditure. In this report we attempt to incorporate as comprehensive a definition as possible. Defining a tax expenditure in the case of the sales tax requires particular discussion. Because there is no federal sales tax, there is no list of federal sales tax expenditures to use as a starting point. For this report, we use the state tax statute as the basis for identifying sales tax expenditures. Therefore, if an exemption specifically exists in the state statute, it is listed as a sales tax expenditure. This has the advantage of being a very straightforward and non-subjective rule to apply. As a second advantage, this method provides a comprehensive list of all statutory exemptions allowing for comparison between provisions affecting taxpayers and industries. This rule has the disadvantage of identifying many sales tax provisions as tax expenditures that would not be identified as tax expenditures under the rule of good tax policy. This is particularly true in the case of business inputs. There are several business inputs, such as the exemption for energy used in manufacturing, that are listed in this report as tax expenditures but are not activities that would be included in the tax base if the base were defined using the best economic principles. When business inputs are included in the sales tax base, those inputs are taxed and the tax is included in the price when the input is sold to the next stage of production. The more these inputs are taxed at the intermediate stages of production, the more tax is embedded in the price of the final good. This embedded tax distorts prices and influences economic decisions. Therefore, it is important to understand that while some business exemptions are listed as tax expenditures in this report, policymakers may find it helpful to distinguish the business inputs from tax expenditures that are provided for more societal reasons, such as the tax exemption for public school lunches or for the sale of food for off-premises consumption. To aid policy makers, this 5|Page report identifies in the appendix the sales tax expenditure provisions that are considered business inputs. Tax Expenditures vs. Revenue Estimates The estimate associated with a tax expenditure provision does not necessarily represent the revenue that would be gained from the repeal of the enabling legislation. Instead, the cost of the tax expenditure represents the value of the deduction or credit taken via the particular provision by itself, without consideration of potential interactions with other provisions. Although the presence of one provision may interact with the use of another provision, tax expenditures are estimated as independent provisions. For instance, if the federal research and development tax credit were repealed, federal revenues would not increase by the amount of the federal tax expenditure estimate but by a smaller amount. This is because some of the research expenditures claimed through the federal tax credit would be shifted over to another tax deduction or credit so that the savings to the government would be less than the value of the tax expenditure estimate. In addition, tax expenditure estimates do not incorporate behavioral effects that may occur due to the elimination of a provision. For instance, the tax expenditure estimate associated with the deduction for charitable giving is based on a current level of charitable contributions. If the deduction for charitable contributions were proposed to be eliminated, the revenue effect presented in the fiscal note would incorporate both the initial value of charitable contributions from the tax expenditure estimate and a timing effect that would result from people speeding up their level of contributions in response to the future loss of the deduction. Thus, tax expenditure estimates can only act as a preliminary indication of the revenue effect that would occur if the provision were eliminated or modified. Data Sources and Reliability of Estimates To the extent possible, data from the Georgia Department of Revenue (DOR) is used to estimate the expenditures included in this report. Unfortunately, the required information is not always collected or available. When it is not, other data sources, such as information from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, or the U.S. Bureau of Labor Statistics, are used. Every effort is made to provide reliable, well supported estimates of the provisions. Because of the time lag in processing income tax returns, the most recent data available from the Georgia DOR was calendar year (CY) 2019. Therefore, even in cases in which the Georgia DOR data is used as the primary data source, the tax expenditure costs presented in this report are estimates. Two subjective measures of reliability are provided in this report: the estimate reliability and the data reliability. The reliability of both the estimate and data are categorized into three classes: A, B, and C. Class A estimates and data sources are considered the most reliable. Data sources with a Class A status consist of data from the federal statistical agencies or from the Georgia DOR. Estimates with a Class A status are typically those estimates that are based on Class A data that 6|Page is particularly applicable to the expenditure provision. For instance, most of the state business tax credit expenditures are listed as Class A estimates. They are based on tax credit data provided by the Georgia DOR that specifically addresses or measures the tax expenditure provision. On the other hand, most sales tax estimates are given a Class B status. While these provisions may be based on Class A data sources, such as the Economic Census or the Consumer Expenditure Survey from the Bureau of Labor Statistics, the data may only be available at a national level, or the data may refer to more activities than is covered by the tax expenditure provision. In these cases, the data must be adjusted to represent the specific activity associated with the expenditure provision and scaled down to represent the value of the activity within Georgia. Class C estimates are believed to provide reasonable estimates and are based on the best data available. For some items, no reliable information is available. In these cases, no estimate for the expenditure is provided. Class of Estimate/Class of Data Class A Class B Class C Description of Estimate Reliability Based on data specifically related to the tax expenditure provision and to Georgia taxpayers Based on national data which has been modified to represent Georgia and the specific tax activity covered by the expenditure Represents best available estimate at this time Examples of Data Sources by Reliability Status Data from Department of Revenue, Bureau of Labor Statistics Consumer Expenditure Survey, Bureau of Economic Analysis, U.S. Census Bureau datasets Industry surveys and trade magazines, most proprietary information Newspaper articles, secondary sources Local Government Effects In addition to the state estimates, this report attempts, where possible, to estimate the effects on local government revenues. There are many state exemptions that have local ramifications, such as numerous exemptions from the sales tax base. The local estimates that are provided represent the aggregate value of the exemptions that would accrue to the counties, municipalities, school districts, and special service districts, including tax allocation and community improvement districts. Consistency with prior estimates The current report, prepared for FY 2023, presents estimates for FY 2021-FY 2023. The report for FY 2022 provided estimates for FY 2020-FY 2022. In most cases, the estimates between the current and past reports are consistent, with the latest report continuing the same trend in the 7|Page value of the estimates that was established in earlier reports. On the other hand, there are some cases in which estimates presented in the FY 2023 report differ significantly from those presented in the past reports. This usually occurs because new information has become available or because a new forecast of economic activity is relied upon to predict future values. The updated estimates are included in the current report and any major inconsistency with prior reports is noted in the discussion relating to the expenditure. Outline of the Report The report continues with a summary table containing a title of each tax expenditure provision, the tax base it is associated with, the type of expenditure, and the estimated values for FY 202123 for all tax expenditures identified in the report. Provisions that are assigned a positive value denote an expenditure that is estimated to reduce state or local revenues. Provisions assigned a value of "(m)" denote a tax expenditure that is estimated to reduce state revenues by less than $1 million. Provisions assigned a negative value denote a positive tax expenditure that is estimated to increase state revenues. Provisions assigned a value of "(-m)" denote a tax expenditure that is estimated to increase state revenues by less than $1 million. In addition to an identifying title, each expenditure provision is assigned an expenditure number, the first digit of which corresponds to the different sections of this report, such as 1 for the individual income tax and 5 for the insurance premium tax. The remaining portion of the numeric identifier is used to divide the expenditures into different subcategories such as federal and state expenditures, and deductions and credits. Only in the case of the sales tax exemptions does the expenditure number have any relationship to the state tax code section to which the expenditure item is associated. The numeric identifiers for each provision are consistent across tax expenditure reports and can be used to compare expenditure estimates from one report to the next. Following the summary tables are detailed sections for each of the specific taxes covered in this report. These detailed sections begin with a brief description of the tax, latest figures on revenue collection and any information on recent modifications to the base. These detailed sections also include additional information for each of the expenditure items such as the statute number, the year in which the expenditure provision was enacted and the year in which it became effective, information on the data and estimate reliability and data source, a more detailed description of the tax expenditure provision, and the value of the expenditure provision. The report concludes with an appendix that includes tables listing recently expired provisions, sales and use tax expenditures by type, and distributional analysis for a selected number of income tax provisions. 8|Page Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Federal Individual Income Tax Provisions1 Exclusion of Federal employee meals Individual 1.1.001 and lodging Income Tax Exclusion of housing Federal allowances for Individual 1.1.002 ministers Income Tax Exclusion of employer- Federal provided child Individual 1.1.003 care Income Tax Exclusion of Federal employee Individual 1.1.004 awards Income Tax Exclusion of employer contributions and earnings to pension plans includes Keoghs, defined benefit and defined Federal contribution Individual 1.1.005 plans Income Tax Exclusion of employer contributions for health care, health insurance premiums and long-term care Federal insurance Individual 1.1.006 premiums Income Tax Exclusion of employer-paid accident and Federal disability Individual 1.1.007 premiums Income Tax Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion 54 6 17 3 2,092 1,252 28 State FY 2022 (in Millions) 52 7 17 3 2,374 1,324 29 State FY 2023 53 7 17 3 2,690 1,390 31 1 These are Internal Revenue Code (IRC) provisions adopted by Georgia as part of its personal and corporate income tax. 9|Page Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Exclusion of employer contributions for premiums Federal on group-term Individual 1.1.008 life insurance Income Tax Exclusion 25 Exclusion of employer-paid transportation benefits and employer- provided transit Federal and vanpool Individual 1.1.009 benefits Income Tax Exclusion 36 Exclusion of employer- provided Federal adoption Individual 1.1.011 assistance Income Tax Exclusion 3 Exclusion of employer- provided education benefits (including education assistance and tuition Federal reduction Individual 1.1.012 benefits) Income Tax Exclusion 12 Exclusion of Federal miscellaneous Individual 1.1.013 fringe benefits Income Tax Exclusion 56 Exclusion of foreign earned income (including Federal housing and Individual 1.1.014 salary) Income Tax Exclusion 34 Exclusion of certain allowances for federal Federal employees Individual 1.1.015 abroad Income Tax Exclusion 9 State FY 2022 (in Millions) 25 37 3 11 58 38 9 State FY 2023 26 38 3 11 60 41 10 10 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Exclusion of benefits and allowances to armed forces personnel (includes expenditure for military Federal disability Individual 1.1.016 benefits) Income Tax Exclusion 78 Exclusion of medical care and Tricare medical insurance for military dependents, retirees, and Federal retiree Individual 1.1.017 dependents Income Tax Exclusion 35 Exclusion of veterans' benefits (includes veterans disability compensation, pensions, and Federal readjustment Individual 1.1.018 benefits) Income Tax Exclusion 95 Exclusion of income attributable to the discharge of certain student loan debt and National Health Service Corp and certain state Federal educational loan Individual 1.1.019 repayments Income Tax Exclusion 1 State FY 2022 (in Millions) 82 39 98 1 State FY 2023 87 42 105 1 11 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Exclusion of workers' compensation benefits (includes disability and survivor benefits and medical benefits, and exclusion of damages on account of personal physical injuries Federal or physical Individual 1.1.020 sickness) Income Tax Exclusion 62 Exclusion of special benefits Federal for disabled Individual 1.1.021 coal miners Income Tax Exclusion (m) Exclusion of untaxed Social Security and railroad Federal retirement Individual 1.1.022 benefits Income Tax Exclusion 238 Exclusion of Federal certain foster Individual 1.1.024 care payments Income Tax Exclusion 2 Exclusion of scholarship and Federal fellowship Individual 1.1.026 income Income Tax Exclusion 26 Exclusion of earnings of Coverdell education savings accounts and interest on Federal educational Individual 1.1.027 savings bonds Income Tax Exclusion 1 State FY 2022 (in Millions) 67 (m) 251 3 27 1 State FY 2023 64 (m) 232 3 27 1 12 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Exclusion of earnings of qualified tuition programs (including prepaid tuition programs and Federal savings account Individual 1.1.028 programs) Income Tax Exclusion 8 Exclusion for certain agricultural Federal cost-sharing Individual 1.1.029 payments Income Tax Exclusion (m) Exclusion of cancellation of indebtedness Federal income for Individual 1.1.030 farmers Income Tax Exclusion (m) Exclusion of interest on state and local government Federal private activity Individual 1.1.031 bonds Income Tax Exclusion 1 Exclusion of capital gains on sales of Federal principal Individual 1.1.032 residences Income Tax Exclusion 287 Exclusion of Federal capital gains at Individual 1.1.033 death Income Tax Exclusion 216 Carryover basis Federal of capital gains Individual 1.1.034 on gifts Income Tax Exclusion 15 Permanent exemption from Federal imputed interest Individual 1.1.035 rules Income Tax Exclusion 4 Federal Exclusion of Individual 1.1.036 combat pay Income Tax Exclusion 11 State FY 2022 (in Millions) 9 (m) (m) 1 309 220 14 4 11 State FY 2023 9 (m) (m) 1 329 228 20 5 10 13 | P a g e Expenditure 1.1.037 1.1.038 1.1.039 1.1.040 1.1.041 1.1.042 1.1.043 1.1.044 Summary of State Tax Expenditures Summary Exclusion of energy conservation subsidies provided by public utilities Tax Type of Expenditure Federal Individual Income Tax Exclusion State FY 2021 (m) State FY 2022 (in Millions) (m) State FY 2023 (m) Exclusion of income attributable to the discharge of principal residence Federal acquisition Individual indebtedness Income Tax Exclusion 1 (m) 0 Exclusion of gain for certain Federal small business Individual stock Income Tax Exclusion 9 10 9 Exclusion of interest on public purpose state and local Federal government Individual bonds Income Tax Exclusion 1 1 1 Exclusion of income earned by voluntary employees' Federal beneficiary Individual associations Income Tax Exclusion 7 8 8 Exclusion of survivor annuities paid to families of public safety Federal officers killed in Individual the line of duty Income Tax Exclusion (m) (m) (m) Exclusion of disaster Federal mitigation Individual payments Income Tax Exclusion (m) (m) (m) Deduction for Non-Itemizers of Charitable Contributions Federal Individual Income Tax Exclusion Estimate included in 1.2.021 14 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Exclusion of income attributable to the discharge of principal residence Federal acquisition Individual 1.1.045 indebtedness Income Tax Exclusion 1 Accelerated Federal depreciation Individual 1.2.001 (MACRS) Income Tax Deduction 38 Deduction for expenditures on energy-efficient commercial Federal building Individual 1.2.002 property Income Tax Deduction (m) Expensing of exploration and development Federal costs: nonfuel Individual 1.2.003 minerals Income Tax Deduction (m) Amortization of Federal business start- Individual 1.2.004 up costs Income Tax Deduction 2 Expensing of research and Federal experimental Individual 1.2.005 expenses Income Tax Deduction (m) Expensing of magazine Federal circulation Individual 1.2.006 expenditures Income Tax Deduction (m) Deductions of oil and gas exploration and Federal development Individual 1.2.007 costs Income Tax Deduction 0 Special treatment for expenses related Federal to timber Individual 1.2.008 production Income Tax Deduction 3 State FY 2022 (in Millions) (m) 36 (m) (m) 2 (m) (m) 0 3 State FY 2023 0 34 (m) (m) 2 0 (m) 0 3 15 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Expensing under IRC Section 179 of depreciable Federal business Individual 1.2.009 property Income Tax Deduction 44 Exceptions for publicly traded partnerships with qualified income derived from certain Federal energy-related Individual 1.2.010 activities Income Tax Deduction 2 Treatment of income from exploration and mining of natural resources as qualifying income under the publicly traded Federal partnerships Individual 1.2.011 rules Income Tax Deduction (m) Various agricultural Federal expensing Individual 1.2.012 provisions Income Tax Deduction 1 Community and regional Federal development Individual 1.2.013 incentives Income Tax Deduction 1 Expensing to remove architectural and transportation barriers to the Federal handicapped Individual 1.2.014 and elderly Income Tax Deduction (m) State FY 2022 (in Millions) 42 2 (m) 1 (m) (m) State FY 2023 50 3 (m) 1 0 (m) 16 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Inventory methods and valuation, (including last- in first-out, lower of cost or market, specific identification Federal for homogenous Individual 1.2.015 products) Income Tax Deduction 7 Federal Health Savings Individual 1.2.017 Accounts Income Tax Deduction 82 Deduction of Federal property taxes Individual 1.2.018 on real property Income Tax Deduction 177 Deduction of mortgage interest on Federal owner-occupied Individual 1.2.020 residences Income Tax Deduction 172 Deduction of charitable contributions (includes deductions for health, education, and for purposes other than Federal health and Individual 1.2.021 education) Income Tax Deduction 615 Deduction of Federal casualty and Individual 1.2.022 theft losses Income Tax Deduction 2 Deduction of overnight expenses for National Guard Federal and Reserve Individual 1.2.023 members Income Tax Deduction 2 Deduction of premiums for qualified Federal mortgage Individual 1.2.024 insurance Income Tax Deduction 1 State FY 2022 (in Millions) 8 86 187 169 620 2 2 (m) State FY 2023 8 92 169 176 598 2 2 0 17 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Deduction of Federal interest on Individual 1.2.025 student loans Income Tax Deduction 12 Deduction of higher Federal education Individual 1.2.026 expenses Income Tax Deduction 1 Deduction for teacher Federal classroom Individual 1.2.027 expenses Income Tax Deduction 2 Deduction of health insurance premiums and long-term care insurance premiums by Federal the self- Individual 1.2.028 employed Income Tax Deduction 41 Deduction of medical and dental expenses Federal and long-term Individual 1.2.029 care expenses Income Tax Deduction 64 Net exclusion of pension contributions and earnings: Federal traditional and Individual 1.2.030 Roth IRAs Income Tax Deduction 210 Federal Limit on NOL Individual 1.2.031 deduction2 Income Tax Deduction 0 7-year recovery period for motorsport Federal entertainment Individual 1.2.032 complexes Income Tax Deduction (m) State FY 2022 (in Millions) 14 (m) 2 42 69 226 -1 (m) State FY 2023 16 0 2 44 69 244 -1 (m) 2 Negative values denote a tax expenditure that is estimated to increase state revenues. 18 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Limitation on active passthrough losses in excess of $500,000 and Federal $250,000 filing Individual 1.2.033 single Income Tax Deduction -91 Deferral of gain Federal on like-kind Individual 1.3.001 exchanges Income Tax Deferral 29 Special rules for magazine, paperback book, Federal and record Individual 1.3.002 returns Income Tax Special Rule (m) Two-year carryback for net operating losses Federal attributable to Individual 1.3.003 farming Income Tax Special Rule 1 Special rules for mining Federal reclamation Individual 1.3.004 reserves Income Tax Special Rule (m) Cash accounting, for Federal certain Individual 1.3.005 businesses Income Tax Special Rule 18 Deferral of gain on non-dealer Federal installment Individual 1.3.006 sales Income Tax Special Rule 6 Federal Completed Individual 1.3.007 contract rules Income Tax Special Rule 1 Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain Federal employee stock Individual 1.3.008 plans) Income Tax Deferral 13 State FY 2022 (in Millions) -174 30 (m) 1 (m) 16 7 1 14 State FY 2023 -199 31 (m) 1 (m) 16 6 1 15 19 | P a g e Summary of State Tax Expenditures Expenditure Summary 1.3.009 Various agricultural expensing provisions Tax Type of State Expenditure FY 2021 Federal Individual Income Tax Special Rule 1 State FY 2022 (in Millions) 1 State FY 2023 1 Qualified Federal Opportunity Individual 1.3.010 Zones Income Tax Special Rule 3 3 3 Expensing rules Federal for certain Individual 1.3.011 productions Income Tax Special Rule (m) (m) (m) Georgia Individual Income Tax Provisions 1.4.001 Personal Exemption State Individual Income Tax Exemption 1,307 1,320 1,335 1.4.002 Retirement Income State Individual Income Tax Exemption 1,270 1,207 1,253 Exclusion of federally taxable Social State Security Individual 1.4.003 benefits Income Tax Exemption 364 375 387 Georgia Higher Education State Savings Plan Individual 1.4.004 Contributions Income Tax Exemption 14 14 14 State Interest on U.S. Individual 1.4.005 obligations Income Tax Exemption 14 15 15 1.4.006 State Certain military Individual income Income Tax Exemption Estimate not available at this time State Organ donation Individual 1.4.007 expenses Income Tax Exemption (m) (m) (m) State Aged 65/Blind Individual 1.4.008 deduction Income Tax Exemption 22 22 23 Certain dependent's State unearned Individual 1.4.009 income Income Tax Exemption (m) (m) (m) Premiums for State high-deductible Individual 1.4.010 health plans Income Tax Exemption 10 12 13 20 | P a g e Expenditure 1.4.011 1.4.012 1.4.013 1.4.014 1.4.015 Summary of State Tax Expenditures Summary Exclusion of qualified insurance benefits for firefighters Tax Type of State State State Expenditure FY 2021 FY 2022 FY 2023 (in Millions) State Individual Income Tax Exemption Estimate not available at this time Individual retirement account, Keogh, SEP and Sub-S plan withdrawals where tax has been paid to Georgia because of the difference between Georgia and Federal law for tax years 1981 through 1986. State Individual Income Tax Exemption Estimate not available at this time Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986. State Individual Income Tax Exemption Estimate not available at this time Income from any fund, program or system which is exempted by federal law or treaty. State Individual Income Tax Exemption Estimate not available at this time Certain income in which the Sub-S election is not recognized by Georgia or another state in order to avoid double taxation. State Individual Income Tax Exemption Estimate not available at this time 21 | P a g e Expenditure 1.4.016 1.4.017 1.4.018 1.4.019 1.4.020 1.4.021 1.4.022 1.4.023 1.5.001 Summary of State Tax Expenditures Summary Tax Type of Expenditure Adjustment for certain teachers retired from the Teachers Retirement System of Georgia Amount claimed by certain employers in food and beverage establishments Adjustment of certain payments to minority subcontractors State Individual Income Tax State Individual Income Tax State Individual Income Tax Exemption Deduction Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Estimate not available at this time Estimate not available at this time Adjustments to federal AGI for certain Georgia resident partners State Individual Income Tax Exemption Estimate not available at this time Exemption for certain disaster relief firms State Individual Income Tax Exemption Estimate not available at this time Exclusion of Military State Survivor Individual Benefits Income Tax Exclusion 3 3 3 Exclusion from the income tax for disability payments for State disabled first Individual responders Income Tax Exclusion (m) (m) (m) USDA Disaster State Relief Payments Individual Exemption Income Tax Exclusion 9 8 6 State Standard Individual Deduction Income Tax Deduction 906 915 925 22 | P a g e Expenditure 1.5.002 1.6.001 1.6.002 1.6.004 1.6.005 1.6.006 1.6.007 1.6.008 1.6.009 1.6.010 1.6.011 1.6.012 1.6.013 Summary of State Tax Expenditures Summary Deduction of qualified insurance premiums for former firefighters Tax Type of Expenditure State Individual Income Tax Deduction State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time State Rural Physician Individual Credit Income Tax Credit 1 1 1 Disabled person's home State purchase or Individual retrofit credit Income Tax Credit (m) (m) (m) Disaster State Assistance Individual Credit Income Tax Credit (m) (m) (m) Qualified State Caregiving Individual Expense Credit Income Tax Credit (m) (m) (m) Tax credit for life insurance for Georgia National Guard State and Air Individual National Guard Income Tax Credit (m) (m) (m) Child and State Dependent Care Individual Credit Income Tax Credit 44 45 47 Adoption of State Foster Child Individual Credit Income Tax Credit 7 9 10 State Low-Income Individual Credit Income Tax Credit 5 7 7 Credit for taxes State paid to another Individual state Income Tax Credit 429 411 427 Credit for Community State Based Faculty Individual Preceptors Income Tax Credit 2 2 2 Georgia Job Total State Tax Credit Credit Credit 160 191 194 Quality Jobs Total State Tax Credit Credit Credit 96 94 96 23 | P a g e Expenditure 1.6.014 1.6.015 1.6.016 1.6.017 1.6.018 1.6.019 1.6.020 1.6.021 1.6.022 1.6.023 1.6.026 1.6.027 1.6.028 1.6.029 Summary of State Tax Expenditures Summary New Facilities Jobs Credit Tax Total State Credit Type of Expenditure Credit State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate combined with 1.6.012 New Manufacturing Facilities Total State Property Credit Credit Credit 0 0 0 Manufacturer's Investment Tax Total State Credit Credit Credit 60 85 72 Optional Investment Tax Total State Credit Credit Credit 2 2 2 Port Activity Total State Tax Credit Credit Credit 4 5 5 Alternate Port Activity Tax Credit Total State Credit Credit Estimate combined with 1.6.018 Total State Film Tax Credit Credit Credit 760 894 1,002 Research Tax Total State Credit Credit Credit 187 194 201 Seed-Capital Total State Fund Credit Credit Credit (m) (m) (m) Qualified Health Insurance Total State Expense Credit Credit Credit (m) (m) (m) Business Enterprise Total State Vehicle Credit Credit Credit (m) (m) (m) Employer's credit for providing or sponsoring child care for employees and employer's credit for purchasing child care Total State property Credit Credit 17 18 18 Low-Income Total State Housing Credit Credit Credit 286 294 306 Historic Rehabilitation Total State Credit Credit Credit 15 18 19 24 | P a g e Expenditure 1.6.031 1.6.032 1.6.035 1.6.036 1.6.037 1.6.038 1.6.041 1.6.043 1.6.044 1.6.045 1.6.046 Summary of State Tax Expenditures Summary Tax Low/ZeroEmission Vehicle Charger Credit Total State Credit Type of Expenditure Credit State FY 2021 (m) State FY 2022 (in Millions) (m) State FY 2023 (m) Land Conservation Total State Credit Credit Credit 4 4 3 Employer's Credit for Approved Employee Total State Retraining Credit Credit 45 50 50 Qualified Education Total State Expense Credit Credit Credit 62 75 83 Qualified State Investor Tax Individual Credit Income Tax Credit (m) (m) (m) Energy-efficient or water- efficient equipment Total State credit Credit Credit 0 0 0 Tax credit for existing business enterprises undergoing qualified business expansion Total State Credit Credit Estimate combined with 1.6.013 Bank Tax Total State Credit Credit Credit 61 64 67 Employer tax credit for hiring qualified Total State parolees Credit Credit 0 (m) 0 Income Tax Credit for Contributions to Rural Health Care Total State Organizations Credit Credit 54 61 63 Revitalization Total State Zone Tax Credit Credit Credit (m) (m) (m) 25 | P a g e Expenditure 1.6.047 1.6.048 1.6.049 1.6.050 1.6.051 1.6.052 1.6.053 1.6.054 1.6.055 Summary of State Tax Expenditures Summary Georgia Musical Investment Tax Credit Tax Total State Credit Type of Expenditure Credit State FY 2021 (m) State FY 2022 (in Millions) (m) State FY 2023 (m) Public Education Innovation Fund Tax Total State Credit Credit Credit (m) (m) (m) Agribusiness Total State Tax Credit Credit Credit 11 14 14 Railroad Track Maintenance Total State Tax Credit Credit Credit 8 7 7 Reforestation credit for losses incurred on commercial timberland due to hurricane Total State damage Credit Credit 16 20 16 Qualified Post- Production Expenditures Total State Credits Credit Credit 5 7 6 Personal protective equipment manufacturer job tax credit Total State Credit Credit Estimate not available at this time Medical equipment, medical supplies, pharmaceuticals , and medicine manufacturers Total State job tax credit Credit Credit 2 2 2 Teacher Recruitment and Retention Total State Credit Credit Credit 0 0 1 26 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Federal Corporate Income Tax Provisions Permanent exemption from Federal imputed interest Corporate 2.1.001 rules Income Tax Exclusion (m) Exclusion of interest on state and local government Federal private activity Corporate 2.1.002 bonds Income Tax Exclusion (m) Exclusion of earnings of certain Federal environmental Corporate 2.1.004 settlement funds Income Tax Exclusion (m) Exclusion of certain agricultural Federal cost-sharing Corporate 2.1.005 payments Income Tax Exclusion (m) Exclusion of gain or loss on sale or exchange for Federal brownfield Corporate 2.1.006 property Income Tax Exclusion (m) Exclusion of interest on public purpose state and local Federal government Corporate 2.1.009 bonds Income Tax Exclusion (m) State FY 2022 (in Millions) (m) (m) (m) (m) (m) (m) State FY 2023 (m) (m) (m) (m) (m) (m) 27 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Various foreign provisions including inventory property sales source rule exception, interest expense allocation, deferral of active income of controlled foreign corporations, deferral of Federal active financing Corporate 2.1.010 income Income Tax Exclusion 259 Exclusion of Federal employee meals Corporate 2.1.011 and lodging Income Tax Deduction -28 Exclusion of employer-paid transportation benefits and employer- provided transit Federal and vanpool Corporate 2.1.012 benefits Income Tax Exclusion -18 Accelerated Federal depreciation Corporate 2.2.001 (MACRS) Income Tax Deduction 8 Deduction of expenditures on energy-efficient commercial Federal building Corporate 2.2.002 property Income Tax Deduction (m) Expensing of exploration and development Federal costs: nonfuel Corporate 2.2.003 minerals Income Tax Deduction (m) Amortization of Federal business start- Corporate 2.2.004 up costs Income Tax Deduction 1 State FY 2022 (in Millions) 308 -28 -18 8 (m) (m) 1 State FY 2023 348 -29 -15 8 (m) (m) 1 28 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Expensing of research and Federal experimental Corporate 2.2.005 expenses Income Tax Deduction 5 Expensing of magazine Federal circulation Corporate 2.2.006 expenditures Income Tax Deduction (m) Deductions of oil and gas exploration and Federal development Corporate 2.2.007 costs Income Tax Deduction 0 Special treatment of expenses related Federal to timber Corporate 2.2.008 production Income Tax Deduction 3 Deduction of charitable contributions (includes deductions for health, education, and for purposes other than Federal health and Corporate 2.2.009 education) Income Tax Deduction 43 Expensing under IRC Section 179 of depreciable Federal business Corporate 2.2.011 property Income Tax Deduction 7 Amortization of Federal air pollution Corporate 2.2.012 control facilities Income Tax Deduction 2 Various agricultural Federal expensing Corporate 2.2.014 provisions Income Tax Deduction (m) Community and regional Federal development Corporate 2.2.015 incentives Income Tax Deduction (m) State FY 2022 (in Millions) 3 (m) 0 3 43 7 2 (m) (m) State FY 2023 0 (m) 0 3 42 8 3 (m) 0 29 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Expensing to remove architectural and transportation barriers to the Federal handicapped Corporate 2.2.016 and elderly Income Tax Deduction (m) Inventory Federal methods and Corporate 2.2.017 valuation Income Tax Deduction 5 Limits on deductible compensation and disallowance of deduction for excess Federal parachute Corporate 2.2.018 payments Income Tax Exemption -11 Deduction for foreign-derived Federal intangible Corporate 2.2.019 income Income Tax Deduction 45 Limitation on Federal deduction of Corporate 2.2.020 FDIC premium Income Tax Deduction -10 Federal Limitation on Corporate 2.2.021 NOL deduction Income Tax Deduction -4 7 year recovery period for motorsport Federal entertainment Corporate 2.2.022 complexes Income Tax Deduction (m) Deferral of gain Federal on like-kind Corporate 2.3.001 exchanges Income Tax Deferral 11 Special rules for magazine, paperback book, Federal and record Corporate 2.3.002 returns Income Tax Special Rule (m) State FY 2022 (in Millions) (m) 6 -11 63 -10 -5 (m) 12 (m) State FY 2023 (m) 6 -10 81 -10 -6 (m) 12 (m) 30 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Two-year carryback for net operating losses Federal attributable to Corporate 2.3.003 farming Income Tax Special Rule (m) Special rules for mining Federal reclamation Corporate 2.3.004 reserves Income Tax Special Rule (m) Cash accounting, for Federal certain Corporate 2.3.005 businesses Income Tax Special Rule 5 Deferral of gain on non-dealer Federal installment Corporate 2.3.006 sales Income Tax Special Rule 19 Federal Completed Corporate 2.3.007 contract rules Income Tax Special Rule 5 Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain Federal employee stock Corporate 2.3.008 plans) Income Tax Deferral (m) Deferral of capital construction costs of Federal shipping Corporate 2.3.009 companies Income Tax Deferral (m) Qualified Federal Opportunity Corporate 2.3.010 Zones Income Tax Special Rule 7 Expensing rules Federal for certain Corporate 2.3.011 productions Income Tax Special Rule (m) State FY 2022 (in Millions) (m) (m) 4 20 5 1 (m) 7 (m) State FY 2023 (m) (m) 3 21 5 2 (m) 8 (m) 31 | P a g e Summary of State Tax Expenditures Expenditure Summary Tax Type of Expenditure Special rules for interest-charge domestic international sales Federal corporations Corporate 2.3.012 (IC-DISC) Income Tax Georgia Corporate Income Tax Provisions Special Rule State FY 2021 7 State FY 2022 (in Millions) 8 State FY 2023 10 2.4.001 Single-Factor Corporate Apportionment Income Tax Apportionment Estimate not available at this time 2.4.002 Throwback Rule Corporate Income Tax Apportionment Estimate not available at this time 2.4.003 Corporate Receipts Sourcing Corporate Income Tax Apportionment Estimate not available at this time 2.5.001 Interest on obligations of United States Corporate Income Tax Deduction Estimate not available at this time 2.5.002 Exception to intangible expenses and related interest cost Corporate Income Tax Deduction Estimate not available at this time Exclusion of global intangible low- taxed income Corporate 2.5.003 (GILTI) Income Tax Exclusion 153 182 212 Georgia Job Total State 2.6.001 Tax Credit Credit Credit 160 191 194 Quality Jobs Total State 2.6.002 Tax Credit Credit Credit 96 94 96 2.6.003 New Facilities Jobs Credit Total State Credit Credit Estimate combined with 2.6.001 New Manufacturing Facilities Total State 2.6.004 Property Credit Credit Credit 0 0 0 Manufacturer's Investment Tax Total State 2.6.005 Credit Credit Credit 60 85 72 Optional Investment Tax Total State 2.6.006 Credit Credit Credit 2 2 2 Port Activity Total State 2.6.007 Tax Credit Credit Credit 4 5 5 32 | P a g e Expenditure 2.6.008 2.6.009 2.6.010 2.6.011 2.6.012 2.6.015 2.6.016 2.6.017 2.6.018 2.6.020 2.6.021 2.6.024 Summary of State Tax Expenditures Summary Tax Alternative Port Activity Tax Credit Total State Credit Type of Expenditure Credit State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate Combined with 2.6.007 Total State Film Tax Credit Credit Credit 760 894 1,002 Research Tax Total State Credit Credit Credit 187 194 201 Seed-Capital Total State Fund Credit Credit Credit (m) (m) (m) Qualified Health Insurance Total State Expense Credit Credit Credit (m) (m) (m) Business Enterprise Total State Vehicle Credit Credit Credit (m) (m) (m) Employer's credit for providing or sponsoring child care for employees and employer's credit for purchasing child care Total State property Credit Credit 17 18 18 Low-Income Total State Housing Credit Credit Credit 286 294 306 Historic Rehabilitation Total State Credit Credit Credit 15 18 19 Low- and Zero- emission Vehicle and Total State Charger Credit Credit Credit (m) (m) (m) Land Conservation Total State Credit Credit Credit 4 4 3 Employer's Credit for Approved Employee Total State Retraining Credit Credit 45 50 50 33 | P a g e Expenditure 2.6.025 2.6.027 2.6.030 2.6.032 2.6.033 2.6.034 2.6.035 2.6.036 2.6.037 2.6.038 2.6.039 Summary of State Tax Expenditures Summary Qualified Education Expense Credit Tax Total State Credit Type of Expenditure Credit State FY 2021 62 State FY 2022 (in Millions) 75 State FY 2023 83 Energy- Efficient or Water-Efficient Equipment Total State Credit Credit Credit 0 0 0 Tax credit for existing business enterprises undergoing qualified business expansion Total State Credit Credit Estimate combined with 2.6.002 Bank Tax Total State Credit Credit Credit 61 64 67 Employer tax credit for hiring qualified Total State parolees Credit Credit 0 (m) 0 Income Tax Credit for Contributions to Rural Health Care Total State Organizations Credit Credit 54 61 63 Revitalization Total State Zone Tax Credit Credit Credit (m) (m) (m) Georgia Musical Investment Tax Total State Credit Credit Credit (m) (m) (m) Public Education Innovation Fund Tax Total State Credit Credit Credit (m) (m) (m) Agribusiness Total State Tax Credit Credit Credit 11 14 14 Railroad Track Maintenance Total State Tax Credit Credit Credit 8 7 7 34 | P a g e Summary of State Tax Expenditures Expenditure Summary 2.6.040 2.6.041 Reforestation credit for losses incurred on commercial timberland due to hurricane damage Qualified PostProduction Expenditures Credits Tax Total State Credit Total State Credit Type of Expenditure Credit Credit State FY 2021 16 5 State FY 2022 (in Millions) 20 7 State FY 2023 16 6 2.6.042 Personal protective equipment manufacturer job tax credit Total State Credit Credit Estimate not available at this time Corporate Net Worth Tax 3.001 3.002 Exemption for nonprofit corporations Exemption for insurance companies separately taxed Net Worth Tax Net Worth Tax Exemption Exemption Estimate not available at this time Estimate not available at this time Exemption for corporations with net worth of $100,000 or Net Worth 3.003 less Tax Exemption 5 5 5 Sales and Use Tax 4.00100 Sales to Federal Government, State of Georgia or a county or municipality in Georgia or any agency of such governments Sales and Use Tax Exemption Estimate not available at this time 35 | P a g e Expenditure 4.00200 4.00300 4.00400 4.00500 Summary of State Tax Expenditures Summary Tax Tangible personal property furnished by the Federal Government or any county or municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system Sales and Use Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel Sales and Use Tax Exemption Estimate not available at this time Sales of transportation furnished by a county or municipal public transit system or public transit Sales and authorities Use Tax Exemption 7 7 9 Sales of transportation furnished by an approved and authorized urban transit system Sales and Use Tax Exemption Estimate combined with 4.00400 36 | P a g e Expenditure 4.00600 4.00610 4.00620 4.00630 4.00700 Summary of State Tax Expenditures Summary Sales to any Hospital Authority created by Georgia law Tax Type of State State State Expenditure FY 2021 FY 2022 FY 2023 (in Millions) Sales and Use Tax Exemption Estimate combined with 4.00700 Sales to any Housing Authority created by Sales and Georgia law Use Tax Exemption 5 5 6 Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and Sales and related facilities Use Tax Exemption (m) (m) (m) Sales to any agricultural commission created by the Department of Sales and Agriculture Use Tax Exemption (m) (m) (m) Sales of tangible personal property and services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment Sales and function Use Tax Exemption 131 139 147 37 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Sales of tangible personal property to a non-profit health center established and receiving funds pursuant to the U.S. Public Health Service Sales and 4.00705 Act Use Tax Exemption 1 Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual Sales and 4.00710 disabilities Use Tax Exemption 1 Sales to Georgia Society of the Daughters of the American Sales and 4.00720 Revolution Use Tax Exemption (m) Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the Sales and 4.00730 poverty level Use Tax Exemption 2 State FY 2022 (in Millions) 1 1 (m) 2 State FY 2023 1 1 (m) 2 38 | P a g e Expenditure 4.00800 4.00900 4.01000 Summary of State Tax Expenditures Summary Sales of tangible personal property and services to the University System of Georgia and its educational units Tax Type of Expenditure Sales and Use Tax Exemption State FY 2021 49 State FY 2022 (in Millions) 50 State FY 2023 51 Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia Sales and Use Tax Exemption Estimate combined with 4.00800 Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary Sales and school Use Tax Exemption 5 5 5 39 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Sale of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or Sales and 4.01100 cultural institute Use Tax Exemption (m) School lunches sold and served to pupils and employees of Sales and 4.01200 public schools Use Tax Exemption (m) School lunches sold and served to pupils and employees of approved Sales and 4.01300 private schools Use Tax Exemption (m) Sales of art and other artifacts for display or exhibition to Sales and 4.01400 museums Use Tax Exemption (m) Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious Sales and 4.01500 institution Use Tax Exemption (m) State FY 2022 (in Millions) (m) (m) (m) (m) (m) State FY 2023 (m) 7 (m) (m) (m) 40 | P a g e Expenditure 4.01510 4.01700 4.01800 4.01900 4.02000 Summary of State Tax Expenditures Summary Sales of pipe organs or steeple bells to any church qualifying as a nonprofit Tax Type of State Expenditure FY 2021 Sales and Use Tax Exemption (m) State FY 2022 (in Millions) (m) State FY 2023 (m) Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce Charges for transportation of tangible personal property made in connection with interstate or intrastate transportation All tangible personal property purchased outside this state by a nonresident when the property is brought into Georgia upon the nonresident becoming a resident Water delivered through water mains, lines, or pipes Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption 5 5 5 Estimate not available at this time Estimate not available at this time 27 28 29 41 | P a g e Expenditure 4.02100 4.02200 4.02300 4.02400 Summary of State Tax Expenditures Summary Tax Sales, transfers or exchanges of tangible personal property resulting from business reorganization when the owners, partners, or stockholders maintain the same proportionate interest or share in the newly formed business Sales and Use Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made Sales and Use Tax Exemption See expenditure estimates for 4.5050 Repair services when a separate charge is made to the customer Sales and Use Tax Exemption See expenditure estimates for 4.5110 Rental of videotape or film to persons charging admission to view the tape or Sales and film Use Tax Exemption 2 1 3 42 | P a g e Expenditure 4.03000 4.03100 4.03200 4.03300 Summary of State Tax Expenditures Summary Tax Vehicles purchased by serviceconnected disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase a specially adapted the vehicle Sale of tangible personal property manufactured or assembled in Georgia for export when delivery is taken outside of Georgia Aircraft, watercraft, motor vehicles, and other transportation equipment manufactured or assembled in this State for exclusive use outside Georgia Sales and Use Tax Sales and Use Tax Sales and Use Tax Type of Expenditure Exemption Exemption Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 (m) (m) (m) Estimate not available at this time Estimate not available at this time Common or common and contract carriers Sales and Use Tax Exemption Estimate not available at this time 43 | P a g e Expenditure 4.03410 4.03420 4.03600 4.03610 4.03800 Summary of State Tax Expenditures Summary Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities Tax Sales and Use Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine Sales and parts Use Tax Exemption (m) (m) (m) Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water Sales and pollution Use Tax Exemption (m) (m) (m) Machinery and equipment used for water conservation and incorporated into a qualified water conservation facility. Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H Center Sales and Use Tax Sales and Use Tax Exemption Exemption Estimate not available at this time (m) (m) (m) 44 | P a g e Expenditure 4.03900 4.03910 4.04000 4.04100 Summary of State Tax Expenditures Summary Tax Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions Sales and Use Tax Type of Expenditure Exemption State FY 2021 (m) State FY 2022 (in Millions) (m) State FY 2023 2 Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property Sales and Use Tax Exemption Estimate not available at this time Sale of major components or repair parts installed in military aircraft, vehicles, or Sales and missiles Use Tax Exemption 28 33 33 Sale of tangible personal property and services to a nonprofit child- caring institution, child-placing agency, or Sales and maternity home Use Tax Exemption 1 1 1 45 | P a g e Expenditure 4.04200 4.04300 4.04400 4.04500 Summary of State Tax Expenditures Summary Tax Use or lease of tangible personal property when the lessor and lessee are under 100 percent common ownership and where the person who furnishes, leases, or rents the property has paid sales or use tax on the property Sales and Use Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Revenues from coin-operated amusement machines for which individual permits are Sales and required Use Tax Exemption 47 51 55 Sale of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state Sales and Use Tax Exemption Estimate not available at this time The sale or use of paper stock when used to print catalogs for distribution outside Georgia Sales and Use Tax Exemption Estimate not available at this time 46 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Sale of tangible personal property or taxable services to nonprofit Sales and 4.04600 blood banks Use Tax Exemption 1 Sale of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or Sales and 4.04700 dangerous drugs Use Tax Exemption 453 Sale of crab bait to licensed commercial Sales and 4.04800 fishermen Use Tax Exemption (m) Sale of insulin syringes and blood glucose level measuring strips dispensed without a Sales and 4.05000 prescription Use Tax Exemption 39 Sale of oxygen when prescribed by a licensed Sales and 4.05100 physician Use Tax Exemption 5 Sale or use of Sales and 4.05200 hearing aids Use Tax Exemption 6 Transactions where food stamps or WIC coupons are used as the method of Sales and 4.05300 payment Use Tax Exemption 161 State FY 2022 (in Millions) 1 478 (m) 41 1 7 151 State FY 2023 1 508 (m) 43 1 7 142 47 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Sale or use of any durable medical equipment or prosthetic device prescribed by a Sales and 4.05400 physician Use Tax Exemption 40 Sale of Georgia Sales and 4.05500 lottery tickets Use Tax Exemption 209 Sale by any qualified nonprofit parent teacher Sales and 4.05600 organization Use Tax Exemption (m) Food purchased for off-premises Sales and 4.05700 consumption Use Tax Exemption 620 Sales of food and beverages to a qualified Sales and 4.05710 food bank Use Tax Exemption 1 Exemption for prepared food and food ingredients that are donated to a qualified nonprofit agency and used for hunger relief Sales and 4.05720 purposes Use Tax Exemption (m) Sale of eligible food and beverages by any Girl or Boy Sales and 4.05900 Scout council Use Tax Exemption 2 Sale of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 Sales and 4.06000 or less Use Tax Exemption (m) State FY 2022 (in Millions) 45 219 (m) 629 1 0 2 (m) State FY 2023 47 230 (m) 678 1 0 2 (m) 48 | P a g e Expenditure 4.06100 4.06200 4.06300 4.06500 4.06600 4.06700 Summary of State Tax Expenditures Summary Advertising inserts that are used in newspapers for resale Tax Type of Expenditure Sales and Use Tax Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member Sales and of the producer Use Tax Exemption 3 3 3 Funeral merchandise when paid with funds from the Georgia Crime Victims Emergency Sales and Fund Use Tax Exemption (m) (m) (m) Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial Sales and fishermen Use Tax Exemption (m) (m) (m) Sale of gold, silver, or platinum Sales and bullion Use Tax Exemption 3 3 3 Sale of coins or Sales and currency Use Tax Exemption 1 1 1 49 | P a g e Expenditure 4.06800 4.06810 4.06900 4.07000 4.07100 4.07200 Summary of State Tax Expenditures Summary Tax Sale of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million Sales and Use Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time High-Tech Data Center Equipment Exemption Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Sale of natural gas used directly in the manufacture of electricity Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption 15 12 13 Estimate Combined with 4.06000 83 90 99 Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for Sales and public libraries Use Tax Exemption (m) (m) (m) Sale of prescribed mobility enhancing Sales and equipment Use Tax Exemption (m) (m) (m) 50 | P a g e Expenditure 4.07600 4.08100 4.08300 4.08600 4.09100 Summary of State Tax Expenditures Summary Tax Exemption for personal property used in the renovation or expansion of an aquarium Sales and Use Tax Type of Expenditure Exemption State FY 2021 1 State FY 2022 (in Millions) (m) State FY 2023 0 The purchase of food and nonalcoholic beverages provided at no charge aboard a Sales and qualified airline Use Tax Exemption 3 6 7 Sale of biomass materials used to produce electricity or steam intended Sales and for sale Use Tax Exemption 2 2 2 Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of Sales and certain aircraft Use Tax Exemption 22 22 23 The sale of prewritten software which has been delivered to the purchaser electronically or by means of load and leave Sales and Use Tax Exemption Estimate not available at this time 51 | P a g e Expenditure 4.09300 4.09400 4.09700 4.10000 4.10100 4.10200 Summary of State Tax Expenditures Summary Tax Sale of tangible personal property used for and in the construction of a competitive project of regional significance, for the period commencing January 1, 2012, until June 30, 2019 The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale Sales and Use Tax Sales and Use Tax Type of Expenditure Exemption Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 9 9 9 Estimate Combined with 4.3.2 Sales of admission to a nonrecurring major sporting Sales and event Use Tax Exemption (m) (m) 0 Exemption for sales of tickets to a qualified fine arts performance or Sales and exhibition Use Tax Exemption (m) (m) (m) The sale of certain written material by a Sales and nonprofit Use Tax Exemption 8 0 0 Partial exemption for qualified manufactured Sales and homes Use Tax Exemption 4 4 4 52 | P a g e Expenditure 4.10300 4.10400 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 Summary of State Tax Expenditures Summary Exemption for construction materials used in construction of an automobile museum Exemption for poultry diagnostic and disease monitoring service nonprofit organization Tax Type of Expenditure Sales and Use Tax Exemption Sales and Use Tax Exemption State FY 2021 (m) (m) State FY 2022 (in Millions) 0 (m) State FY 2023 0 (m) Exemption for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing Sales and Use Tax Exemption 3,427 3,657 3,858 Sale and use by a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and Sales and equipment Use Tax Exemption 201 207 213 Exemption for qualified boat Sales and repairs Use Tax Exemption (m) (m) (m) Exemption for the sale and use Sales and of jet fuel Use Tax Exemption 23 51 41 Exemption for sales within an enterprise zone Sales and Use Tax Exemption Estimate not available at this time 53 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 4.5010 4.5020 4.5030 4.5040 4.5050 4.5060 4.5070 4.5080 4.5090 4.5100 4.5110 4.5120 Construction Services Automotive Services by Motor Vehicle and Parts Dealers Investment and Financial Advisers Real Estate Services Professional, Scientific and Technical Services Administrative and Support Services Waste Management and Remediation Services Educational Services (excluding schools) Health Care and Social Assistance Services Promoters of Events; Agents for Entertainers Repair and Maintenance Services Personal and Laundry Services Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption 1,855 101 405 294 2,289 766 146 49 2,649 7 99 129 State FY 2022 (in Millions) 1,925 106 420 293 2,410 801 149 50 2,673 10 103 135 State FY 2023 1,970 109 436 297 2,483 838 152 52 2,704 17 107 141 54 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 4.70000 Compensation of dealers for reporting and Sales and paying tax Use Tax Exemption 83 4.90000 Sales tax exemption for Sales and casual sales Use Tax Exemption 3 Insurance Premium Tax Credit for retaliatory taxes Insurance paid to other Premium 5.00100 states Tax Credit 3 Georgia Job Total State 5.00200 Tax Credit Credit Credit 160 Exemption for premiums of Insurance high-deductible Premium 5.00300 health plans Tax Exemption 1 Exemption for insurance companies that only insure Insurance places of Premium 5.00400 worship Tax Exemption (m) Insurance Insurance Premium Rate 5.00500 abatements Tax Reduction 188 Special credits for life Insurance insurance Premium 5.00600 companies Tax Credit 203 Low Income Total State 5.00700 Housing Credit Credit Credit 286 Exemption for multiple employer self- Insurance insured health Premium 5.00800 plans Tax Exemption 2 Agribusiness Total State 5.00900 Tax Credit Credit Credit 11 Motor Fuel Tax Motor fuel tax exemption for Motor Fuel 6.00400 aviation fuel Tax Exemption (m) State FY 2022 (in Millions) 86 3 3 191 1 (m) 187 202 294 2 14 (m) State FY 2023 89 3 3 194 1 (m) 191 207 306 2 14 (m) 55 | P a g e Summary of State Tax Expenditures Expenditure Summary 6.00500 Motor fuel tax vendor compensation Tax Type of Expenditure Motor Fuel Tax Exemption State FY 2021 18 State FY 2022 (in Millions) 20 State FY 2023 20 Alcoholic Beverage Tax 7.00100 Sales to persons outside the state for resale or consumption outside the state Alcoholic Beverage Tax Exemption Estimate not available at this time 7.00200 7.00300 Sales to stores or canteens in U.S. military reservations 200 gallons annually of homebrew per household Alcoholic Beverage Tax Alcoholic Beverage Tax Exemption Exemption Estimate not available at this time (m) (m) (m) Sales to and use by religious organizations Alcoholic for sacramental Beverage 7.00400 purposes Tax Exemption (m) (m) (m) 7.00500 7.00600 Exemption for ethyl alcohol used for certain purposes Malt beverages containing less than one-half of 0.5 percent alcohol by volume Alcoholic Beverage Tax Alcoholic Beverage Tax Exemption Exemption Estimate not available at this time (m) (m) (m) Tobacco Products Excise Tax Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Georgia War Cigar and Veterans Cigarette 8.00100 Nursing Home Excise Tax Exemption (m) (m) (m) 56 | P a g e Summary of State Tax Expenditures Expenditure Summary 8.00200 De minimis amount brought into the state by one person Tax Cigar and Cigarette Excise Tax Type of Expenditure Exemption State FY 2021 State FY 2022 (in Millions) State FY 2023 Estimate not available at this time 8.00300 Cigars and cigarettes stored in a public warehouse Cigar and Cigarette Excise Tax Exemption Estimate not available at this time 8.00400 Certain cigars and cigarettes held by licensed dealers Cigar and Cigarette Excise Tax Exemption Estimate not available at this time Financial Institutions Special State Occupation Tax Financial Institutions Deduction for Business 9.00100 interest paid License Tax Deduction 6 8 10 9.00200 Deductions for income from authorized activities of a domestic international banking facility Financial Institutions Business License Tax Deduction Estimate not available at this time 9.00300 Deduction for income from banking business with persons or entities outside the U.S. Financial Institutions Business License Tax Deduction Estimate not available at this time Special Assessment of Forest Land Conservation Use Property Special assessment of forest land conservation 10.00000 use property State Grant Credit 39 50 44 Alternative Ad Valorem Tax on Motor Vehicles Reduced rate for related Rate 11.001 family transfers Title Fee Reduction 11 12 12 Disabled veteran 11.002 exemption Title Fee Exemption (m) (m) (m) 57 | P a g e Expenditure 11.003 11.004 11.005 11.006 11.007 11.008 11.009 11.010 11.012 11.013 11.014 11.015 Summary of State Tax Expenditures Summary Reduced rate for rental vehicles Tax Type of State Expenditure FY 2021 Rate Title Fee Reduction 15 State FY 2022 (in Millions) 16 State FY 2023 17 Reduced rate for vehicles manufactured in Rate years 1963-89 Title Fee Reduction (m) (m) (m) Reduced rate for salvage Rate vehicles Title Fee Reduction 15 15 16 Dealer loaner vehicle exemption Title Fee Deferral 3 4 3 Reduced rate for donated Rate vehicles Title Fee Reduction (m) (m) (m) Extended payment period for out-of-state Rate vehicles Title Fee Reduction 18 18 19 Trade-in exemption (including rebates and cash discounts) Title Fee Exemption 151 155 163 Special assessment for used vehicles Title Fee Special Rule 8 8 9 Buy here pay here Rate transactions Title Fee Reduction 6 6 7 Exemption for leased vehicles qualifying for Manufacturing Headquarters Title Fee Exemption Estimate not available at this time Treatment of Leased Vehicles Title Fee Special Rule 9 9 9 Treatment of vehicles involved in divorce settlement or business Rate reorganization Title Fee Reduction (m) (m) (m) 58 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2021 Treatment of 11.016 non-IRP Buses Title Fee Deferral (m) Exemption for vehicles purchased by disabled first 11.017 responders Title Fee Exemption (m) Special Excise Tax on Consumer Fireworks State Hotel-Motel Tax For-Hire Ground Transportation Excise Tax State FY 2022 (in Millions) (m) (m) State FY 2023 (m) (m) 59 | P a g e 1. Individual Income Tax The individual income tax was first levied in Georgia in 1929 at a rate equal to one-third the federal rate of income taxation. The rate structure effective January 1, 2019 includes six brackets ranging from 1 percent to 5.75 percent, prior to which the rate structure had a top rate of 6 percent and had remained unchanged since 1955 when the 7 percent rate on taxable incomes over $20,000 was eliminated. The threshold for each bracket depends on the filing status of the taxpayer, i.e. single, head of household, and married filing separate or joint. The initial base of the Georgia individual income tax is the taxpayer's federal adjusted gross income (AGI). Several adjustments are made to this starting point to arrive at the version of AGI adopted by Georgia. After computing the Georgia version of AGI, taxpayers deduct an amount representing either the value of their Georgia itemized deductions or the Georgia standard deduction, the latter of which was increased effective January 1, 2022 from $6,000 to $7,100 for married filers and from $4,600 to $5,400 for single and head of household filers. These standard deduction amounts were $3,000 and $2,300 respectively prior to January 1, 2018. In addition, filers are allowed a personal exemption of $7,400 for joint filers, $3,700 for married filing separately, and $2,700 for other filers as well as $3,000 for each dependent. The tax is administered by the Georgia DOR. Individual income tax collections equaled $12.4 billion in FY 2020 and accounted for 52.3 percent of Georgia's revenues from taxation. In CY 2020, 5.2 million individual state returns were processed. While predominately paid by individuals, a significant number of business entities are organized so that income associated with these enterprises is reported through the individual income tax. All revenue collected from the individual income tax is deposited in the State General Fund. It is important to keep in mind that tax expenditure estimates may differ from revenue estimates presented in fiscal notes. Estimates included in fiscal notes incorporate behavioral effects that are not considered when estimating tax expenditure provisions. The purpose of a tax expenditure estimate is to convey the cost that would be necessary if the item were offered as a direct budgetary expenditure instead of a reduction in the tax liability. A second caveat concerns the estimates associated with the state individual income tax credit provisions. Forecasting the value of the revenue loss stemming from the use of these credits is problematic because of the presence of extensive carryforwards in the case of some credits. Because of past credit carryforwards, taxpayers may claim credits on current or future year tax returns that were created in prior years. In some cases, the credit may have expired such that taxpayers are no longer able to create new credits, but the revenue loss to the state continues for several years until all carryforward liabilities have been exhausted. Therefore, the estimates provided in this report should be interpreted as the expected revenue loss stemming from the use of currently created or previously created credits and not an estimate of the value of credits created in a given year. 60 | P a g e The Tax Expenditure Report includes the expenditures associated with both state and federal tax provisions. Because the Georgia individual income tax is based on the federal system, expenditures that are present at the federal level have revenue implications at the state level. For example, changes to itemized deductions by the federal government have repercussions on state tax revenues. The value of the expenditure as it relates to state taxes paid by those filing a Georgia return is presented in section 1.1 on federal exclusions. In some cases, Georgia might not adopt a federal provision. In that case, the expenditure is not listed because there is no loss of revenue to the state. In general, the value of the federal tax expenditure to the state of Georgia is determined by allocating a portion of the federal tax base associated with the expenditure estimate as estimated by the Joint Committee on Taxation for the U.S. Congress. The data and estimate reliability for the conformity provisions are considered class A. In some cases, however, the values of the Georgia estimates are highly sensitive to the assumptions made concerning the appropriate tax rate for a given expenditure provision and the allocation factor that is used to determine the amount of federal activity associated with Georgia. The estimates associated with the federal conformity provisions are based on current law as it existed on January 1, 2021; any changes to provisions that may occur because of federal legislative action after that date are not reflected in the estimates. The explanations of the federal conformity provisions are taken from Tax Expenditures: Compendium of Background Material on Individual Provisions, prepared by the Congressional Research Service for the U.S. Senate Committee on the Budget, December 2020. 61 | P a g e 1.1 Federal Exclusions 1.1.001 Exclusion of employee meals and lodging Federal Statute IRC section 119 and 132(e)(2) Description: Employees are allowed to exclude the fair market value of meals and lodging furnished by employers if provided on the employer's premises for the convenience of the employer. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 54 52 53 (m) Denotes a value of less than $1 million 1.1.002 Exclusion of housing allowances for ministers Federal Statute IRC Section 107 and 265 Description: In general, this provision allows ministers to deduct certain housing related expenditures from their gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 6 7 7 (m) Denotes a value of less than $1 million 1.1.003 Exclusion of employer-provided child care Federal Statute IRC Section 129 Description: Payments by an employer, under a dependent care assistance program, for qualified dependent care assistance provided to an employee are excluded from the employee's income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 17 17 17 (m) Denotes a value of less than $1 million 1.1.004 Exclusion of employee awards Federal Statute IRC Section 74(c) and 274(j) Description: This provision provides an exclusion for certain awards of tangible personal property given to employees for length of service or for safety achievement. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 1.1.005 Exclusion of employer contributions and earnings to pension plans includes Keoghs, defined benefit and defined contribution plans Federal Statute IRC Sections 401-407, 410-418E, and 457 Description: Employer contributions to qualified pension, profit-sharing, stock-bonus, and annuity plans on behalf of an employee are not taxable to the employee. Furthermore, the employee is generally not taxed on the benefits when they are distributed. 62 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 2,092 2,374 2,690 1.1.006 Exclusion of employer contributions for health care, health insurance premiums and long- term care insurance premiums Federal Statute IRC Sections 105,106, and 125 Description: Employees are allowed to exclude contributions by their employers for healthcare coverage for themselves and their dependents. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1,252 1,324 1,390 (m) Denotes a value of less than $1 million 1.1.007 Exclusion of employer-paid accident and disability premiums Federal Statute IRC Sections 105 and 106 Description: Premiums paid by employers for employee accident and disability insurance plans are excluded from the taxable income of employees. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 28 29 31 (m) Denotes a value of less than $1 million 1.1.008 Exclusion of employer contributions for premiums on group-term life insurance Federal Statute IRC Section 79 Description: Premiums paid by the employer for qualified group-term life insurance plans for the employee are excluded from employee's taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 25 25 26 (m) Denotes a value of less than $1 million 1.1.009 Exclusion of employer-paid transportation benefits and employer-provided transit and vanpool benefits Federal Statute IRC Section 132(f) Description: Employer provided qualified transportation benefits are excluded from employee taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 36 37 38 (m) Denotes a value of less than $1 million 1.1.011 Exclusion of employer-provided adoption assistance Federal Statute IRC Section 137 63 | P a g e Description: Benefits received from a qualified employer-sponsored adoption assistance program are excludable from taxable income for the employee. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 1.1.012 Exclusion of employer-provided education benefits (including education assistance and tuition reduction benefits) Federal Statute IRC Section 117(d) and Section 127 Description: Tuition reductions for employees of educational institutions may be excluded from taxable income. In addition, an employee may exclude amounts paid by the employer for qualified educational assistance programs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 12 11 11 (m) Denotes a value of less than $1 million 1.1.013 Exclusion of miscellaneous fringe benefits Federal Statute IRC Section 132 and 117(D) Description: Certain miscellaneous fringe benefits provided by employers, including services provided at no additional costs, employee discounts, working condition fringes, de minimis fringes and certain tuition reductions, can be excluded from the employee's taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 56 58 60 (m) Denotes a value of less than $1 million 1.1.014 Exclusion of foreign earned income (including housing and salary) Federal Statute IRC Section 911 Description: U.S. taxpayers who live and work abroad are allowed a capped exclusion of their wage and salary income. In addition, qualified individuals can also exclude certain excess foreign housing costs. This provision does not apply to federal employees working abroad. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 34 38 41 (m) Denotes a value of less than $1 million 1.1.015 Exclusion of certain allowances for federal employees abroad Federal Statute IRC Section 912 Description: U.S. federal civilian employees who work abroad are allowed to exclude from taxable income certain special allowances they receive that are generally linked to the cost of living. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 9 9 10 (m) Denotes a value of less than $1 million 64 | P a g e 1.1.016 Exclusion of benefits and allowances to armed forces personnel (includes expenditure for military disability benefits) Federal Statute IRC Section 112, 134, 104(a)(4) or (5) and 104(b) Description: Military personnel are provided with a variety of in-kind benefits (or cash payments in lieu of such benefits) that are not taxed. In addition, certain members of the armed forces are eligible for tax exclusion of disability pay. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 78 82 87 (m) Denotes a value of less than $1 million 1.1.017 Exclusion of medical care and Tricare medical insurance for military dependents, retirees, and retiree dependents Federal Statute IRC Section 112 and 134 Description: Military personnel are provided with a variety of in-kind benefits (or cash payments in lieu of such benefits) that are not taxed. In addition, certain members of the armed forces are eligible for tax exclusion of disability pay. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 35 39 42 (m) Denotes a value of less than $1 million 1.1.018 Exclusion of veterans' benefits (includes veterans disability compensation, pensions, and readjustment benefits) Federal Statute 38 U.S.C. Section 5301 Description: All benefits administered by the U.S. Department of Veterans Affairs are exempt from income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 95 98 105 (m) Denotes a value of less than $1 million 1.1.019 Exclusion of income attributable to the discharge of certain student loan debt and National Health Service Corp and certain state educational loan repayments Federal Statute IRC Section 108(f) Description: This section provides that, in certain instances, student loan cancellation and student loan repayment assistance may be excluded from gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.1.020 Exclusion of workers' compensation benefits (includes disability and survivor benefits and medical benefits, and exclusion of damages on account of personal physical injuries or physical sickness) Federal Statute IRC Section 104(a)(1)-(5) Description: Employees are not taxed on the value of insurance contributions for workers' compensation medical benefits made on their behalf by employers, or on the medical benefits or reimbursements they actually receive. Workers' compensation benefits to employees in cases of work-related injury and to survivors in cases of work-related death are not taxable. 65 | P a g e Damages paid, through either a court award or a settlement, to compensate for physical injury or sickness, are not included in income of the recipient. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 62 67 64 (m) Denotes a value of less than $1 million 1.1.021 Exclusion of special benefits for disabled coal miners Federal Statute IRC Section 104(a)(1) Description: Cash and medical benefits to coal mine workers or their survivors for total disability or death resulting from coal workers' pneumoconiosis (black lung disease) paid under the Black Lung Benefits Act generally are not taxable. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.022 Exclusion of untaxed Social Security and railroad retirement benefits Federal Statute IRC Section 86 Description: In general, Social Security and railroad retirement benefits are not subject to tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 238 251 232 (m) Denotes a value of less than $1 million 1.1.024 Exclusion of certain foster care payments Federal Statute IRC Section 131 Description: Qualified payments are excluded from the foster care provider's gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 3 3 (m) Denotes a value of less than $1 million 1.1.026 Exclusion of scholarship and fellowship income Federal Statute IRC Section 117 Description: Scholarships and fellowships can be excluded from the gross income of students and their families provided: (1) the students are pursuing degrees and (2) the amounts are used for tuition and fees required for enrollment or for books, supplies, and equipment required for courses at a qualified institution. Amounts used for room, board and incidental expenses are not excluded from gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 26 27 27 (m) Denotes a value of less than $1 million 1.1.027 Exclusion of earnings of Coverdell education savings accounts and interest on educational savings bonds Federal Statute IRC Section 530 66 | P a g e Description: Contributions to a Coverdell Education Savings Account are not deductible but the earnings grow on a tax deferred basis. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.1.028 Exclusion of earnings of qualified tuition programs (including prepaid tuition programs and savings account programs) Federal Statute IRC Section 529 Description: Contributions to qualified tuition programs are not deductible at the federal level but earnings accumulate on a tax-deferred basis. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 8 9 9 (m) Denotes a value of less than $1 million 1.1.029 Exclusion for certain agricultural cost-sharing payments Federal Statute IRC Section 126 Description: Grants made for the purpose of conserving soil and water resources or protecting the environment are excluded from the recipient's taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.030 Exclusion of cancellation of indebtedness income for farmers Federal Statute Sections 108 and 1070(b)(4) Description: The provision allows farmers who are solvent to treat the income arising from the cancellation of certain indebtedness as if they were insolvent taxpayers. As such, income that would normally be subject to tax would be excluded from tax under qualifying conditions. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.031 Exclusion of interest on state and local government private activity bonds Federal Statute Various Description: Interest earned on qualified private activity bonds is tax exempt. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.1.032 Exclusion of capital gains on sales of principal residences Federal Statute Federal Statute IRC Section 121 Description: A taxpayer may exclude from federal income tax up to $250,000 of capital gain ($500,000 in the case of married taxpayers filing joint returns) from the sale or exchange of their principal residence. 67 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 287 309 329 1.1.033 Exclusion of capital gains at death Federal Statute IRC Sections 1001,1002,1014,1015,1023,1040,1221, and 1222 Description: Capital gains tax is not imposed on the increased value of an asset when ownership of the property is transferred as a result of the death of the owner. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 216 220 228 (m) Denotes a value of less than $1 million 1.1.034 Carryover basis of capital gains on gifts Federal Statute IRC Sections 1001,1014,1015,1023,1040,1221, and 1222 Description: Capital gains tax is not imposed on the increased value of an asset when ownership of the property is transferred as a gift during the owner's lifetime. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 15 14 20 (m) Denotes a value of less than $1 million 1.1.035 Permanent exemption from imputed interest rules Federal Statute IRC Sections 163(e), 483, 1274, and 1274A Description: Debt instruments for amounts not exceeding an inflation adjusted maximum that are given in exchange for real property may not have imputed to them an interest rate greater than 9 percent. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 4 4 5 (m) Denotes a value of less than $1 million 1.1.036 Exclusion of combat pay Federal Statute IRC Section 112 Description: Compensation received by active members of the armed forces is excluded from gross income for any month the service member served in a combat zone or was hospitalized as a result of an injury or illness incurred while serving in a combat zone. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 11 11 10 (m) Denotes a value of less than $1 million 1.1.037 Exclusion of energy conservation subsidies provided by public utilities Federal Statute IRC Section 136 Description: In general, this provision allows customers to exclude from their gross income the value of any subsidy provided by a public utility for the 68 | P a g e purchase or of any energy conservation measure. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.038 Exclusion of income attributable to the discharge of principal residence acquisition indebtedness Federal Statute IRC Section 108 Description: Income from discharge of indebtedness on qualified principal residence debt, up to a $750 thousand limit ($375 thousand for married individuals filing separately), is excluded from gross income for tax years beginning Jan. 1, 2021, through Dec. 31, 2025. For tax years beginning before Jan. 1, 2021, the limits were $2 million and $1 million, respectively. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 (m) Denotes a value of less than $1 million 1.1.039 Exclusion of gain for certain small business stock Federal Statute IRC Sections 1202 and 303 Description: This provision allows non-corporate taxpayers to exclude from gross income 50 percent of any gain from the sale or exchange of qualified small business stock issued after August 10, 1993. When a shareholder in a closely held business dies there is no reported gain or loss on the partial redemption of stock. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 9 10 9 (m) Denotes a value of less than $1 million 1.1.040 Exclusion of interest on public purpose state and local government bonds Federal Statute IRC Sections 103, 141 and 146 Description: Interest income of qualifying governmental bonds is excluded from taxable income (expenditure estimate has been adjusted to reflect GA law that only interest on GA bonds is excluded from income). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.1.041 Exclusion of income earned by voluntary employees' beneficiary associations Federal Statute IRC Sections 501(a) and 501(c)(9) Description: Provided certain requirements are met, the income earned by a voluntary employee beneficiary association (VEBA) is exempt from federal income taxes. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 8 8 (m) Denotes a value of less than $1 million 69 | P a g e 1.1.042 Exclusion of survivor annuities paid to families of public safety officers killed in the line of duty Federal Statute IRC Section 101(h) Description: The surviving spouse of a public safety officer killed in the line of duty can exclude from gross income a survivor annuity payment under a governmental pension plan. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.043 Exclusion of disaster mitigation payments Federal Statute IRC Section 139 Description: Payments made for disaster mitigation under the Robert T. Stafford Disaster Relief and Emergency Insurance Act or the National Flood Insurance Act is excluded from income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.1.044 Deduction for Non-Itemizers of Charitable Contributions Federal Statute IRC Section 170 Description: For 2020, individuals who don't itemize deductions can take up to a $300 above-the-line deduction for cash contributions to "qualified charitable organizations." For 2021, this above-the-line deduction allowed on a joint return is $600 (it remains at $300 for other taxpayers). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate included in 1.2.021 (m) Denotes a value of less than $1 million 1.1.045 Exclusion of income attributable to the discharge of principal residence acquisition indebtedness Federal Statute IRC Section 108 Description: Income from discharge of indebtedness on qualified principal residence debt, up to a $750 thousand limit ($375 thousand for married individuals filing separately), is excluded from gross income for tax years beginning Jan. 1, 2021, through Dec. 31, 2025. For tax years beginning before Jan. 1, 2021, the limits were $2 million and $1 million, respectively. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 (m) Denotes a value of less than $1 million 70 | P a g e 1.2 Federal Deductions 1.2.001 Accelerated depreciation (MACRS) Federal Statute IRC Sections 167 and 168 Description: Under the Modified Accelerated Cost Recovery System (MACRS) the cost of tangible depreciation property of certain energy property is allowed a shorter depreciation period. Taxpayers are allowed to depreciate the costs of new rental housing and certain other buildings and equipment on an accelerated schedule. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 38 36 34 (m) Denotes a value of less than $1 million 1.2.002 Deduction of expenditures on energy-efficient commercial building property Federal Statute IRC Sections 179D Description: This provision provides a formula-based tax deduction for all or part of the cost of energy-efficient commercial building property placed in service after December 31, 2005 and before January 1 2021, . State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.2.003 Expensing of exploration and development costs: nonfuel minerals Federal Statute IRC Sections 263, 291, 616-617,56,1254 Description: Firms engaged in mining are permitted to expense certain exploration and development costs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.2.004 Amortization of business start-up costs Federal Statute IRC Section 195 Description: This provision allows a business taxpayer to deduct up to $10,000 in qualified start-up expenditures. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 1.2.005 Expensing of research and experimental expenses Federal Statute IRC Section 174 and 59(e) Description: This provision allows a business taxpayer to deduct certain research expenditures that are paid or incurred in connection with the taxpayer's trade or business. 71 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) 0 1.2.006 Expensing of magazine circulation expenditures Federal Statute IRC Section 173 Description: In general, current federal tax law allows publishers of newspapers, magazines, and other periodicals to deduct their expenditures to maintain, establish, or increase circulation in the year in which they are made. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.2.007 Deductions of oil and gas exploration and development costs Federal Statute IRC Sections 611, 612, 613, 613A and 291; 263(c), 616-617, 57(a)(2), 59(e) and 1254 Description: Firms that extract oil, gas or other minerals are permitted a deduction to recover their capital investment in a mineral reserve, which depreciates due to the physical and economic depletion or exhaustion as the mineral is recovered. Firms engaged in the exploration and development of oil, gas or geothermal properties have the option of expensing certain intangible drilling and development costs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 1.2.008 Special treatment for expenses related to timber production Federal Statute IRC Sections 194, 263A(c)(5) Description: This provision allows expensing of production costs of growing timber. Taxpayers are also allowed different depreciation practices for qualified reforestation expenses. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 1.2.009 Expensing under IRC Section 179 of depreciable business property Federal Statute IRC Section 179 Description: Within certain limits, a taxpayer may elect to deduct as a current expense the cost of qualifying property in the tax year when it is placed in service. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 44 42 50 (m) Denotes a value of less than $1 million 72 | P a g e 1.2.010 Exceptions for publicly traded partnerships with qualified income derived from certain energy-related activities Federal Statute IRC Section 7704 Description: This code section allows publicly traded partnerships to be treated as a corporation for the purposes of the federal income tax under most situations. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 3 (m) Denotes a value of less than $1 million 1.2.011 Treatment of income from exploration and mining of natural resources as qualifying income under the publicly traded partnerships rules. Federal Statute IRC Sections 162, 175, 180, 446, 448, 461, 464 Description: This code section allows publicly traded partnerships to be treated as a corporation for the purposes of the federal income tax under most situations. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.2.012 Various agricultural expensing provisions Federal Statute IRC Sections 162, 175, 180, 446, 448, 461, 464 Description: Taxpayers in the business of farming may choose to expense costs associated with soil and water conservation, soil conditioning and the costs associated with raising dairy cattle and breeding cattle. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.2.013 Community and regional development incentives Federal Statute IRC Sections 38(b), 39(d), 45A, 280C(a), 1391-1397D Description: Communities designated as empowerment zones and renewable communities are eligible for special development incentives. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 (m) Denotes a value of less than $1 million 1.2.014 Expensing to remove architectural and transportation barriers to the handicapped and elderly Federal Statute IRC Section 190 Description: This provision allows taxpayers to deduct up to $15,000 of expenses incurred in a single year for removing physical barriers to handicap or elderly individuals in qualified facilities or public transportation vehicles owned or leased by the taxpayer. 73 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 1.2.015 Inventory methods and valuation, (including last-in first-out, lower of cost or market, specific identification for homogenous products) Federal Statute IRC Sections 475, 491-492 Description: This provision allows taxpayers to use alternative inventory systems to determine cost of goods sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 8 8 (m) Denotes a value of less than $1 million 1.2.017 Health Savings Accounts Federal Statute IRC Section 223 Description: This provision allows taxpayers to exclude their health savings account contributions from their gross income in determining their taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 82 86 92 (m) Denotes a value of less than $1 million 1.2.018 Deduction of property taxes on real property Federal Statute IRC Section 164 Description: Taxpayers may claim an itemized deduction for property taxes paid on owner-occupied residences. The deduction for property and state income or sales taxes in total cannot exceed $10,000. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 177 187 169 (m) Denotes a value of less than $1 million 1.2.020 Deduction of mortgage interest on owner-occupied residences Federal Statute IRC Section 163(h) Description: A taxpayer may claim an itemized deduction for "qualified residence interest" which includes interest paid on a mortgage secured by a principal residence and a second residence. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 172 169 176 (m) Denotes a value of less than $1 million 1.2.021 Deduction of charitable contributions (includes deductions for health, education, and for purposes other than health and education) Federal Statute IRC Sections 170 and 642(c) Description: Subject to certain limitations, charitable contributions may be deducted by individuals. 74 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 615 620 598 1.2.022 Deduction of casualty and theft losses Federal Statute IRC Sections 165(c)(3), 165(e), 165(h)-165(k) Description: An individual may claim an itemized deduction for unreimbursed personal casualty or theft losses up to a specified limit. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 1.2.023 Deduction of overnight expenses for National Guard and Reserve members Federal Statute IRC Sections 162(p) and 62(a)(2)(E) Description: An above-the-line deduction is available for unreimbursed overnight travel, meals, and lodging expenses of National Guard and Reserve members. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 1.2.024 Deduction of premiums for qualified mortgage insurance Federal Statute IRC Section 163(h) Description: Qualified mortgage insurance premiums paid with respect to a qualified residence can be treated as tax deductible. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 (m) Denotes a value of less than $1 million 1.2.025 Deduction of interest on student loans Federal Statute IRC Section 221 Description: Taxpayers may deduct interest paid on qualified education loans in determining their adjusted gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 12 14 16 (m) Denotes a value of less than $1 million 1.2.026 Deduction of higher education expenses Federal Statute IRC Section 222 Description: Taxpayers may deduct qualified tuition and related expenses for postsecondary education from their adjusted gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 (m) Denotes a value of less than $1 million 75 | P a g e 1.2.027 Deduction of teacher classroom expenses Federal Statute IRC Section 62 Description: An eligible employee of a public or private elementary or secondary school may claim a deduction for certain unreimbursed expenses State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 1.2.028 Deduction of health insurance premiums and long-term care insurance premiums by the self-employed Federal Statute IRC Section 162(l) Description: Generally, a self-employed individual may deduct the entire amount paid for health insurance or long-term care insurance. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 41 42 44 (m) Denotes a value of less than $1 million 1.2.029 Deduction of medical and dental expenses and long-term care expenses Federal Statute IRC Section 213 Description: Most medical expenses that are paid by an individual but not reimbursed by an employer or insurance company may be deducted from taxable income to the extent they exceed 10 percent of adjusted gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 64 69 69 (m) Denotes a value of less than $1 million 1.2.030 Net exclusion of pension contributions and earnings: traditional and Roth IRAs Federal Statute Section 219 and 408 and 408A Description: Individuals participating in a traditional or Roth IRA are allowed to deduct contributions in the case of traditional IRAs and distributions in the case of Roth IRAs. Both exemptions are phased out for higher-income individuals. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 210 226 244 (m) Denotes a value of less than $1 million 1.2.031 Limit on NOL deduction Federal Statute Pub. L. No. 115-63 Description: The deduction for net operating losses is limited to 80 percent of taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 0 -1 -1 (m) Denotes a value of less than $1 million 1.2.032 7-year recovery period for motorsports entertainment complexes Federal Statute IRC Sections 167 and 168 76 | P a g e Description: Taxpayers are allowed to deduct the cost of certain deppreciable assets from motorsports complexes over 7 years. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.2.033 Limitation on active pass through losses in excess of $500,000 and $250,000 filing single Federal Statute IRC Section 461(l) Description: Deductions for excess business losses are limited to $500,000 and to $250,000 if filing single. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -91 -174 -199 (m) Denotes a value of less than $1 million 77 | P a g e 1.3 Special Federal Conformity Provisions 1.3.001 Deferral of gain on like-kind exchanges Federal Statute IRC Section 1031 Description: When business or investment property is exchanged for property of a like- kind, no gain or loss is recognized on the exchange and therefore no tax is paid at the time of the exchange State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 29 30 31 (m) Denotes a value of less than $1 million 1.3.002 Special rules for magazine, paperback book, and record returns Federal Statute IRC Section 458 Description: Publishers and distributors of magazines, paperbacks, and records may elect to exclude from gross income for a tax year, the income from the sale of goods that are returned after the close of the tax year. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.3.003 Two-year carryback for net operating losses attributable to farming Federal Statute IRC Section 172 Description: Current law provides a two-year carryback period for losses related to farming. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.3.004 Special rules for mining reclamation reserves Federal Statute IRC Section 468 and 1274 Description: Electing taxpayers may deduct the current value equivalent of certain estimated future reclamation and closing costs for mining and solid waste disposal sites. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.3.005 Cash accounting, for certain businesses Federal Statute IRC Sections 446 and 448 Description: The cash method of accounting may be used by any business taxpayer that is not a tax shelter and falls into at least one of three specified categories. These are farming businesses, qualified personal service corporations, and entities that meet a gross receipts test. 78 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 18 16 16 1.3.006 Deferral of gain on non-dealer installment sales Federal Statute IRC Sections 453 and 453A(b) Description: Some taxpayers are allowed to report some sales using the installment method of accounting in which the gross profit from the sale is prorated over the years during which the payments are received. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 6 7 6 (m) Denotes a value of less than $1 million 1.3.007 Completed contract rules Federal Statute IRC Section 460 Description: Some taxpayers with construction or manufacturing contracts extending for more than one tax year are allowed to report some or all of the profit on the contracts under special accounting rules rather than the normal rules of tax accounting. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.3.008 Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain employee stock plans) Federal Statute IRC Sections 401(a)(28), 404(a)(9), 404(k), 415(c)(6), 512(e), 1042, 4975(d)(3), 4978, 4979A Description: Employer contributions may be deducted as a business expense. In addition, some contributions are subject to less restrictive limits than contributions to other employee benefit plans. Tax on qualified employee stock purchase plans are not taxed when granted or excised. Tax is deferred until stock is sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 13 14 15 (m) Denotes a value of less than $1 million 1.3.009 Various agricultural expensing provisions Federal Statute IRC Section 1301 Description: Beginning with tax years after 1997, taxpayers have the option to calculate their current year income tax by averaging over a prior three-year period, all or a portion of their income from farming and/or fishing. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 79 | P a g e 1.3.010 Qualified Opportunity Zones Federal Statute PL 115-97; IRS 1400Z-1 Description: The inclusion in gross income of capital gains reinvested in a qualified opportunity fund may be temporarily deferred and 15 percent of capital gains reinvested may be excluded if the investment is held for seven years. Capital gains from the sale or exchange of an investment in the qualified opportunity fund held for at least 10 years are excluded from gross income. A qualified opportunity fund is an investment vehicle organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property that holds at least 90 percent of its assets in qualified opportunity zone property. Qualified opportunity zone property includes any qualified opportunity zone stock, any qualified opportunity zone partnership interest, and any qualified opportunity zone business property. Certain low-income community population census tracts may be designated as qualified opportunity zones by the chief executive officer of the State (which includes the District of Columbia). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 1.3.011 Expensing rules for certain productions Federal Statute IRC Section 181 Description: A taxpayer may elect to treat the cost, up to a maximum of $15 million ($20 million in some areas) for any production, of any qualified film, television, or live theatrical production commencing production prior to Jan. 1, 2026, as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 80 | P a g e 1.4 Georgia Exemptions 1.4.001 Personal Exemption Statute 48-7-26 Year Enacted 1987 Year Effective 1987 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis, see Table 3 in Appendix. Description: For tax years 2012 and after, the personal exemption is $7,400 for married filing joint, $3,700 for married filing separately, and $2,700 for all other filers. In addition, $3,000 is excluded from income for each dependent claimed on the tax return. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1,307 1,320 1,335 (m) Denotes a value of less than $1 million 1.4.002 Retirement Income Statute 48-7-27(a)(5) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note The definition of retirement income was modified, effective tax year 2018, to include Dept. of Defense survivor benefit payments regardless of age of beneficiary. For distributional analysis of this provision, see Table 4 in Appendix. Description: For tax years beginning in 2012, individuals age 62 and above may exclude a maximum of $35,000 and age 65 and above may exclude a maximum of $65,000 of retirement income. This income exclusion may include a maximum of $4,000 of earned income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1,270 1,207 1,253 (m) Denotes a value of less than $1 million 1.4.003 Exclusion of federally taxable Social Security benefits Statute 48-7-27(a)(7) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note Description: Social Security and tier 1 railroad retirement benefits are excluded from state taxable income. 81 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 364 375 387 1.4.004 Georgia Higher Education Savings Plan Contributions Statute 48-7-27(a)(11) and (11.1) Year Enacted NA Year Effective Taxable years beginning on or after January 1, 2002 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note The contribution limits were increased from $2,000 to $4,000 effective January 1, 2016 and again in 2019 from $4,000 to $8,000, effective January 1, 2020. For distributional analysis, see Table 5 in Appendix. Description: An exemption from income is allowed for contributions to a qualified higher education savings plan. The exemption is limited to $8,000 per qualified plan beneficiary starting in 2020. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 14 14 14 (m) Denotes a value of less than $1 million 1.4.005 Interest on U.S. obligations Statute 48-7-27(b)(2) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 6 in Appendix Description: Interest earned on U.S. government bonds and other obligations are not included as taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 14 15 15 (m) Denotes a value of less than $1 million 1.4.007 Organ donation expenses Statute 48-7-27(a)(13) Year Enacted 1981 Year Effective Taxable years beginning on or after January 1, 2005 Data Source U.S. Dept. of Health and Human Services, Organ Procurement and Transplantation Network Estimate Reliability Class B Data Reliability Class A Note Description: Certain unreimbursed expenses associated with the donation of organs in accordance with the National Organ Procurement Act are deductible from 82 | P a g e federal adjusted gross income up to a maximum value of $10,000. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.4.008 Aged 65/Blind deduction Statute 48-7-27(a)(1) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 7 in Appendix Description: Taxpayers aged 65 or older are allowed an annual deduction from income of $1,300 per taxpayer. Taxpayers who are blind are allowed an annual deduction from income of $1,300 per taxpayer. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 22 22 23 (m) Denotes a value of less than $1 million 1.4.009 Certain dependent's unearned income Statute 48-7-27(a)(8) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note Description: Taxpayers can exclude unearned income of dependents that was included in the federal AGI of a parent's return. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.4.010 Premiums for high-deductible health plans Statute 48-7-27(a)(13.1) Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note Description: Taxpayers are allowed to exclude 100 percent of premiums paid for certain high-deductible health plans. 83 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 10 12 13 1.4.021 Exclusion of Military Survivor Benefits Statute 48-7-27(a)(5) Year Enacted 2018 Year Effective 2018 Data Source Fiscal note for HB 749 (2018) and DoD Statistical Report of the Military Retirement System Estimate Reliability Class A Data Reliability Class A Note Description: Income received by a surviving family member based on the service record of a deceased service member is exempt from state income tax State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 1.4.022 Exclusion from the income tax for disability payments for disabled first responders Statute 48-7-27(a)(12.4) Year Enacted 2019 Year Effective 2019 Data Source Fiscal note SB 138 LC 43 1258 (2019) Estimate Reliability Class A Data Reliability Class A Note Description: An income tax exclusion is allowed for first responders equal to 100 percent of the payments made to and received by a that disabled first responder pursuant to O.C.G.A 45-9-85. This exclusion requires that such amounts are included in the taxpayer's federal adjusted gross income and are not otherwise exempt from the tax imposed by this article under any other provision of law. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.4.023 USDA Disaster Relief Payments Exemption Statute 48-7-27(a)(11.2) Year Enacted 2020 Year Effective Taxable years beginning on or after January 1, 2019, and ending on or before December 31, 2023 Data Source Fiscal Note for HB 105 LC 43 1601S (2020) Estimate Reliability Class A Data Reliability Class A Note Description: Income received as payments from a federal disaster relief or assistance 84 | P a g e grant program administered by this state or its instrumentalities or the United States Department of Agriculture to address agricultural losses suffered due to Hurricane Michael, to the extent such income is included in federal adjusted gross income or federal taxable income, is exempt from state income tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 9 8 6 (m) Denotes a value of less than $1 million Georgia individual income tax expenditures for which an estimate is not currently available Expenditure Statute 1.4.006 48-7-27(a)(12) Summary Certain military income of members of the National Guard and Reserves 1.4.011 1.4.012 1.4.013 1.4.014 1.4.015 1.4.016 1.4.017 48-7-27(a)(12.2) 48-7-27 48-7-27 48-7-27(a)(4)(A) 48-7-27(d) 48-7-27(a)(9) 48-7-28.2 Exclusion of qualified insurance benefits for firefighters Individual retirement account, Keogh, SEP and Sub-S plan withdrawals where tax has been paid to Georgia because of the difference between Georgia and Federal law for tax years 1981 through 1986 Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986 Income from any fund, program or system which is exempted by federal law or treaty Certain income in which the Sub-S election is not recognized by Georgia or another state in order to avoid double taxation Adjustment for certain teachers retired from the Teachers Retirement System of Georgia Amount of employer social security credit claimed by certain food and beverage establishments 1.4.018 1.4.019 48-7-27 48-7-27 Adjustment of certain payments to minority subcontractors Adjustments to federal AGI for certain Georgia resident partners 1.4.020 48-2-100 Exemption for certain disaster relief firms 85 | P a g e 1.5 Georgia Deductions 1.5.001 Standard Deduction Statute 48-7-27(a)(1) Year Enacted 1971 Year Effective 1971 Data Source DOR data for TY 2019 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 8 in Appendix. The allowable standard deduction amounts were increased effective January 1, 2022. Description: Taxpayers who do not itemize expenses on their federal return are allowed a standard deduction of $5,400 for single and head of household filers, $7,100 for married joint filers, and $3,550 for married separate filers. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 906 915 925 (m) Denotes a value of less than $1 million Georgia individual income tax expenditures for which an estimate is not currently available Expenditure Statute 1.5.002 48-7-27 Summary Deduction of qualified insurance premiums for former firefighters 86 | P a g e 1.6 Georgia Credits 1.6.001 Rural Physician Credit Statute 48-7-29 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for certain physicians practicing in rural counties. The value of the credit is equal to the lessor of $5,000 or the taxpayer's income tax liability and may be claimed for five years. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 1.6.002 Disabled person's home purchase or retrofit credit Statute 48-7-29.1 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1999 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a $500 credit for the purchase of a new single-family home containing accessibility features or for the retrofit of an existing home. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.004 Disaster Assistance Credit Statute 48-7-29.4 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2000 Data Source DOR data as of TY 2020 and FEMA disasters database Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for individuals receiving disaster relief payments from the Georgia Emergency Management Agency or from the Federal Emergency Management Agency. The credit amount is the actual amount of the disaster relief assistance or $500, whichever is less. 87 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 1.6.005 Qualified Caregiving Expense Credit Statute 48-7-29.2 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1999 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for taxpayers with expenses related to the care of a qualifying family member. The value of the credit is equal to no more than 10 percent of the total amount expended for qualifying caregiving expenses. In no event shall the credit exceed $150 or the taxpayer's income tax liability, whichever is less. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.006 Tax credit for life insurance for Georgia National Guard and Air National Guard Statute 48-7-29.9 Year Enacted 2005 Year Effective Taxable years beginning on or after January 1, 2005 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is available for active duty members of the Georgia National Guard and Air National Guard on active duty for more than 90 consecutive days and who purchase qualified life insurance through the Services' Group Life Insurance program administered by the U.S. Department of Veterans Affairs. The credit amount is equal to the cost of the premiums of the life insurance policy. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.007 Child and Dependent Care Credit Statute 48-7-29.10 Year Enacted 2006 Year Effective Taxable years beginning on or after January 1, 2006 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note 88 | P a g e Description: This credit is equal to 30 percent of the federal credit claimed for qualified expenses related to the care of children and dependents. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 44 45 47 (m) Denotes a value of less than $1 million 1.6.008 Adoption of Foster Child Credit Statute 48-7-29.15 Year Enacted 2008 Year Effective Tax years beginning on or after January 1, 2008 Data Source DOR data for TY 2020 and fiscal note for HB 114 LC 43 1943S (2021) Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides an annual tax credit for taxpayers adopting qualified foster children. The value of the credit is $2,000 per child annually until the child attains the age of 18 and applies to adoptions occurring in taxable years beginning on or after January 1, 2008. For adoptions beginning January 1, 2021, the credit for the first five years is increased to $6,000 and credits not utilized for the year of adoption may not be carried forward. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 9 10 (m) Denotes a value of less than $1 million 1.6.009 Low-Income Credit Statute 48-7A-3 Year Enacted 1991 Year Effective Taxable years beginning on or after January 1, 1992 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a tax credit to low-income individuals. The credit is based on the taxpayer's AGI. The maximum value of the credit is $26 per dependent. For tax years beginning on January 1, 2010 and after, the credit is nonrefundable. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 7 7 (m) Denotes a value of less than $1 million 1.6.010 Credit for taxes paid to another state Statute 48-7-28 Year Enacted 1931 Year Effective 1931 Data Source DOR data for TY 2020 Estimate Reliability Class A 89 | P a g e Data Reliability Class A Note Description: A resident individual with income taxed by another state is allowed a credit for such tax. The maximum value of this credit is equal to the amount that would be due if the income were taxed by Georgia. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 429 411 427 (m) Denotes a value of less than $1 million 1.6.011 Credit for Community-Based Faculty Preceptors Statute 48-7-29.22 Year Enacted 2019 Year Effective 2019 Data Source DOR data for TY 2019 and fiscal note for HB 287 LC 43 1215 (2019) Estimate Reliability Class A Data Reliability Class A Note Effective for tax years beginning on or after January 1, 2019, the deduction under O.C.G.A. 48-7-27 was replaced by a tax credit and definition of the physician that qualifies changed from community based faculty physicians to community based faculty preceptors. Description: Tax credits are earned by community-based faculty preceptors that are physicians, as defined by O.C.G.A.43-34-21, in the amount of $500 for their first, second, and third preceptor rotations and $1,000 for each of their fourth through tenth preceptorship rotations. Tax credits for community-based faculty preceptors that are advanced practice registered nurses or physician assistants, as defined by O.C.G.A.43-34-21, are $375 for their first through third preceptor rotations and $750 for their fourth through tenth preceptor rotations. This credit expires December 31, 2023. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 1.6.012 Georgia Job Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability Note 48-7-40 and 48-7-40.1 48-7-40: 1989; 48-7-40.1: 1993 48-7-40: Taxable years beginning on or after January 1, 1990; 48-7-40.1: Taxable years beginning on or after January 1, 1994 DOR data for TY 2020 and Office of Insurance and Safety Fire Commissioner Class A Class A The same estimate is provided in the corporate income tax and insurance premium tax sections, see 2.6.001 and 5.00200. In 2018, the qualifying areas were expanded to include counties with military bases and industrial parks that are owned and operated by a government entity. 90 | P a g e Description: The credit provides a statewide job tax credit to any business or headquarters engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development. Retail establishments are only allowed the credit if located in one of the 40 least-developed counties of the state. Average wages must be greater than the average wage of the county in the state with the lowest average wage. To be eligible, employers must offer health insurance to all new employees. It also provides a tax credit for businesses enterprises designated as operating in less-developed areas. These include areas with ten or more contiguous census tracts with higher than 15 percent poverty and counties with both a military base and a government owned and operated industrial park. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 23 27 28 Corporate Income Tax Expenditure 131 157 160 Insurance Premium Tax Expenditure 7 7 7 State Tax Expenditure 160 191 194 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.013 Quality Jobs Tax Credit Statute 48-7-40.17 Year Enacted 2009 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note This provision was modified to allow consideration of jobs in disregarded entities for purposes of qualifying for the credit. This statute was modified in 2017 allowing taxpayers to establish subsequent job creation periods for a qualified project. The same estimate is provided in the corporate income tax section, see 2.6.002. Description: This credit is for employers creating new high-wage jobs or relocating high-wage jobs into the state. A quality job or high-wage job has 30 hours a week of regular work; is not already located in Georgia; and pays at or above 110 percent of the average wage of the county in which it is located. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 94 92 94 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 96 94 96 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.014 New Facilities Jobs Credit Statute Year Enacted Year Effective 48-7-40.24 2003 Latest modifications are effective for taxable years beginning on or after July 1, 2021 91 | P a g e Data Source Fiscal note for HB 587 LC 43 1970S for 2021 Estimate Reliability NA Data Reliability NA Note The same estimate is provided in the corporate income tax section, see 2.6.003. Description: This provision provides for a credit of $5,250 per year per qualified new job for up to five years, subject to recapture based on job and payroll maintenance requirements, and until July 1, 2021, limited to 4,500 such new jobs for any one qualified project. For business enterprises that first qualify in a taxable year beginning on or after January 1, 2009, the business enterprise must meet the job creation requirement of 1,800 eligible new full-time employees and either the qualified investment requirement of $450 million in qualified investment property, or the payroll requirement of $150 million in total annual Georgia W-2 reported payroll within the six- year period, subject to extension under certain conditions. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 1.6.012 (m) Denotes a value of less than $1 million. 1.6.015 New Manufacturing Facilities Property Credit Statute 48-7-40.25 Year Enacted 2003 Year Effective Latest modifications are effective for taxable years beginning on or after July 1, 2021 Data Source Fiscal note for HB 587 LC 43 1970S for 2021 Estimate Reliability NA Data Reliability NA Note Utilization of this credit resulting from known or anticipated projects is expected to be material, but not within the time horizon of this report; see fiscal note. The same estimate is provided in the corporate income tax section, see 2.6.004. Description: This is an incentive for a manufacturer who has operated a manufacturing facility in this state for at least 3 years and who spends $800 million on a new manufacturing facility in this state, subject to a job requirement of 1,800 full-time employees. The credit equal to 6 percent of the cost of all qualified investment property purchased or acquired, up to $50 million with respect to any one project. For qualified high-impact aerospace defense projects certified on or after July 1, 2021, the maximum credit for any one project is increased to $100 million and the taxpayer may begin claiming credits once investment and job threshholds of $500 million and 1,000, respectively, are reached. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million. 1.6.016 Manufacturer's Investment Tax Credit Statute 48-7-40.2, 48-7-40.3, and 48-7-40.4 Year Enacted 1994 92 | P a g e Year Effective Taxable years beginning on or after January 1, 1994 Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.005. Description: For tax years beginning on or after January 1, 2020, the taxpayer must invest a minimum of $100,000 per project per location during the tax year to receive credit, up from a $50,000 minimum ir prior years. Eligible taxpayers must be in operation for the immediately preceding three years. Property lease for a period of five years or longer is eligible for the credit. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 11 16 14 Corporate Income Tax Expenditure 49 69 58 State Tax Expenditure 60 85 72 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.017 Optional Investment Tax Credit Statute 48-7-40.7, 48-7-40.8, and 48-7-40.9 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996. Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.006. Description: An alternative investment tax credit is available for taxpayers based on their investments in manufacturing or telecommunications facilities or support facilities where these facilities have been operating for the three immediately preceding years. The credit is available for investments in excess of $5 million and placed in service no earlier than January 1, 1996, for tier 1 counties. The investment threshold is $10 million for tier 2 counties and is $20 million for tier 3 and 4 counties. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 1 1 1 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.018 Port Activity Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability 48-7-40.15 1998 Latest modifications apply to taxable years beginning on or after January 1, 2010 DOR data as of TY 2020 Class A Class A 93 | P a g e Note Estimate combined with 1.6.019. The same estimate is provided in the corporate income tax section, see 2.6.007. Description: For taxable years beginning before January 1, 2010, businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development that have increased shipments out of Georgia ports during the previous 12-month period by more than 10 percent over their 1997 base year port traffic, or by more than 10 percent over 75 net tons, five containers or 10 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. For taxable years beginning on or after January 1, 2010, the increase is based on a comparison of the previous 12-month period to the second preceding 12-month period. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 4 5 5 State Tax Expenditure 4 5 5 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.019 Alternate Port Activity Tax Credit Statute 48-7-40.15A Year Enacted 2009 Year Effective 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note Estimate combined with 1.6.018. The same estimate is provided in the corporate income tax section, see 2.6.008. Description: Credit is allowed to any business enterprise located in a tier 2 or 3 county or in a less developed area and which qualifies and receives the Jobs Tax Credit and which: 1. Consists of a distribution facility of greater than 650,000 square feet in operation in this state prior to December 31, 2008; 2. Distributes product to retail stores owned by the same legal entity or its subsidiaries as such distribution facility; and 3. Has a minimum of eight retail stores in this state in the first year of operations. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 1.6.018 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.020 Film Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability Note 48-7-40.26 2005 Taxable years beginning on or after January 1, 2005 DOR data for TY 2020 Class B Class A The same estimate is provided in the corporate income tax 94 | P a g e section, see 2.6.009. Tax credit provisions applicable to qualified interactive entertainment production companies were modified in 2015. Description: Production companies which have at least $500,000 of qualified expenditures in a state-certified production may claim this credit. Certification must be approved through the Georgia Department of Economic Development. There are special provisions relating to the tax credits awarded to interactive entertainment companies. Under the 2017 modifications to this statute, the 2019 sunset for the qualified interactive entertainment production company tax credit has been eliminated. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 462 543 609 Corporate Income Tax Expenditure 298 350 393 State Tax Expenditure 760 894 1,002 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.021 Research Tax Credit Statute 48-7-40.12 Year Enacted 1997 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.010. Description: This credit is for expenses resulting from research conducted in Georgia by businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. A tax credit is allowed provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 17 17 18 Corporate Income Tax Expenditure 170 177 183 State Tax Expenditure 187 194 201 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.022 Seed-Capital Fund Credit Statute 48-7-40.27 & 40.28 Year Enacted 2008 Year Effective Applicable to investments made on or after July 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.011. Description: This provides a tax credit for certain qualified investments made on or after July 1, 2008, in a research fund, the purpose of which is to provide early- 95 | P a g e stage financing for businesses formed as a result of research conducted in Georgia's research universities. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.023 Qualified Health Insurance Expense Credit Statute 48-7-29.13 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.012. Description: Employers earn a tax credit based on the premiums paid for a high- deductible health plan. Employers must employ 50 or fewer persons for whom the employer provides high-deductible health plans as defined by Section 223 of the Internal Revenue Code and in which such employees are enrolled. The qualified health insurance must be made available to all employees and compensated individuals of the employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The qualified health insurance premium expense must equal at least $250 annually. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.026 Business Enterprise Vehicle Credit Statute 48-7-40.22 Year Enacted 2001 Year Effective Taxable years beginning on or after January 1, 2002. Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.015. Description: This is a credit given to a business enterprise for the purchase of a motor vehicle that is used exclusively to provide transportation for its employees. To qualify, a business enterprise must certify that each vehicle carries an average daily ridership of not less than four employees for an entire taxable year. 96 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.027 Employer's credit for providing or sponsoring child care for employees, and employer's credit for purchasing child-care property Statute 48-7-40.6 Year Enacted 1994 & 1999 Year Effective Credit for cost of operation: taxable years beginning on or after January 1, 1994. Credit for cost of qualified child-care property: taxable years beginning on or after January 1, 2000. Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.016. Description: This credit is provided to employers based on their expenses related to providing or sponsoring child care for their employees' children and for the purchase of qualified child-care property. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 6 6 6 Corporate Income Tax Expenditure 11 12 12 State Tax Expenditure 17 18 18 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.028 Low-Income Housing Credit Statute 48-7-29.6 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income and insurance premium tax section, see 2.6.017 and 5.00700. Description: This is a credit against Georgia income taxes for taxpayers owning developments which receive the federal low-income housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 92 95 99 Corporate Income Tax Expenditure 31 32 33 Insurance Premium Tax Expenditure 163 167 174 State Tax Expenditure 286 294 306 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 97 | P a g e 1.6.029 Historic Rehabilitation Credit Statute 48-7-29.8 Year Enacted 2002 Year Effective Taxable years beginning on or after January 1, 2004 Data Source DOR data as of TY 2020 and Fiscal Note for HB 469 LC 43 2035S (2021) Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the corporate income tax section, see 2.6.018. This provision expires December 31, 2022. Description: A credit is provided based on expenses related to the certified rehabilitation of a certified structure or historic home. Standards set by the Georgia Department of Natural Resources must be met. A $25 million per calendar year aggregate cap applies to projects earning more than $300,000 in credits. The credit was modified in 2015 to allow unused credits to be assigned or sold to other taxpayers. Further modifications in 2021 applied a $5 million per calendar year cap on smaller projects and added a sunset date for the credit of December 31, 2022. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 11 14 14 Corporate Income Tax Expenditure 4 4 4 State Tax Expenditure 15 18 19 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.031 Low/Zero-Emission Vehicle Charger Credit Statute 48-7-40.16 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax, see 2.6.020. Description: This credit applies to the purchase or lease of an electric vehicle charger and to the conversion of a standard vehicle to a low- or zero-emission vehicle. The credit for the purchase or lease of a new low- or zero-emission vehicle was eliminated effective July 1, 2015. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.032 Land Conservation Credit Statute Year Enacted Year Effective 48-7-29.12 2006 Taxable years beginning on or after January 1, 2006 98 | P a g e Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.021. Description: This provides for an income tax credit for the qualified donation of real property that qualifies as conservation land pursuant to Chapter 22 of O.C.G.A. Title 36. This credit was modified in 2015 such that the aggregate value of credits awarded under this provision cannot exceed $30 million per year and no new credit applications will be accepted after December 31, 2021. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 4 4 3 Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure 4 4 3 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.035 Employer's Credit for Approved Employee Retraining Statute 48-7-40.5 Year Enacted 1994 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.024. Description: The tax credit reimburses employers for the cost of providing retraining services to their employees. As of January 1, 2009, retraining programs shall not include any retraining on commercially, mass produced software packages for word processing, database management, presentations, spreadsheets, e-mail, personal information management, or computer operating systems except a retraining tax credit shall be allowable for those providing support or training on such software. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 16 17 18 Corporate Income Tax Expenditure 29 32 33 State Tax Expenditure 45 50 50 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.036 Qualified Education Expense Credit Statute 48-7-29.16 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax 99 | P a g e section, see 2.6.025. Description: This provides a tax credit for donations made by taxpayers to a student scholarship organization which are used for tuition and fees for a qualified school or program. Annual cap increased to $100 million effective January1, 2019. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 45 55 60 Corporate Income Tax Expenditure 17 21 23 State Tax Expenditure 62 75 83 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.037 Qualified Investor Tax Credit Statute 48-7-40.30 Year Enacted 2010 Year Effective 2011; legislation modified in 2013 and 2015 Data Source DOR data for TY 2020 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a 35 percent tax credit for amounts invested in certain Georgia-headquartered small businesses. The credit was extended in 2015 and is now available for qualified investments made in years 2011- 2018. Credits may be taken in the second year following the investment year and carried forward up to three years. The aggregate value of credits awarded under this provision cannot exceed $5 million per year. No new credits can be approved after 2020. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.038 Energy-efficient or water-efficient equipment credit Statute 48-7-40.29 Year Enacted 2010 Year Effective January 1 of the year following the year in which federal funds for this program are made available and received by the state Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.027. Description: This tax credit applies to taxpayers who purchase energy-efficient and water conservation equipment. The value of the credit is equal to 25 percent of the cost of the qualified equipment or $2,500, whichever is less. The credit is only available for those tax years in which federal funds are made available to the state for this purpose. Given no federal funding, the state revenue effect is zero. 100 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 0 0 0 Corporate Income Tax Expenditure 0 0 0 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.041 Tax credit for existing business enterprises undergoing qualified business expansion Statute 48-7-40.21 Year Enacted 2001 Year Effective Latest modifications are applicable to tax years beginning on or after January 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.030. Description: This credit applies to businesses that create at least 500 new full-time jobs within a taxable year. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 1.6.013 (m) Denotes a value of less than $1 million. 1.6.043 Bank Tax Credit Statute 48-7-29.7 Year Enacted 2000 Year Effective 2001 Data Source DOR data as of TY 2020 and IBISWorld industry forecasts Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.032. Description: Depository financial institutions are allowed a credit against their state income tax liability equal to the sum of the amount of their business license taxes paid to local governments and any special state occupation taxes paid to the state. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 4 4 4 Corporate Income Tax Expenditure 57 60 63 State Tax Expenditure 61 64 67 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.044 Employer tax credit for hiring qualified parolees Statute 48-7-40.31 Year Enacted 2016 Year Effective 2016 Data Source DOR data as of TY 2020 Estimate Reliability Class A 101 | P a g e Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.033. This credit expired January 1, 2020; remaining carryforwards expire if unused by January 1, 2022. Description: For the period beginning on or after January 1, 2017, and before January 1, 2020, an employer that employs a qualified parolee in a full-time job for at least 40 weeks during a 12-month period shall be eligible for an income tax credit in the amount of $2,500 per year for each qualified parolee. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 0 (m) 0 Corporate Income Tax Expenditure 0 (m) 0 State Tax Expenditure 0 (m) 0 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.045 Income Tax Credit for Contributions to Rural Health Care Organizations Statute 48-7-29.20 Year Enacted 2016 Year Effective 2017 Data Source DOR data for 2021 Estimate Reliability Class A Data Reliability Class A Note This statute was modified in 2017 and 2018 to increase taxpayer limitations and the credit rate, modify the aggregate state cap, and extend the expiration. This statute was modified again in 2019 to extend the expiration. The same estimate is provided in the corporate income tax section, see 2.6.034. Description: An individual taxpayer shall be allowed an income tax credit equal to a maximum of $5,000 for an individual filing a single return or $10,000 for joint returns. A corporation or other entity shall be allowed an income tax credit equal to a maximum of 75 percent of the corporation's income tax liability. The aggregate amount of credits cannot exceed $60 million in any year. The provision expires December 31, 2024. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 49 55 56 Corporate Income Tax Expenditure 5 6 6 State Tax Expenditure 54 61 63 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.046 Revitalization Zone Tax Credit Statute 48-7-40.32 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.035. Description: An income tax credit to promote the revitalization of vacant rural Georgia 102 | P a g e downtowns. The statute includes three credits. The first allows certified entities to claim an annual tax credit for five consecutive years of $2,000 per qualified employee but not to exceed $40,000 per taxable year for any taxpayer. The second provides for a credit equal to 25 percent of the purchase price of qualified property up to an amount equal to $125,000 per project. The third provides for a tax credit of 30 percent of qualified rehabilitation expenses but not to exceed $150,000 per project. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.047 Georgia Musical Investment Tax Credit Statute 48-7-40.33 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data as of TY 2020 Estimate Reliability Class C Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.036. Description: This income tax credit is equal to 15 percent of qualified production expenditures of a musical or theatrical performance, or a recorded musical performance incorporated into or synchronized with a movie, television, or interactive entertainment production. An additional credit equal to 5 percent may be allowed for certain expenditures in tier 1 or tier 2 counties. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 1.6.048 Public Education Innovation Fund Tax Credit Statute 48-7-29.21 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data as of TY 2020 and Fiscal Note for HB 237 LC 33 7049S (2017) Estimate Reliability Class C Data Reliability Class A Note The same estimate is provided in the corporate income section, see 2.6.037. Description: This income tax credit is equal to contributions to a qualified Public Education Innovation fund. The value of the credit varies by personal income filing type from $1,000 to $10,000. Corporate filers are allowed a credit equal to 75 percent of their current income tax liability. The aggregate amount of credits awarded each year may not exceed $5 million. This credit expires December 31, 2023. 103 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.049 Agribusiness Tax Credit Statute 33-1-25 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data as of TY 2020 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the corporate income and insurance premium tax sections, see 2.6.038 and 5.00900. Description: This income tax credit establishes qualified low-income community rural investment funds and tax credits. The credit amount is 15 percent of the eligible investment per year beginning in the third year after the investment is made and continuing through the sixth year, for a total credit equal to 60 percent of the eligible investment. The credit is nonrefundable and may not be sold, but may be carried forward indefinitely. The amount of credits available is subject to a cumulative cap of $100 million. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 2 4 4 Corporate Income Tax Expenditure 1 1 1 Insurance Premium Tax Expenditure 8 9 9 State Tax Expenditure 11 14 14 (m) Denotes a value of less than $1 million 1.6.050 Railroad Track Maintenance Tax Credit Statute 48-7-40.34 Year Enacted 2018 Year Effective 2019 Data Source Fiscal Note for LC 39 2856 (2021) Estimate Reliability Class C Data Reliability Class B Note The same estimate is provided in the corporate income tax section, see 2.6.039. Description: This income tax credit is based on maintenance expenditures related to railroad track owned or leased by Class III railroads. The credit equals 50 percent of railroad track maintenance expenditures, subject to a maximum credit of $3,500 per track mile per year. In addition to Class III railroads, persons transporting property using a Class III railroad's facilities or persons furnishing railroad-related property or services to a Class III railroad are eligible for the credit with respect to maintenance of their assigned track miles. This credit expires December 31, 2026. 104 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 8 7 7 1.6.051 Reforestation credit for losses incurred on commercial timberland due to hurricane Statute 48-7-40.36 Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for HB4EX LC 43 1048S (2018 Special Session) and DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax, see section 2.6.040. Description: Provides for a credit for casualty losses incurred on commercial timberland due to damage attributed to Hurricane Michael in the fall of 2018, subject to replanting requirements as described below. The amount of the credit is equal to 100 percent of the casualty loss deduction reported on the taxpayer's federal return, provided that the credit amount does not exceed $400 per acre. Taxpayers must seek preapproval for the credit on or before December 31, 2019. Taxpayers are eligible to claim the credit in the taxable year in which the taxpayer replants 90 percent of the timber lost in the hurricane. All tax credits must be claimed by December 31, 2024. Credits can be sold once prior to January 1, 2024. Credits claimed are nonrefundable, but can be carried forward for up to 10 years. The total amount of credits preapproved may not exceed $200 million. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 10 12 10 Corporate Income Tax Expenditure 7 8 7 State Tax Expenditure 16 20 16 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.052 Qualified Post-Production Expenditures Credits Statute 48-7-40.26A Year Enacted 2017 Year Effective 2018 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax, see section 2.6.041. Description: Postproduction companies with at least $500,000 in qualified postproduction expenditures per year will be eligible for a credit equal to 20 percent of the qualified postproduction expenditures. An additional 10 percent credit is allowed if the qualified production expenditures were incurred in the state. An additional 5 percent credit is allowed if the qualified production expenditures were incurred in a tier 1 or tier 2 county. The value of credits awarded is limited to a maximum of $10 million for 105 | P a g e 2018 through 2022. If in any year the aggregate amount of credits allowable is not awarded, the remaining credits will be rolled in the allowable credits for the following year. Postproduction companies with expenditures between $100,000 and $500,000 per year are eligible for a separate credit equal to 20 percent of the qualified postproduction expenditures. Aggregate annual claims on this credit are limited to $1 million. The $1 million small company credit limit does not count against the credit limit for the large company credit discussed above. No credits shall be earned in years after 2022. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 5 6 6 Corporate Income Tax Expenditure 1 1 1 State Tax Expenditure 5 7 6 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.054 Medical equipment, medical supplies, pharmaceuticals, and medicine manufacturers job tax credit Statute 48-7-40.1B Year Enacted 2021 Year Effective Taxable years beginning on or after January 1, 2021 Data Source Fiscal Note for HB 587 LC 43 2010S (2021) Estimate Reliability Class A Data Reliability NA Note The same estimate is provided in the corporate income tax, see section 2.6.043. Description: Medical equipment and supply manufacutrers, and pharmaceutical and medicine manufacturers that qualify for the Georgia job tax credit (see 1.6.012/2.6.001/5.00200) may earn $1,250 per for each qualifying new job in addition to the amounts earned under the existing job credit. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 1 2 2 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 1.6.055 Teacher Recruitment and Retention Credit Statute 48-7-29.23 and 20-2-251 Year Enacted 2021 Year Effective Taxable years beginning on or after January 1, 2022 Data Source Fiscal note for HB 32 LC 43 2019S (2021) Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for teachers who agree to teach in certain rural schools or certain low-performing schools in high-need subject areas. The credit amount equals $3,000 per year for up to five consecutive years for teachers who remain employed in qualifying schools. No new applications for the program shall be accepted after December 31, 2026. 106 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million. State Fiscal Years ($ in Millions) 2021 2022 2023 0 0 1 Georgia individual income tax credit expenditures for which an estimate is not currently available Expenditure Statute Summary 1.6.053 48-7-40.1A Personal protective equipment manufacturer job tax credit 107 | P a g e 2. Corporate Income Tax The corporate income tax was first levied in Georgia in 1929. While originally levied at a rate equal to one-third of the federal corporate tax rate, the rate was changed to 4 percent in 1931. The tax has gone through several rate changes since its introduction, including in 1949 when it was temporarily increased to 7.5 percent. The rate was 6 percent from 1969 through 2018, but was reduced to 5.75 percent effective for tax years beginning on or after January 1, 2019. The Georgia corporate income tax is a flat rate tax, with a single rate applying to all Georgia taxable income of the corporation. The starting point for the construction of the tax base is federal taxable income of a corporation. Several adjustments are made in order to determine Georgia business income. For example, although corporations are allowed certain special depreciation deductions at the federal level, some of these deductions are not allowed at the state level. Firms taking these deductions on their federal return must add these deductions back to their tax base when determining their state taxable income. In addition, firms operating in multiple states must apportion their corporate income to each of the states in which they have a legal obligation to pay the tax. Since 2008, firms with multistate income determine the portion of their total income associated with Georgia by computing their total Georgia receipts relative to their total receipts. Prior to 2008, Georgia firms were required to use a three-factor apportionment formula. It is important to keep in mind that tax expenditure estimates may differ from revenue estimates presented in fiscal notes. Estimates included in fiscal notes incorporate behavioral effects that are not considered when estimating tax expenditure provisions. The purpose of a tax expenditure estimate is to convey the cost that would be necessary if the item were offered as a direct budgetary expenditure instead of a reduction in the tax liability. A second caveat concerns the estimates associated with the state corporate credit provisions. Forecasting the value of the revenue loss stemming from the use of these credits is problematic due to the presence of extensive carry forwards in the case of some credits. Because of past credit carry forwards, firms may claim credits on current or future year tax returns that were created in prior years. In some cases, the credit may have expired such that taxpayers are no longer able to create new credits, but the revenue loss to the state continues for several years until all carryforward liabilities have been exhausted. Therefore, the estimates provided in this report should be interpreted as the expected revenue loss stemming from the use of currently created or previously created credits and not an estimate of the value of credits created in a given year. The tax is administered by the Georgia DOR. Corporate tax collections for FY 2020 were $1.2 billion or 4.9 percent of total state tax revenues. Approximately 344 thousand corporate returns were processed in CY 2020. All revenue collected from this tax is deposited into the State General Fund. 108 | P a g e 2.1 Federal Corporate Exclusions 2.1.001 Permanent exemption from imputed interest rules Federal Statute IRC Sections 163(e), 483, 1274, and 1274(A) Description: Debt instruments for amounts not exceeding an inflation adjusted maximum, given in exchange for real property, may not have imputed to them an interest rate greater than 9 percent. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.1.002 Exclusion of interest on state and local government private activity bonds Federal Statute IRC Section 103,141,142 and 146 Description: Interest earned on qualified private activity bonds is tax exempt. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.1.004 Exclusion of earnings of certain environmental settlement funds Federal Statute IRC Section 468B Description: Under certain conditions environmental settlement funds are exempt from tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.1.005 Exclusion of certain agricultural cost-sharing payments Federal Statute IRC Section 126 Description: Grants made for the purpose of conserving soil and water resources or protecting the environment are excluded from the recipient's gross income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.1.006 Exclusion of gain or loss on sale or exchange for brownfield property Federal Statute IRC Section 512 and 514 Description: Qualifying brownfield property that is acquired from an unrelated party, subject to remediation, and sold to another unrelated party is exempt from unrelated business income tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 109 | P a g e 2.1.009 Exclusion of interest on public purpose state and local government bonds Federal Statute IRC Sections 103, 141 and 146 Description: Interest income of qualifying governmental bonds is excluded from taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.1.010 Various foreign provisions including inventory property sales source rule exception, interest expense allocation, deferral of active income of controlled foreign corporations, deferral of active financing income Federal Statute IRC Sections 861-863, 865, 953-954, 864 Description: These provisions provide certain exceptions to the general treatment of foreign sourced income State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 259 308 348 (m) Denotes a value of less than $1 million 2.1.011 Exclusion of employee meals and lodging Federal Statute IRC Section 119 and 132(e)(2) Description: Only 50 percent of expenses for meals provided on or near business premises for the convenience of the employer or as a de minimis fringe is allowed as deduction. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -28 -28 -29 (m) Denotes a value of less than $1 million 2.1.012 Exclusion of employer-paid transportation benefits and employer-provided transit and vanpool benefits. Federal Statute IRC Section 132(f) Description: Employer provided qualified transportation benefits are excluded from employee taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -18 -18 -15 (m) Denotes a value of less than $1 million 110 | P a g e 2.2 Federal Corporate Deductions 2.2.001 Accelerated depreciation (MACRS) Federal Statute IRC Sections 167 and 168 Description: Under the Modified Accelerated Cost Recovery System (MACRS), the cost of tangible depreciation property of certain energy property is allowed a shorter depreciation period. Taxpayers are allowed to depreciate the costs of new rental housing and certain other buildings and equipment on an accelerated schedule State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 8 8 8 (m) Denotes a value of less than $1 million 2.2.002 Deduction of expenditures on energy-efficient commercial building property Federal Statute IRC Section 179D Description: This provision provides a formula-based tax deduction for all or part of the cost of energy-efficient commercial building property placed in service after December 31, 2005 and before January 1, 2014. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.2.003 Expensing of exploration and development costs: nonfuel minerals Federal Statute IRC Sections 263, 291, 616-617, 56, 1254 Description: Firms engaged in mining are permitted to expense certain exploration and development costs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.2.004 Amortization of business start-up costs Federal Statute IRC Section 195 Description: This provision allows a business taxpayer to deduct up to $5,000 in qualified start-up expenditures. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 2.2.005 Expensing of research and experimental expenses Federal Statute IRC Section 174 and 59e Description: This provision allows a business taxpayer to deduct certain research 111 | P a g e expenditures that are paid or incurred in connection with the taxpayer's trade or business. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 3 0 (m) Denotes a value of less than $1 million 2.2.006 Expensing of magazine circulation expenditures Federal Statute IRC Section 173 Description: In general, current federal tax law allows publishers of newspapers, magazines, and other periodicals to deduct their expenditures to maintain, establish, or increase circulation in the year in which they are made. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.2.007 Deductions of oil and gas exploration and development costs Federal Statute IRC Sections 611, 612, 613, 613A and 291; 263(c), 616-617, 57(a)(2), 59(e) and 1254 Description: Firms that extract oil, gas or, other minerals are permitted a deduction to recover their capital investment in a mineral reserve, which depreciates due to the physical and economic depletion or exhaustion as the mineral is recovered. Firms engaged in the exploration and development of oil, gas or geothermal properties have the option of expensing certain intangible drilling and development costs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 2.2.008 Special treatment of expenses related to timber production Federal Statute IRC Sections 194, 263A(c)(5) Description: This provision allows expensing of production costs of growing timber. Taxpayers are also allowed different depreciation practices for qualified reforestation expenses. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 2.2.009 Deduction of charitable contributions (includes deductions for health, education, and for purposes other than health and education) Federal Statute IRC Sections 170 and 642(c) Description: Subject to certain limitations, charitable contributions may be deducted by taxpayers. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 43 43 42 (m) Denotes a value of less than $1 million 112 | P a g e 2.2.011 Expensing under IRC Section 179 of depreciable business property Federal Statute IRC Section 179 Description: Within certain limits, a taxpayer may elect to deduct, as a current expense, the cost of qualifying property in the tax year when it is placed in service State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 7 8 (m) Denotes a value of less than $1 million 2.2.012 Amortization of air pollution control facilities Federal Statute IRC Section 169(d)(5) Description: This provision allows plants placed in service after January 1, 1976 the option of amortizing investments in pollution control equipment for coal- fired electric generation plants. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 3 (m) Denotes a value of less than $1 million 2.2.014 Various agricultural expensing provisions Federal Statute IRC Section 162, 175, 180, 446, 448, 461, 464 Description: Taxpayers in the business of farming may choose to expense costs associated with soil and water conservation, soil conditioning and the costs associated with raising dairy cattle and breeding cattle. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.2.015 Community and regional development incentives Federal Statute IRC Sections 38(b), 39(d), 45A, 280C(a), 1391-1397D and 1400F,H,I and J Description: Communities designated as empowerment zones and renewable communities are eligible for special development incentives. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) 0 (m) Denotes a value of less than $1 million 2.2.016 Expensing to remove architectural and transportation barriers to the handicapped and elderly Federal Statute IRC Section 190 Description: This provision allows taxpayers to deduct up to $15,000 of expenses incurred in a single year for removing physical barriers to handicap or elderly individuals in qualified facilities or public transportation vehicles owned or leased by the taxpayer. 113 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 2.2.017 Inventory methods and valuation Federal Statute IRC Section 475, 491-492 Description: This provision allows taxpayers to use alternative inventory systems to determine the cost of goods sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 6 6 (m) Denotes a value of less than $1 million 2.2.018 Limits on deductible compensation and disallowance of deduction for excess parachute payments Federal Statute IRC Sections 280G, 4999, and 162(m) Description: Excess parachute payments are not allowable deductions against the corporate income tax. In the case of publicly held corporations only executive compensation of $1 million or less is deductible against the corporate income tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -11 -11 -10 (m) Denotes a value of less than $1 million 2.2.019 Deduction for foreign-derived intangible income Federal Statute P.L. 115-97, Sec. 250(a) Description: A domestic corporation is allowed a deduction equal to 50 percent of foreign-derived intangible income until 2025 and 37.5 percent thereafter. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 45 63 81 (m) Denotes a value of less than $1 million 2.2.020 Limitation on deduction of FDIC premium Federal Statute Pub. L. No. 115-97 Description: The deduction for the applicable percentage of any Federal Deposit Insurance Corporation ("FDIC") premium paid or incurred by the taxpayer is disallowed. For taxpayers with total consolidated assets of $50 billion or more, the applicable percentage is 100 percent. Otherwise, the applicable percentage is the ratio of the excess of total consolidated assets (as of the close of the taxable year) over $10 billion to $40 billion. The provision does not apply to taxpayers with total consolidated assets (as of the close of the taxable year) that do not exceed $10 billion. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -10 -10 -10 (m) Denotes a value of less than $1 million 114 | P a g e 2.2.021 Limitation on NOL deduction Federal Statute Pub. L. No. 115-63 Description: The deduction for net operating losses is limited to 80 percent of taxable income. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure -4 -5 -6 (m) Denotes a value of less than $1 million 2.2.022 7-year recovery period for motorsports entertainment complexes Federal Statute IRC Sections 167 and 168 Description: Taxpayers are allowed to deduct the cost of certain depreciable assets from motorsports complexes over 7 years. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 115 | P a g e 2.3 Special Federal Corporate Conformity Provisions 2.3.001 Deferral of gain on like-kind exchanges Federal Statute IRC Section 1031 Description: When business or investment property is exchanged for property of a like kind no gain or loss is recognized on the exchange and therefore no tax is paid at the time of the exchange. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 11 12 12 (m) Denotes a value of less than $1 million 2.3.002 Special rules for magazine, paperback book, and record returns Federal Statute IRC Section 458 Description: Publishers and distributors of magazines, paperbacks, and records may elect to exclude from gross income for a tax year, the income from the sale of goods that are returned after the close of the tax year. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.3.003 Two-year carryback for net operating losses attributable to farming Federal Statute IRC Section 172 Description: Current law provides a two-year carryback period for losses related to farming. The normal carryback period for losses is two years. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.3.004 Special rules for mining reclamation reserves Federal Statute IRC Section 468 and 1274 Description: Electing taxpayers may deduct the current value equivalent of certain estimated future reclamation and closing costs for mining and solid waste disposal sites. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.3.005 Cash accounting, for certain businesses Federal Statute IRC Sections 446 and 448 Description: The cash method of accounting may be used by any business taxpayer that is not a tax shelter and falls into at least one of three specified categories. These are farming businesses, qualified personal service corporations, and entities that meet a gross receipts test. 116 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 5 4 3 2.3.006 Deferral of gain on non-dealer installment sales Federal Statute IRC Sections 453 and 453A(b) Description: Some taxpayers are allowed to report some sales using the installment method of accounting in which the gross profit from the sale is prorated over the years during which the payments are received. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 19 20 21 (m) Denotes a value of less than $1 million 2.3.007 Completed contract rules Federal Statute IRC Section 460 Description: Some taxpayers with construction or manufacturing contracts extending for more than one tax year are allowed to report some or all of the profit on the contracts under special accounting rules rather than the normal rules of tax accounting. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 5 5 (m) Denotes a value of less than $1 million 2.3.008 Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain employee stock plans) Federal Statute IRC Sections 401(a)(28), 404(a)(9), 404(k), 415(c)(6), 512(e), 1042, 497(e)(7), 4975(d)(3), 4978, 4979A Description: ESOPs are provided special tax treatment. Employer contributions may be deducted as a business expense. In addition, some contributions are subject to less restrictive limits than contributions to other employee benefit plans. Tax on qualified employee stock purchase plans are not taxed when granted or excised. Tax is deferred until stock is sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) 1 2 (m) Denotes a value of less than $1 million 2.3.009 Deferral of capital construction costs of shipping companies Federal Statute IRC Section 7518 Description: U.S. operators of vessels in foreign, or domestic commerce of the U.S., or in U.S. fisheries, may establish a capital construction fund into which they may make certain tax deductible deposits. In addition, the earnings on the deposits are tax deferred. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 117 | P a g e 2.3.010 Qualified Opportunity Zones Federal Statute PL 115-97; IRS 1400Z-1 Description: A qualified opportunity fund is an investment vehicle organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property that holds at least 90 percent of its assets in qualified opportunity zone property. Qualified opportunity zone property includes any qualified opportunity zone stock, any qualified opportunity zone partnership interest, and any qualified opportunity zone business property. Certain low-income community population census tracts may be designated as qualified opportunity zones by the chief executive officer of the State (which includes the District of Columbia). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 7 8 (m) Denotes a value of less than $1 million 2.3.011 Expensing rules for certain productions Federal Statute IRC Section 181 Description: A taxpayer may elect to treat the cost, up to a maximum of $15 million ($20 million in some areas) for any production, of any qualified film, television, or live theatrical production commencing production prior to Jan. 1, 2026, as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 2.3.012 Special rules for interest-charge domestic international sales corporations (IC-DISC) Federal Statute IRC Sections 991-997 Description: Shareholders of Interest-Charge Domestic International Sales Corporation are taxed only once. IC-DISC shareholders may defer up to $10 million annually that is attributable to qualified export sales. An interest charge is imposed on shareholders based on the distribution that would have occurred had deferral not been elected. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 8 10 (m) Denotes a value of less than $1 million 118 | P a g e 2.4 Corporate Apportionment Discussed below are three issues relating to corporate apportionment that can be considered tax expenditures because they are deviations from the traditional formula of corporate apportionment and result in a benefit to some taxpayers. No estimate of the value of these expenditures is available at this time. 2.4.001 Single-Factor Apportionment Corporate income earned in Georgia is apportioned using a single-factor apportionment formula. With single-factor apportionment, firms determine state tax liability based solely on the ratio of Georgia receipts to total receipts. The traditional apportionment formula involves the use of three Georgia-total ratios: property, payroll, and receipts. With the three-factor formula, the firm applies a weight of 33.33 percent to each ratio. The single-factor formula benefits firms that have manufacturing presence in one state but significant sales outside of the state. Firms that are located and operate in a single state are not affected by the apportionment formula. 2.4.002 Throwback Rule Under a throwback rule, out-of-state sales from a corporation are taxed by the state of origin if the corporation has no nexus in the destination state. At least 25 states have a throwback rule. Georgia, North Carolina, Florida, Tennessee, South Carolina, and Virginia do not, but Alabama does. An alternative rule is the "throw-out rule," which eliminates sales to non-nexus states from both the numerator and denominator of the apportionment formula of a corporation. Georgia does not have a throw-out rule. 2.4.003 Corporate Receipts Sourcing Georgia is among 16 states that apportions multistate corporate income based only on gross receipts, (i.e. a 100-percent sales factor). This creates a destination-based corporate income tax system. Under this approach, corporations pay taxes based on the state in which their products are sold, not where production takes place. This rule applies to the sale of tangible property. When considering apportionment for services provided across state lines, Georgia employs a market-based sourcing rule. At the present, there is no consensus between the states on how to define a "market" for the purpose of implementing this rule but, in general, it means that services will be taxed based on the state in which the customer receives the benefit. The rule is meant to apply a consistent destination-based treatment to services when compared to tangible goods. Corporate apportionment expenditures for which an estimate is not currently available Expenditure Statute Summary 2.4.001 N/A Single-factor Apportionment 2.4.002 N/A Throwback Rule 2.4.003 N/A Corporate Receipts Sourcing 119 | P a g e 2.5 Georgia Deductions 2.5.003 Exclusion of global intangible low-taxed income (GILTI) Statute 48-7-21 Year Enacted 2018 Year Effective 2018 Data Source Estimate Reliability Data Reliability Note Description: Global intangible low-taxed income is defined for the purpose of Federal taxation in Section 951A of the Internal Revenue Code of 1986 as excess returns realized by U.S. shareholders from controlled foreign corporations in low-tax areas outside of the United States. GILTI is includable in federal taxable income net of a 50 percent deduction in tax years 2018-25 and a 37.5 percent deduction thereafter. Georgia does not tax any portion of GILTI. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 153 182 212 (m) Denotes a value of less than $1 million Corporate deduction expenditures for which an estimate is not currently available Expenditure Statute Summary 2.5.001 48-7-21 Interest on obligations of United States 2.5.002 48-7-21 Exception to intangible expenses and related interest cost 120 | P a g e 2.6 Georgia Credits 2.6.001 Georgia Job Tax Credit Statute 48-7-40 and 48-7-40.1 Year Enacted 48-7-40: 1989; 48-7-40.1: 1993 Year Effective 48-7-40: Taxable years beginning on or after January 1, 1990; 48-7-40.1: Taxable years beginning on or after January 1, 1994. Data Source DOR data as of 2020 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax and insurance premium tax sections, see 1.6.012 and 5.00200. In 2018, the qualifying areas were expanded to include counties with military bases and industrial parks that are owned and operated by a government entity. Description: The credit provides a statewide job tax credit to any business or headquarters engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development. Retail establishments are only allowed the credit if located in one of the 40 least-developed counties of the state. Average wages must be greater than the average wage of the county in the state with the lowest average wage. To be eligible, employers must offer health insurance to all new employees. It also provides a tax credit for business enterprises designated as operating in less-developed areas. These include areas with ten or more contiguous census tracts with higher than 15 percent poverty and counties with both a military base and a government owned and operated industrial park. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 23 27 28 Corporate Income Tax Expenditure 131 157 160 Insurance Premium Tax Expenditure 7 7 7 State Tax Expenditure 160 191 194 2.6.002 Quality Jobs Tax Credit Statute 48-7-40.17 Year Enacted 2009 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note This statute was modified in 2017 allowing taxpayers to establish subsequent job creation periods for a qualified project. The same estimate is provided in the personal income tax section, see 1.6.013. Estimate of this provision is higher than in previous reports because new data are available. Description: This credit is for employers creating new high-wage jobs or relocating 121 | P a g e high-wage jobs into the state. A quality job or high-wage job has 30 hours a week of regular work; a job that is not already located in Georgia; and pays at or above 110 percent of the average wage of the county in which it is located. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 94 92 94 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 96 94 96 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.003 New Facilities Jobs Credit Statute 48-7-40.24 Year Enacted 2003 Year Effective Latest modifications are effective for taxable years beginning on or after July 1, 2021 Data Source Fiscal note for HB 587 LC 43 1970S for 2021 Estimate Reliability NA Data Reliability NA Note The same estimate is provided in the personal income tax section, see 1.6.014. Description: This provision provides for a credit of $5,250 per year per qualified new job for up to five years, subject to recapture based on job and payroll maintenance requirements, and until July 1, 2021, limited to 4,500 such new jobs for any one qualified project. For business enterprises that first qualify in a taxable year beginning on or after January 1, 2009, the business enterprise must meet the job creation requirement of 1,800 eligible new full-time employees and either the qualified investment requirement of $450 million in qualified investment property, or the payroll requirement of $150 million in total annual Georgia W-2 reported payroll within the six- year period, subject to extension under certain conditions. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 2.6.001 (m) Denotes a value of less than $1 million. 2.6.004 New Manufacturing Facilities Property Credit Statute 48-7-40.25 Year Enacted 2003 Year Effective Latest modifications are effective for taxable years beginning on or after July 1, 2021 Data Source Fiscal note for HB 587 LC 43 1970S for 2021 Estimate Reliability NA Data Reliability NA Note Utilization of this credit resulting from known or anticipated projects is expected to be material, but not within the time horizon of this report; see fiscal note. The same estimate is provided in the personal income tax section, see 1.6.015. Description: This is an incentive for a manufacturer who has operated a manufacturing 122 | P a g e facility in this state for at least 3 years and who spends $800 million on a new manufacturing facility in this state, subject to a job requirement of 1,800 full-time employees. The credit equal to 6 percent of the cost of all qualified investment property purchased or acquired, up to $50 million with respect to any one project. For qualified high-impact aerospace defense projects certified on or after July 1, 2021, the maximum credit for any one project is increased to $100 million and the taxpayer may begin claiming credits once investment and job threshholds of $500 million and 1,000, respectively, are reached. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million. 2.6.005 Manufacturer's Investment Tax Credit Statute 48-7-40.2, 48-7-40.3, and 48-7-40.4 Year Enacted 1994 Year Effective Taxable years beginning on or after January 1, 1994 Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.016. Description: For tax years beginning on or after January 1, 2020, the taxpayer must invest a minimum of $100,000 per project per location during the tax year to receive credit, up from a $50,000 minimum ir prior years. Eligible taxpayers must be in operation for the immediately preceding three years. Property for a period of five years or longer is eligible for the credit. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 11 16 14 Corporate Income Tax Expenditure 49 69 58 State Tax Expenditure 60 85 72 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.006 Optional Investment Tax Credit Statute 48-7-40.7, 48-7-40.8, and 48-7-40.9 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996. Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see1.6.017. Description: An alternative investment tax credit available for investments in manufacturing or telecommunications facilities or support facilities that have been operating for the three immediately preceding years. The credit is available for investments in excess of $5 million and placed in service no earlier than January 1, 1996, for tier 1 counties. The investment threshold is $10 million for tier 2 counties and is $20 million for tier 3 and 4 counties. 123 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 1 1 1 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.007 Port Activity Tax Credit Statute 48-7-40.15 Year Enacted 1998 Year Effective Latest modifications apply to taxable years beginning on or after January 1, 2010 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note Estimate combined with 2.6.008. The same estimate is provided in the personal income tax section, see 1.6.018. Description: For taxable years beginning before January 1, 2010, businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development that have increased shipments out of Georgia ports during the previous 12-month period by more than 10 percent over their 1997 base year port traffic, or by more than 10 percent over 75 net tons, five containers or 10 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. For taxable years beginning on or after January 1, 2010, the increase is based on a comparison of the previous 12-month period to the second preceding 12-month period. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 4 5 5 State Tax Expenditure 4 5 5 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.008 Alternative Port Activity Tax Credit Statute 48-7-40.15A Year Enacted 2009 Year Effective 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note Estimate combined with 2.6.007. The same estimate is provided in the personal income tax section, see 1.6.019. Description: Credit is allowed to any business enterprise located in a tier 2 or 3 county or in a less developed area and which qualifies and receives the Jobs Tax Credit and which; 1. Consists of a distribution facility of greater than 650,000 square feet in operation in this state prior to December 31, 2008; 2. Distributes product to retail stores owned by the same legal entity or its 124 | P a g e subsidiaries as such distribution facility; and 3. Has a minimum of eight retail stores in this state in the first year of operations. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 2.6.007 (m) Denotes a value of less than $1 million. 2.6.009 Film Tax Credit Statute 48-7-40.26 Year Enacted 2005 Year Effective Taxable years beginning on or after January 1, 2005 Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.020. Tax credit provisions applicable to qualified interactive entertainment production companies were modified in 2015. Description: Production companies which have at least $500,000 of qualified expenditures in a state-certified production may claim this credit. Certification must be approved through the Georgia Department of Economic Development. There are special provisions relating to the tax credits awarded to interactive entertainment companies. Under the 2017 modifications to this statute, the 2019 sunset for the qualified interactive entertainment production company tax credit has been eliminated. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 462 543 609 Corporate Income Tax Expenditure 298 350 393 State Tax Expenditure 760 894 1,002 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.010 Research Tax Credit Statute 48-7-40.12 Year Enacted 1997 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.021. Description: This credit is for expenses resulting from research conducted in Georgia by businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. A tax credit is allowed provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended. 125 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 17 17 18 Corporate Income Tax Expenditure 170 177 183 State Tax Expenditure 187 194 201 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.011 Seed-Capital Fund Credit Statute 48-7-40.27 & 40.28 Year Enacted 2008 Year Effective Applicable to investments made on or after July 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.022. Description: This provides a tax credit for certain qualified investments made on or after July 1, 2008, in a research fund, the purpose of which is to provide early- stage financing for businesses formed as a result of research conducted in Georgia's research universities. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.012 Qualified Health Insurance Expense Credit Statute 48-7-29.13 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.023. Description: Employer credit for the premiums paid for a high-deductible health plan. Employers must employ 50 or fewer persons for whom the employer provides high-deductible health plans as defined by Section 223 of the Internal Revenue Code and in which such employees are enrolled. The qualified health insurance must be made available to all employees and compensated individuals of the employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The qualified health insurance premium expense must equal at least $250 annually. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 126 | P a g e 2.6.015 Business Enterprise Vehicle Credit Statute 48-7-40.22 Year Enacted 2001 Year Effective Taxable years beginning on or after January 1, 2002. Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.026. Description: This is a credit given to a business enterprise for the purchase of a motor vehicle that is used exclusively to provide transportation for its employees. To qualify, a business enterprise must certify that each vehicle carries an average daily ridership of not less than four employees for an entire taxable year. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.016 Employer's credit for providing or sponsoring child care for employees, and employer's credit for purchasing child-care property Statute 48-7-40.6 Year Enacted 1994 & 1999 Year Effective Credit for cost of operation: taxable years beginning on or after January 1, 1994. Credit for cost of qualified child-care property: taxable years beginning on or after January 1, 2000. Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.027. Description: This credit is provided to employers based on their expenses related to providing or sponsoring child care for their employees' children and for the purchase of qualified child-care property. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 6 6 6 Corporate Income Tax Expenditure 11 12 12 State Tax Expenditure 17 18 18 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.017 Low-Income Housing Credit Statute 48-7-29.6 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data as of TY 2020 Estimate Reliability Class B 127 | P a g e Data Reliability Class A Note The same estimate is provided in the personal income tax and insurance premium tax sections, see 1.6.028 and 5.00700. Description: This is a credit against Georgia income and insurance premium taxes for owners of rental housing qualifying for the federal low-income housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 92 95 99 Corporate Income Tax Expenditure 31 32 33 Insurance Premium Tax Expenditure 163 167 174 State Tax Expenditure 286 294 306 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.018 Historic Rehabilitation Credit Statute 48-7-29.8 Year Enacted 2002 Year Effective Taxable years beginning on or after January 1, 2004 Data Source DOR data as of TY 2020 and Fiscal Note for HB 469 LC 43 2035S (2021) Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the personal income tax section, see 1.6.029. This provision expires December 31, 2022. Description: A credit is provided based on expenses related to the certified rehabilitation of a certified structure or historic home. Standards set by the Georgia Department of Natural Resources must be met. A $25 million per calendar year aggregate cap applies to projects earning more than $300,000 in credits. The credit was modified in 2015 to allow unused credits to be assigned or sold to other taxpayers. Further modifications in 2021 applied a $5 million per calendar year cap on smaller projects and added a sunset date for the credit of December 31, 2022. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 11 14 14 Corporate Income Tax Expenditure 4 4 4 State Tax Expenditure 15 18 19 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.020 Low- and Zero-emission Vehicle and Charger Credit Statute 48-7-40.16 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax, see 1.6.031. Description: This credit applies to the purchase or lease of an electric vehicle charger 128 | P a g e and to the conversion of a standard vehicle to a low- or zero-emission vehicle. The credit for the purchase or lease of a new low- or zero-emission vehicle was eliminated effective July 1, 2015. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.021 Land Conservation Credit Statute 48-7-29.12 Year Enacted 2006 Year Effective Taxable years beginning on or after January 1, 2006 Data Source DOR data as of TY 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.032. Description: This provides for an income tax credit for the qualified donation of real property that qualifies as conservation land pursuant to Chapter 22 of O.C.G.A. Title 36. This credit was modified in 2015 such that the aggregate value of credits awarded under this provision cannot exceed $30 million per year and no new credit applications will be accepted after December 31, 2021. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 4 4 3 Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure 4 4 3 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.024 Employer's Credit for Approved Employee Retraining Statute 48-7-40.5 Year Enacted 1994 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.035. Description: The tax credit reimburses employers for the cost of providing retraining services to their employees. As of January 1, 2009, retraining programs shall not include any retraining on commercially mass-produced software packages for word processing, data base management, presentations, spreadsheets, e-mail, personal information management, or computer operating systems except a retraining tax credit shall be allowable for those providing support or training on such software. 129 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 16 17 18 Corporate Income Tax Expenditure 29 32 33 State Tax Expenditure 45 50 50 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.025 Qualified Education Expense Credit Statute 48-7-29.16 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.036. Description: This provides a tax credit for donations made by taxpayers to a student scholarship organization which are used for tuition and fees for a qualified school or program. Annual cap increased to $100 million effective January1, 2019. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 45 55 60 Corporate Income Tax Expenditure 17 21 23 State Tax Expenditure 62 75 83 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.027 Energy-Efficient or Water-Efficient Equipment Credit Statute 48-7-40.29 Year Enacted 2010 Year Effective January 1 of the year following the year in which federal funds for this program are made available and received by the state Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.038. Description: This tax credit applies to taxpayers who purchase energy-efficient and water-conservation equipment. The value of the credit is equal to 25 percent of the cost of the qualified equipment or $2,500, whichever is less. The credit is only available for those tax years in which federal funds are made available to the state for this purpose. Given no federal funding, the state revenue effect is zero. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 0 0 0 Corporate Income Tax Expenditure 0 0 0 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 130 | P a g e 2.6.030 Tax credit for existing business enterprises undergoing qualified business expansion Statute 48-7-40.21 Year Enacted 2001 Year Effective Latest modifications are applicable to tax years beginning on or after January 1, 2008 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.041. Description: This credit applies to businesses that create at least 500 new full-time jobs within a taxable year. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 2.6.002 (m) Denotes a value of less than $1 million. 2.6.032 Bank Tax Credit Statute 48-7-29.7 Year Enacted 2000 Year Effective 2001 Data Source DOR data as of TY 2020 and IBISWorld industry forecasts Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.043. Description: Depository financial institutions are allowed a credit against their state income tax liability equal to the sum of the amount of business license taxes paid to local governments and any special state occupation taxes paid to the state. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 4 4 4 Corporate Income Tax Expenditure 57 60 63 State Tax Expenditure 61 64 67 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.033 Employer tax credit for hiring qualified parolees Statute 48-7-40.31 Year Enacted 2016 Year Effective 2016 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.044. This credit expired January 1, 2020; remaining carryforwards expire if unused by January 1, 2022. Description: For the period beginning on or after January 1, 2017, and before January 1, 2020, an employer that employs a qualified parolee in a full-time job for at least 40 weeks during a 12-month period shall be eligible for an income tax 131 | P a g e credit in the amount of $2,500 per year for each qualified parolee. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 0 (m) 0 Corporate Income Tax Expenditure 0 (m) 0 State Tax Expenditure 0 (m) 0 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.034 Income Tax Credit for Contributions to Rural Health Care Organizations Statute 48-7-29.20 Year Enacted 2016 Year Effective 2017 Data Source DOR data for 2021 Estimate Reliability Class A Data Reliability Class A Note This statute was modified in 2017 and 2018 to increase taxpayer limitations and the credit rate, modify the aggregate state cap, and extend the expiration. This statute was modified again in 2019 to extend the expiration. The same estimate is provided in the corporate income tax section, see 2.6.034. Description: An individual taxpayer shall be allowed an income tax credit equal to a maximum of $5,000 for an individual filing a single return or $10,000 for joint returns. A corporation or other entity shall be allowed an income tax credit equal to a maximum of 75 percent of the corporation's income tax liability. The aggregate amount of credits cannot exceed $60 million in any year. The provision expires December 31, 2024. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 49 55 56 Corporate Income Tax Expenditure 5 6 6 State Tax Expenditure 54 61 63 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.035 Revitalization Zone Tax Credit Statute 48-7-40.32 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data for 2020 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the personal income section, see 1.6.046. Description: This income tax credit is to promote the revitalization of vacant rural Georgia downtowns. The statute includes three credits. The first allows certified entities to claim an annual tax credit for five consecutive years of $2,000 per qualified employee but not to exceed $40,000 per taxable year for any taxpayer. The second provides for a credit equal to 25 percent of the purchase price of qualified property up to an amount equal to $125,000 per project. The third provides for a tax credit of 30 percent of qualified rehabilitation expenses but not to exceed $150,000 per project. 132 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million. State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 2.6.036 Georgia Musical Investment Tax Credit Statute 48-7-40.33 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018 Data Source DOR data as of TY 2020 Estimate Reliability Class C Data Reliability Class A Note The same estimate is provided in the personal income tax section, see 1.6.047. Description: This income tax credit is equal to 15 percent of qualified production expenditures of a musical or theatrical performance, or a recorded musical performance incorporated into or synchronized with a movie, television, or interactive entertainment production. An additional credit equal to 5 percent may be allowed for certain expenditures in tier 1 or tier 2 counties. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. 2.6.037 Public Education Innovation Fund Tax Credit Statute 48-7-29.21 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018. Data Source DOR data as of TY 2020 and Fiscal Note for HB 237 LC 33 7049S (2017) Estimate Reliability Class C Data Reliability Class A Note The same estimate is provided in the personal income section, see 1.6.048. Description: This income tax credit is equal to contributions to a qualified Public Education Innovation fund. The value of the credit varies by personal income filing type from $1,000 to $10,000. Corporate filers are allowed a credit equal to 75 percent of their current income tax liability. The aggregate amount of credits awarded each year may not exceed $5 million. This credit expires December 31, 2023. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.038 Agribusiness Tax Credit Statute Year Enacted 33-1-25 2017 133 | P a g e Year Effective Taxable years beginning on or after January 1, 2018 Data Source DOR data as of TY 2020 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the personal income and insurance premium tax sections, see 1.6.049 and 5.00900. Description: This income tax credit is to establish qualified low-income community rural investment funds and tax credits. The credit amount is 15 percent of the eligible investment per year beginning in the third year after the investment is made and continuing through the sixth year, for a total credit equal to 60 percent of the eligible investment. The credit is nonrefundable and may not be sold, but may be carried forward indefinitely. The amount of credits available is subject to a cumulative cap of $100 million. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 2 4 4 Corporate Income Tax Expenditure 1 1 1 Insurance Premium Tax Expenditure 8 9 9 State Tax Expenditure 11 14 14 (m) Denotes a value of less than $1 million. 2.6.039 Railroad Track Maintenance Tax Credit Statute 48-7-40.34 Year Enacted 2018 Year Effective 2019 Data Source Fiscal Note for LC 39 2856 (2021) Estimate Reliability Class C Data Reliability Class B Note The same estimate is provided in the personal income tax section, see 1.6.050. Description: This income tax credit is based on maintenance expenditures related to railroad track owned or leased by Class III railroads. The credit equals 50 percent of railroad track maintenance expenditures, subject to a maximum credit of $3,500 per track mile per year. In addition to Class III railroads, persons transporting property using a Class III railroad's facilities or persons furnishing railroad-related property or services to a Class III railroad are eligible for the credit with respect to maintenance of their assigned track miles. This credit expires December 31, 2026. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 8 7 7 (m) Denotes a value of less than $1 million 2.6.040 Reforestation credit for losses incurred on commercial timberland due to hurricane damage Statute 48-7-40.36 Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for HB4EX LC 43 1048S (2018 Special Session) and DOR data as of TY 2020 Estimate Reliability Class B 134 | P a g e Data Reliability Class A Note The same estimate is provided in the personal income tax, see section 1.6.051. Description: Provides for a credit for casualty losses incurred on commercial timberland due to damage attributed to Hurricane Michael in the fall of 2018, subject to replanting requirements as described below. The amount of the credit is equal to 100 percent of the casualty loss deduction reported on the taxpayer's federal return, provided that the credit amount does not exceed $400 per acre. Taxpayers must seek preapproval for the credit on or before December 31, 2019. Taxpayers are eligible to claim the credit in the taxable year in which the taxpayer replants 90 percent of the timber lost in the hurricane. All tax credits must be claimed by December 31, 2024. Credits can be sold once prior to January 1, 2024. Credits claimed are nonrefundable, but can be carried forward for up to 10 years. The total amount of credits preapproved may not exceed $200 million. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 10 12 10 Corporate Income Tax Expenditure 7 8 7 State Tax Expenditure 16 20 16 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.041 Qualified Post-Production Expenditures Credits Statute 48-7-40.26A Year Enacted 2017 Year Effective 2018 Data Source DOR data as of TY 2020 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax, see section 1.6.052. Description: Postproduction companies with at least $500,000 in qualified postproduction expenditures per year will be eligible for a credit equal to 20 percent of the qualified postproduction expenditures. An additional 10 percent credit is allowed if the qualified production expenditures were incurred in the state. An additional 5 percent credit is allowed if the qualified production expenditures were incurred in a tier 1 or tier 2 county. The value of credits awarded is limited to a maximum of $10 million for 2018 through 2022. If in any year the aggregate amount of credits allowable is not awarded, the remaining credits will be rolled in the allowable credits for the following year. Postproduction companies with expenditures between $100,000 and $500,000 per year are eligible for a separate credit equal to 20 percent of the qualified postproduction expenditures. Aggregate annual claims on this credit are limited to $1 million. The $1 million small company credit limit does not count against the credit limit for the large company credit discussed above. No credits shall be earned in years after 2022. 135 | P a g e State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 5 6 6 Corporate Income Tax Expenditure 1 1 1 State Tax Expenditure 5 7 6 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding 2.6.043 Medical equipment, medical supplies, pharmaceuticals, and medicine manufacturers job tax credit Statute 48-7-40.1B Year Enacted 2021 Year Effective Taxable years beginning on or after January 1, 2021 Data Source Fiscal Note for HB 587 LC 43 2010S (2021) Estimate Reliability Class A Data Reliability NA Note The same estimate is provided in the personal income tax, see section 1.6.054. Description: Medical equipment and supply manufacutrers, and pharmaceutical and medicine manufacturers that qualify for the Georgia job tax credit (see 1.6.012/2.6.001/5.00200) may earn $1,250 per for each qualifying new job in addition to the amounts earned under the existing job credit. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 1 2 2 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million. Numbers may not sum due to rounding Georgia corporate tax credit expenditures for which an estimate is not currently available Expenditure Statute 2.6.042 48-7-40.1A Summary Personal protective equipment manufacturer job tax credit 136 | P a g e 3. Corporate Net Worth Tax Georgia imposes a tax on the net worth of corporations doing business or owning property in the state. The net worth of foreign corporations subject to the Georgia tax is based upon the ratio of assets in Georgia and gross receipts in Georgia to total assets and gross receipts. The tax is graduated based upon the taxable net worth of the corporation. The tax is administered by the Georgia DOR. Revenues from this tax totaled $52.6 million in FY 2020. All revenues from this tax are deposited into the State General Fund. 3.003 Exemption for corporations with net worth of $100,000 or less Statute 48-13-71 Year Enacted 2017 Year Effective Tax years beginning on or after January 1, 2018 Data Source Fiscal Note SB 133/LC 40 1296 for 2017 Estimate Reliability Class A Data Reliability Class A Note Description: The statute increases the threshold net worth value with regards to the Net Worth tax. Corporations with net worth equal to $100,000 or less are exempted from the net worth tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 5 5 (m) Denotes a value of less than $1 million Corporate net worth tax expenditures for which an estimate is not currently available Expenditure Statute Summary 3.001 48-13-72 Exemption for nonprofit corporations 3.002 48-13-72 Exemption for insurance companies separately taxed 137 | P a g e 4. Sales and Use Tax The sales and use tax was first enacted in Georgia in 1951 at a rate of 3 percent. The rate was increased to its current rate of 4 percent in 1989. The sales tax base consists of retail sales, leases, rentals, use or consumption of tangible personal property. In addition to the state sales tax, local governments are authorized to impose an assortment of local option sales taxes. In most counties, the local sales taxes imposed consist of a combination of a Local Option Sales Tax (LOST), Special Purpose Local Option Sales Tax (SPLOST) and/or an Educational Special Purpose Local Option Sales Tax (E-SPLOST) with tax rates of 1 percent for each. A total of 96 counties plus the city of Atlanta have also implemented a sales tax dedicated to transportation purposes (T-SPLOST) as of October 2020, with tax rates of 1 percent except for Atlanta and Fulton County outside of Atlanta where the T-SPLOST rates are 1.4 and 0.75 percent respectively. In addition, Atlanta levies another 1 percent sales tax to cover expenses related to sewer repairs, two counties levy a 1 percent Homestead Option Sales Tax (HOST), and three counties and the city of Atlanta levy sales taxes dedicated to funding the Metropolitan Atlanta Rapid Transit Authority (MARTA), with rates of 1 percent except in Atlanta where the rate is 1.5 percent. In general, the local tax base is consistent with the state sales tax base, which is defined to include mainly tangible personal property. The major exception is food for home consumption, which is included in the local sales tax base, but is exempted from the state tax. Services, with a few exceptions, are generally excluded from both the state and the local tax base. This report provides estimates of some services that are implicitly exempt from the sales tax by virtue of not being tangible personal property. Lastly, this report categorizes each sales tax expenditure by type to allow the reader to distinguish between tax expenditures, such as those for business inputs, that are provided for reasons of reducing economic distortions from those provided on the basis of more societal reasons. The tax is administered by the Georgia DOR. The sales tax is remitted to the Georgia DOR by the retailer and the use tax is remitted by the consumer in cases where the retailer does not collect and remit sales tax. In FY 2020, the state sales and use tax generated $6.2 billion in state revenues and accounted for approximately 26.0 percent of total state tax revenues. All proceeds from the state sales and use tax, net of vendor compensation, are deposited into the State General Fund. 138 | P a g e 4.0-4.3 Sales and Use Tax Exemptions 4.00400 Sales of transportation furnished by a county or municipal public transit system or public transit authorities Statute 48-8-3(4) Year Enacted 1968 Year Effective 1968 Data Source National Transit Database Estimate Reliability Class B Data Reliability Class A Note Estimate combined with 4.00500 Description: Sales by counties and municipalities arising out of their operation of any public transit facility and sales by public transit authorities or charges by counties, municipalities, or public transit authorities for the transportation of passengers upon their conveyances. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 7 9 Local Tax Expenditure 5 5 7 (m) Denotes a value of less than $1 million 4.00500 Sales of transportation furnished by an approved and authorized urban transit system Statute 48-8-3(5) Year Enacted 1970 Year Effective 1970 Data Source National Transit Database Estimate Reliability Class B Data Reliability Class A Note Description: Fares and charges, except charges for charter or sightseeing service, collected by an urban transit system for the transportation of passengers. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 4.00400 (m) Denotes a value of less than $1 million 4.00600 Sales to any Hospital Authority created by Georgia law Statute 48-8-3(6) Year Enacted 1976 Year Effective 1976 Data Source Georgia Office of Planning and Budget and Centers for Medicaid and Medicare Services Estimate Reliability Class B Data Reliability Class B Note Estimate combined with 4.00700 Description: Sales to any hospital authority created by Article 4 of Chapter 7 of O.C.G.A. Title 31. 139 | P a g e 4.00610 State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 Estimate combined with 4.00700 Sales to any Housing Authority created by Georgia law Statute 48-8-3(6.1) Year Enacted 1999 Year Effective 1999 Data Source Georgia Department of Community Affairs and the American Community Survey Estimate Reliability Class C Data Reliability Class A Note Description: Sales to any housing authority created by Article 1 of Chapter 3 of O.C.G.A. Title 8. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 5 6 Local Tax Expenditure (m) Denotes a value of less than $1 million 4 4 5 4.00620 Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and related facilities Statute 48-8-3(6.2) Year Enacted 2002 Year Effective 2002 Data Source Georgia Department of Community Affairs Estimate Reliability Class B Data Reliability Class B Note Description: Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and related facilities. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.00630 Sales to any agricultural commission created by the Department of Agriculture Statute 48-8-3(6.3) Year Enacted 2002 Year Effective 2002 Data Source Georgia Department of Agriculture and the Georgia Office of Planning and Budget Estimate Reliability Class C Data Reliability Class C Note Description: Sales to any agricultural commission created by the Department of Agriculture 140 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) (m) (m) (m) 4.00700 Sales of tangible personal property and services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function Statute 48-8-3(7) Year Enacted 1971 Year Effective 1971 Data Source Georgia Office of Planning and Budget and Centers for Medicaid and Medicare Services Estimate Reliability Class B Data Reliability Class B Note Estimate combined with 4.00600 Description: Sales of tangible personal property and services to an approved non-profit nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function and used exclusively by the facility. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 131 139 147 Local Tax Expenditure 98 104 110 (m) Denotes a value of less than $1 million 4.00705 Sales of tangible personal property to a non-profit health center established and receiving funds pursuant to the U.S. Public Health Service Act Statute 48-8-3(7.05) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 426 LC 34 4527 for 2015 Estimate Reliability Class C Data Reliability Class B Note This exemption was eliminated in 2010 and reinstated in 2015. In 2019, this provision was extended until June 30, 2024. Description: Sales of tangible personal property to a non-profit health center Established and receiving funds pursuant to the U.S. Public Health Service Act. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.00710 Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities Statute 48-8-3(7.1) Year Enacted 2001 141 | P a g e Year Effective 2002 Data Source U.S. Economic Census and American Community Survey Estimate Reliability Class C Data Reliability Class A Note Description: Sales of tangible personal property and services to a nonprofit organization, the primary function of which is the provision of services to persons with intellectual disabilities, when such organization is a tax exempt organization under the Internal Revenue Code and obtains an exemption determination letter from the State Revenue Commissioner. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.00720 Sales to Georgia Society of the Daughters of the American Revolution Statute 48-8-3(7.2) Year Enacted 2002 Year Effective 2002 Data Source IRS 990 Form Data Estimate Reliability Class C Data Reliability Class C Note Description: Sales of tangible personal property or services to any chapter of the Georgia State Society of the Daughters of the American Revolution which is tax exempt under IRS Code Section 501(c)(3) and obtains an exemption determination letter from the State Revenue Commissioner. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.00730 Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level Statute 48-8-3(7.3) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 426 LC 34 4527 for 2015 Estimate Reliability Class C Data Reliability Class C Note This exemption was eliminated in 2010 and reinstated in 2015. Description: Sales of tangible personal property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level and when the item sold is used exclusively for general treatment function. 142 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 2 2 2 2 2 2 4.00800 Sales of tangible personal property and services to the University System of Georgia and its educational units Statute 48-8-3(8) Year Enacted 1963 Year Effective 1963 Data Source University System of Georgia Annual Financial Report Estimate Reliability Class B Data Reliability Class A Note Estimate combined with 4.00900 Description: Sales of tangible personal property and services to the University System of Georgia and its educational units. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 49 50 51 Local Tax Expenditure 40 41 42 (m) Denotes a value of less than $1 million 4.00900 Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia Statute 48-8-3(9) Year Enacted 1966 Year Effective 1966 Data Source University System of Georgia Annual Financial Report Estimate Reliability Class C Data Reliability Class C Note Estimate combined with 4.00800 Description: Sales of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia whose credits are accepted by the University System of Georgia. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate combined with 4.00800 (m) Denotes a value of less than $1 million 4.01000 Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Statute 48-8-3(10) Year Enacted 1968 Year Effective 1968 Data Source The National Center for Education Statistics and the Georgia Department of Education Estimate Reliability Class C Data Reliability Class C 143 | P a g e Note Description: Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 5 5 Local Tax Expenditure 5 5 5 (m) Denotes a value of less than $1 million 4.01100 Sale of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute Statute 48-8-3(11) Year Enacted 1968 Year Effective 1968 Data Source Fiscal Note for HB 445/LC 34 4571S for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Sales of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute which: (A) Is tax exempt under Section 501(c)(3) of the Internal Revenue Code; (B) Furnishes at least 50 percent of its programs through universities and other institutions of higher education in support of their educational programs; (C) Is paid for by government funds of a foreign country; and (D) Is an instrumentality, agency, department, or branch of a foreign government operating through a permanent location in this state. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01200 School lunches sold and served to pupils and employees of public schools Statute 48-8-3(12) Year Enacted 1953 Year Effective 1953 Data Source Georgia School Nutrition Association and the Georgia Department of Education Estimate Reliability Class B Data Reliability Class B Note Description: Food, food ingredients, and prepared food sold and served to pupils and employees of public schools. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) 7 Local Tax Expenditure (m) (m) 5 (m) Denotes a value of less than $1 million 144 | P a g e 4.01300 School lunches sold and served to pupils and employees of approved private schools Statute 48-8-3(13) Year Enacted 1967 Year Effective 1967 Data Source Georgia School Nutrition Association and the National Center of Education Statistics Estimate Reliability Class B Data Reliability Class B Note Description: Food, food ingredients, and prepared food sold and served to pupils and employees of approved private elementary and secondary schools State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01400 Sales of art and other artifacts for display or exhibition to museums Statute 48-8-3(14) Year Enacted 1973 Year Effective 1973 Data Source U.S. Economic Census and IRS Form 990 data Estimate Reliability Class C Data Reliability Class B Note Description: Sales of art and anthropological, archeological, geological, horticultural, or zoological objects or artifacts and other similar tangible personal property to or for the use by any museum or organization which is tax exempt under Section 501(c)(3) of the Internal Revenue Code of such tangible personal property for display or exhibition in a museum within this state State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01500 Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious institution Statute 48-8-3(15B) Year Enacted 1953 Year Effective 1953 Data Source National Center for Charitable Statistics Estimate Reliability Class C Data Reliability Class B Note Description: Sales of any religious paper in this state when the paper is owned and operated by religious institutions or denominations and no part of the net profit from the operation of the institution or denomination inures to the benefit of any private person. Exempt sales must occur during a fundraising 145 | P a g e activity with a duration that does not exceed 30 days in any calendar year. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01510 Sales of pipe organs or steeple bells to any church qualifying as a nonprofit Statute 48-8-3(15.1) Year Enacted 2001 Year Effective 2001 Data Source The Atlanta Chapter for The American Guild of Organists Estimate Reliability Class C Data Reliability Class C Note Description: Sales of pipe organs or steeple bells to any church qualifying as a nonprofit. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01700 Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce Statute 48-8-3(17) Year Enacted 1951 Year Effective 1951 Data Source U.S. Energy Information Administration and the U.S. Department of Energy Estimate Reliability Class B Data Reliability Class A Note Description: Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 5 5 Local Tax Expenditure 4 4 4 (m) Denotes a value of less than $1 million 4.02000 Water delivered through water mains, lines, or pipes Statute 48-8-3(20) Year Enacted 1966 Year Effective 1966 Data Source U.S. Census and the Consumer Expenditure Survey Estimate Reliability Class C Data Reliability Class C Note Description: The sale of water delivered to consumers through water mains, lines, or pipes. 146 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 27 28 29 22 23 24 4.02200 Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made Statute 48-8-3(22) Year Enacted 1951 Year Effective 1951 Data Source NA Estimate Reliability NA Data Reliability Class A Note Class A Description: Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure See expenditure estimate for 4.5050 Local Tax Expenditure See expenditure estimate for 4.5050 (m) Denotes a value of less than $1 million 4.02300 Repair services when a separate charge is made to the customer Statute 48-8-3(23) Year Enacted 1951 Year Effective 1951 Data Source NA Estimate Reliability NA Data Reliability Class A Note Class A Description: Repair services when a separate charge is made to the customer. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure See expenditure estimate for 4.5110 Local Tax Expenditure See expenditure estimate for 4.5110 (m) Denotes a value of less than $1 million 4.02400 Rental of videotape or film to persons charging admission to view the tape or film Statute 48-8-3(24) Year Enacted 1989 Year Effective 1989 Data Source US Economic Census and Nash Information Services Box Office Data Estimate Reliability Class C Data Reliability Class C 147 | P a g e Note Description: Rental of videotape or film to persons charging admission to view the tape or film. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 1 3 Local Tax Expenditure 1 1 3 (m) Denotes a value of less than $1 million 4.03000 Vehicles purchased by service-connected disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase a specially adapted the vehicle Statute 48-8-3(30) Year Enacted 1972 Year Effective 1972 Data Source The Department of Veteran Affairs Estimate Reliability Class A Data Reliability Class A Note Description: The sale of a vehicle to a service-connected disabled veteran when the veteran received a grant from the United States Department of Veterans Affairs to purchase and specially adapt the vehicle to the veteran's disability. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03420 Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine parts Statute 48-8-3(34.2) Year Enacted 1996 Year Effective 1996 Data Source Fiscal Note for HB 933 LC 40 0540 for 2014 Estimate Reliability Class B Data Reliability Class A Note Description: Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine parts or components in a remanufacturing facility. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03600 Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water pollution Statute 48-8-3(36) Year Enacted 1972 Year Effective 1972 148 | P a g e Data Source Fiscal Note for HB 445 LC 40 4571S for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Machinery and equipment or any repair or replacement component used in a facility for the primary purpose of reducing or eliminating air and water pollution State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03800 Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H Center Statute 48-8-3(38) Year Enacted 1976 Year Effective 1976 Data Source Fiscal Note for HB 445/LC 34 4571S for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H center. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03900 Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions Statute 48-8-3(39) Year Enacted 1994 Year Effective 1994 Data Source Georgia Department of Education, IRS Form 990 data, and the National High School Athletic Association Estimate Reliability Class C Data Reliability Class C Note Description: Sales by any public or private school containing any combination of grades kindergarten through 12 of tangible property, concessions, or tickets for admission to a school event or function, provided that the net proceeds from such sales are used solely for the benefit of such school or its students State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) 2 Local Tax Expenditure (m) (m) 2 (m) Denotes a value of less than $1 million 149 | P a g e 4.04000 Sale of major components or repair parts installed in military aircraft, vehicles, or missiles Statute 48-8-3(40) Year Enacted 1965 Year Effective 1965 Data Source USASpending.gov and the U.S. Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Sale of major components or repair parts installed in military aircraft, vehicles, or missiles. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 28 33 33 Local Tax Expenditure 23 28 27 (m) Denotes a value of less than $1 million 4.04100 Sale of tangible personal property and services to a nonprofit child-caring institution, child-placing agency, or maternity home Statute 48-8-3(41) Year Enacted 2004 Year Effective 2004 Data Source U.S. Economic Census Estimate Reliability Class B Data Reliability Class B Note Description: Sales of tangible personal property and services to a child-caring institution as defined in paragraph (1) of O.C.G.A 49-5-3; a child-placing agency as defined in paragraph (2) of O.C.G.A. 49-5-3, or maternity home as defined in paragraph (14) of O.C.G.A. 49-5-3, when such institution, agency, or home is engaged primarily in providing child services and is a non-profit, tax-exempt organization under Section 501(c)(3) of the IRS revenue code. Also includes sales from certain Fundraising activities (limited to 30 days per year). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.04300 Revenues from coin-operated amusement machines for which individual permits are required Statute 48-8-3(43) Year Enacted 1992 Year Effective 1993 Data Source Georgia Lottery Commission Annual Report Estimate Reliability Class C Data Reliability Class B Note Description: Gross revenue generated from all bona fide coin-operated amusement machines which vend or dispense music or are operated for skill, 150 | P a g e amusement, entertainment, or pleasure. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 47 51 55 Local Tax Expenditure 39 42 46 (m) Denotes a value of less than $1 million 4.04600 Sale of tangible personal property or taxable services to nonprofit blood banks Statute 48-8-3(46) Year Enacted 1980 Year Effective 1980 Data Source U.S. Economic Census and IRS 990 Form Data Estimate Reliability Class C Data Reliability Class B Note Description: Sale to certain blood banks having a nonprofit status according to Section 501(c)(3) of the IRS revenue code. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.04700 Sale of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or dangerous drugs Statute 48-8-3(47) Year Enacted 1984 Year Effective 1985 Data Source State Health Expenditures from the Centers for Medicare and Medicaid Services Estimate Reliability Class B Data Reliability Class B Note Description: Sale or use of drugs that are lawfully dispensable only by prescription for the treatment of natural persons; prescription eyeglasses and contact lenses; prescription contact lens samples; drugs dispensable by prescription for the treatment of natural persons without charge to physicians, hospitals, etc. by pharmaceutical manufacturers or distributors; drugs and durable medical equipment dispensed or distributed without charge solely for the purposes of a clinical trial approved by the FDA or an institutional review board. Note: This exemption does not include over-the-counter drugs, drugs sold for animal use, or non-prescription eyeglasses. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 453 478 508 Local Tax Expenditure 377 398 423 (m) Denotes a value of less than $1 million 4.04800 Sale of crab bait to licensed commercial fishermen Statute 48-8-3(48) 151 | P a g e Year Enacted 1985 Year Effective 1985 Data Source Georgia Department of Natural Resources and the U.S. Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Sale of crab bait to licensed commercial fisherman. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.05000 Sale of insulin syringes and blood glucose level measuring strips dispensed without a prescription Statute 48-8-3(50) Year Enacted 1986 Year Effective 1986 Data Source The Centers for Disease Control and Prevention and the Medical Expenditures Panel Survey Estimate Reliability Class C Data Reliability Class C Note Description: Sale of blood measuring devices, monitoring equipment, or insulin delivery systems used exclusively by diabetics; insulin, insulin syringes and blood glucose monitoring strips; when dispensed without a prescription. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 39 41 43 Local Tax Expenditure 32 34 36 (m) Denotes a value of less than $1 million 4.05100 Sale of oxygen when prescribed by a licensed physician Statute 48-8-3(51) Year Enacted 1986 Year Effective 1986 Data Source The Medical Expenditure Panel Survey and The Department of Health and Human Services Estimate Reliability Class C Data Reliability Class A Note Description: Sale of oxygen when prescribed by a licensed physician. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 5 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 152 | P a g e 4.05200 Sale or use of hearing aids Statute 48-8-3(52) Year Enacted 1986 Year Effective 1986 Data Source Medical Expenditure Panel Survey and Healthy Hearing Review Estimate Reliability Class A Data Reliability Class B Note Description: Exempts the sale or use of approved hearing aids from sales and use tax. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 6 7 7 Local Tax Expenditure 5 6 6 (m) Denotes a value of less than $1 million 4.05300 Transactions where food stamps or WIC coupons are used as the method of payment Statute 48-8-3(53) Year Enacted 1986 Year Effective 1987 Data Source U.S. Food and Nutrition Service and the U.S. Department of Agriculture Estimate Reliability Class B Data Reliability Class A Note Description: Sales tax is not applied on items purchased using food stamps or WIC coupons. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 161 151 142 Local Tax Expenditure 134 126 118 (m) Denotes a value of less than $1 million 4.05400 Sale or use of any durable medical equipment or prosthetic device prescribed by a physician Statute 48-8-3(54) Year Enacted 1992 Year Effective 1993 Data Source U.S. Census of National Health Expenditures and the Medical Expenditure Panel Survey Estimate Reliability Class B Data Reliability Class A Note Description: Sale or use of any durable medical equipment or prosthetic device prescribed by a physician. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 40 45 47 Local Tax Expenditure 33 37 39 (m) Denotes a value of less than $1 million 153 | P a g e 4.05500 Sale of Georgia lottery tickets Statute 48-8-3(55) Year Enacted 1992 Year Effective 1992 Data Source Georgia Lottery Commission Annual Report Estimate Reliability Class A Data Reliability Class A Note Description: Sale of lottery tickets authorized by O.C.G.A. Chapter 27 of Title 50. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 209 219 230 Local Tax Expenditure 172 181 190 (m) Denotes a value of less than $1 million 4.05600 Sale by any qualified nonprofit parent teacher organization Statute 48-8-3(56) Year Enacted 1995 Year Effective 1995 Data Source Georgia Parent Teacher Association and IRS Form 990 data Estimate Reliability Class C Data Reliability Class B Note Description: Sale by any qualified nonprofit parent teacher organization. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.05700 Food purchased for off-premises consumption Statute 48-8-3(57) Year Enacted 1996 Year Effective 1998 Data Source U.S. Consumer Expenditure Survey and the US Census Retail Market Report Estimate Reliability Class B Data Reliability Class B Note Description: Exemption applies to food and food ingredients, which means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. It does not apply to alcoholic beverages, tobacco, immediate consumption items, vitamins, and minerals. It does not apply to the local option sales taxes or items used primarily for medical or hygiene purposes (cough drops, breath strips, over the counter medication, etc.). 154 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 620 629 678 0 0 0 4.05710 Sales of food and beverages to a qualified food bank Statute 48-8-3(57.1) Year Enacted 2006 Year Effective 2006 Data Source Fiscal Note for LC 43 1447 for 2021 Estimate Reliability Class A Data Reliability Class A Note Description: Sales of food and beverages to a qualified food bank State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.05720 Exemption for prepared food and food ingredients that are donated to a qualified nonprofit agency and used for hunger relief purposes Statute 48-8-3(57.2) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for LC 43 1447 for 2020 Estimate Reliability Class A Data Reliability Class A Note This exemption was eliminated in 2011 and reinstated in 2015. This provision is scheduled to expire on June 30, 2021. Description: The use of food and food ingredients that are donated to a qualified nonprofit agency and that are used for hunger relief purposes. "Qualified nonprofit agency" means any entity that is tax exempt under section 501(c)(3) of the Internal Revenue Code and that provides hunger relief. Does not include drugs or over-the-counter drugs. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) 0 0 Local Tax Expenditure (m) 0 0 (m) Denotes a value of less than $1 million 4.05900 Sale of eligible food and beverages by any Girl or Boy Scout council Statute 48-8-3(59) Year Enacted 1996 Year Effective 1996 Data Source The American Community Survey, IRS Form 990 data, and Girl Scouts of America annual report Estimate Reliability Class B Data Reliability Class B 155 | P a g e Note Description: Sales of food or food ingredients to and by member councils of the Girl Scouts or Boy Scouts of America in connection with fundraising activities. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.06000 Sale of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less Statute 48-8-3(60) Year Enacted 2000 Year Effective 2001 Data Source Fiscal Note for HB 445/LC 34 4571S for 2015 Estimate Reliability Class C Data Reliability Class C Note Estimate includes 4.06900. Description: Sales of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less when incorporated into telecommunications manufacturing facility. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06200 Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member of the producer Statute 48-8-3(62) Year Enacted 1998 Year Effective 1998 Data Source U.S. Census of Agriculture, the U.S. Economic Census, and the Annual Survey of Sod Producers Estimate Reliability Class B Data Reliability Class A Note Description: Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member of the producer. This exemption does not apply to sales from a nursery or other places where plants are sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 Local Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 4.06300 Funeral merchandise when paid with funds from the Georgia Crime Victims Emergency Statute 48-8-3(63) Year Enacted 1998 156 | P a g e Year Effective 1998 Data Source The Uniform Crime Report and the National Office for Victims of Crime Estimate Reliability Class C Data Reliability Class C Note Description: The sale or use of funeral merchandise, outer burial containers, and cemetery markers as defined in O.C.G.A 43-18-1, which are purchased with funds received from the Georgia Crime Victims Emergency Fund under Chapter 15 of Title 17. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06500 Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen Statute 48-8-3(65) Year Enacted NA Year Effective NA Data Source The Georgia Department of Natural Resources and the U.S. Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06600 Sale of gold, silver, or platinum bullion Statute 48-8-3(66) Year Enacted 2000 Year Effective 2000 Data Source U.S. Mint 2020 Annual Report Estimate Reliability Class C Data Reliability Class C Note Description: Sale of gold, silver, or platinum bullion. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 Local Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 157 | P a g e 4.06700 Sale of coins or currency Statute 48-8-3(67) Year Enacted 2000 Year Effective 2000 Data Source Professional Numismatists Guild Estimate Reliability Class C Data Reliability Class C Note Description: Sale of coins or currency. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.06810 High-Tech Data Center Equipment Exemption Statute 48-8-3(68.1) Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for HB 696/LC 43 0923S for 2018 Estimate Reliability Class A Data Reliability Class A Note Description: Exemption for high-technology data center equipment, subject to a minimum investment threshold of $250 million over ten years, and certain other structural infrastructural system requirements. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 15 12 13 Local Tax Expenditure 11 9 10 (m) Denotes a value of less than $1 million 4.06900 Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Statute 48-8-3(69) Year Enacted 2000 Year Effective 2001 Data Source Fiscal Note for HB 445/LC 34 4571S for 2015 Estimate Reliability Class C Data Reliability Class C Note Estimate Combined with 4.06000 Description: Sales of machinery, equipment, and material incorporated and used in construction or operation of a clean room of Class 100 or less when the clean room is used directly in the manufacture of tangible personal property. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate Combined with 4.06000 (m) Denotes a value of less than $1 million 158 | P a g e 4.07000 Sale of natural gas used directly in the manufacture of electricity Statute 48-8-3(70) Year Enacted 1999 Year Effective 2000 Data Source U.S. Energy Information Administration Estimate Reliability Class B Data Reliability Class A Note Description: Sale of natural or artificial gas used directly in the manufacture of electricity which is subsequently sold. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 83 90 99 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 4.07100 Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries Statute 48-8-3(71) Year Enacted 1999 Year Effective 2000 Data Source National Center for Charitable Statistics Estimate Reliability Class B Data Reliability Class B Note Description: Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.07200 Sale of prescribed mobility enhancing equipment Statute 48-8-3(72) Year Enacted 1999 Year Effective 2000 Data Source State Health Expenditures from the Centers for Medicare and Medicaid Services and the Medical Expenditure Panel Survey Estimate Reliability Class B Data Reliability Class B Note Description: The sale to or use by a patient of all mobility enhancing equipment prescribed by a physician. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 159 | P a g e 4.07600 Exemption for personal property used in the renovation or expansion of an aquarium Statute 48-8-3(76) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 238 LC 28 7425 for 2015 Estimate Reliability Class A Data Reliability Class A Note This exemption is set to expire January 1, 2022. Description: Sale or use of tangible personal property used for or in the renovation or expansion of an aquarium located in this state that charges admission and is owned or operated by an organization that is tax exempt under 501(c)(3). Qualifying aquarium must pay tax and apply for refund. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 (m) 0 Local Tax Expenditure 2 (m) 0 (m) Denotes a value of less than $1 million 4.08100 The purchase of food and nonalcoholic beverages provided at no charge aboard a qualified airline Statute 48-8-3(81) Year Enacted 2005 Year Effective 2005 Data Source Bureau of Transportation Statistics Estimate Reliability Class B Data Reliability Class B Note Description: The purchase of food and nonalcoholic beverages provided at no charge aboard a qualified airline not including alcohol or tobacco. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 6 7 Local Tax Expenditure 2 4 5 (m) Denotes a value of less than $1 million 4.08300 Sale of biomass materials used to produce electricity or steam intended for sale Statute 48-8-3(83) Year Enacted 2006 Year Effective 2006 Data Source Fiscal Note for HB 1018 LC 18 4936 for 2009 and the U.S. Energy Information Administration Estimate Reliability Class B Data Reliability Class A Note Description: The sale or use of biomass material, including pellets or other fuels derived from compressed, chipped, or shredded biomass material, utilized in the production of energy, including without limitation the production of electricity and/or steam. 160 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 2 2 2 1 2 2 4.08600 Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft Statute 48-8-3(86) Year Enacted 2009 Year Effective 2009 Data Source Fiscal Note for HB 933 LC 40 0540 for 2014 Estimate Reliability Class C Data Reliability Class C Note Description: The sale or use of engines, parts, equipment, and other tangible personal property used in the maintenance or repair of aircraft when such engines, parts, equipment, and other tangible personal property are installed on such aircraft that is being repaired or maintained in this state, so long as such aircraft is not registered in this state. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 22 22 23 Local Tax Expenditure 16 17 17 (m) Denotes a value of less than $1 million 4.09300 Sale of tangible personal property used for and in the construction of a competitive project of regional significance. Statute 48-8-3(93) Year Enacted 2012 Year Effective 2012 Data Source Fiscal Note for HB 587 LC 43 2010S for 2021 Estimate Reliability Class B Data Reliability Class B Note In 2021, this provision was extended to June 30, 2023. Description: For the period commencing January 1, 2012, until June 30, 2023, sales of tangible personal property used for and in the construction of a competitive project of regional significance. The exemption applies to purchases made during the entire time of construction of the competitive project of regional significance so long as such project meets the definition of a ""competitive project of regional significance"" within the period commencing January 1, 2012, until June 30, 2023. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 9 9 9 Local Tax Expenditure 7 7 7 (m) Denotes a value of less than $1 million 161 | P a g e 4.09400 The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale Statute 48-8-3(94) Year Enacted 2014 Year Effective 2014 Data Source Fiscal Note for HB 586 LC 43 2029S for 2021 Estimate Reliability Class B Data Reliability Class A Note Estimate Combined with 4.3.2 Description: The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale. To qualify for the packaging exemption, the items shall be used solely for packaging and shall not be purchased for reuse. The packaging exemption shall not include materials purchased at a retail establishment for consumer use. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure Estimate Combined with 4.3.3 Local Tax Expenditure (m) Denotes a value of less than $1 million 4.09700 Sales of admission to a nonrecurring major sporting event Statute 48-8-3(97) Year Enacted 2016 Year Effective 2017 Data Source Fiscal Note for HB 951 LC 34 4805 for 2016 Estimate Reliability Class B Data Reliability Class B Note Description: Sales of admissions to nonrecurring major sporting events in this state that are expected to generate over $50 million in the host locality. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) 0 Local Tax Expenditure (m) (m) 0 (m) Denotes a value of less than $1 million 4.10000 Exemption for sales of tickets to a qualified fine arts performance or exhibition Statute 48-8-3(100) Year Enacted 2017 Year Effective Transactions occurring on or after July 1, 2021 Data Source Fiscal Note for HB 586 LC 43 2029S for 2021 Estimate Reliability Class B Data Reliability Class B Note Provision previously expired June 30, 2020, and was restored in the 2021 legislative session. Provision expires December 31, 2022. Description: A sales tax exemption on the sale of tickets, fees, or charges for admission to a qualified fine arts performance or exhibition. 162 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) (m) (m) (m) 4.10100 The sale of certain written material by a nonprofit Statute 48-8-3(101) Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note HB 217 for 2018 Estimate Reliability Class B Data Reliability Class B Note This provision expires July 1, 2021. Description: The sale or use of noncommercial written materials or mailings by an organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, if the organization is located in this state and provides such materials to charity supporters for educational, charitable, religious, or fundraising purposes. This exemption shall apply from July 1, 2018 until July 1, 2021. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 8 0 0 Local Tax Expenditure 6 0 0 (m) Denotes a value of less than $1 million 4.10200 Partial exemption for qualified manufactured homes Statute 48-8-3(102) Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note HB 871/LC 43 0891S for 2018 Estimate Reliability Class B Data Reliability Class B Note Description: A partial exemption from state sales and use tax for qualified manufactured homes equal to 50 percent of the sale price of such homes. Qualified manufactured homes are those that are to be converted, and actually converted within 30 days of sale, to real property in the state pursuant to O.C.G.A. 8-2-183.1. The proposed exemption does not apply to any local sales or use tax in the state. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 4 4 4 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 4.10300 Exemption for construction materials used in construction of an automobile museum Statute 48-8-3(103) Year Enacted 2018 Year Effective 2018 163 | P a g e Data Source Fiscal Note for HB 793 for 2018 Estimate Reliability Class B Data Reliability Class B Note This provision expires December 31, 2020. Description: The sale or use of tangible personal property used for the construction of a museum that is owned by an entity that is incorporated in this state as a nonprofit organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. The museum must celebrate as its primary mission the diverse heritage of automobiles. This exemption shall apply from July 1, 2018, until December 31, 2020 and the aggregate state and local sales and use tax refunded pursuant to this paragraph shall not exceed $960,000. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) 0 0 Local Tax Expenditure (m) 0 0 (m) Denotes a value of less than $1 million 4.10400 Exemption for poultry diagnostic and disease monitoring service nonprofit organization Statute 48-8-3(104) Year Enacted 2019 Year Effective 2019 Data Source IRS Form 990 Data Estimate Reliability Class A Data Reliability Class A Note Description: Sales to or by any nonprofit organization which has as its primary purpose providing poultry diagnostic and disease monitoring services. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.3.2 Exemption for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing Statute 48-8-3.2 Year Enacted 2012 Year Effective 2013 Data Source Fiscal Note for HB 586 LC 43 2029S for 2021 Estimate Reliability Class B Data Reliability Class A Note This exemption was modified in 2017 to include maintenance and replacement parts for certain machinery or equipment used to mix, agitate, and transport freshly mixed concrete, effective until July 1, 2020. This provision of the exemption was restored effective July 1, 2021, and until July 1, 2026. Description: Exemptions for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing. 164 | P a g e 4.3.3 4.3.4 4.3.5 State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 3,427 3,657 3,858 2,853 3,044 3,212 Sale and use by a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment Statute 48-8-3.3 Year Enacted 2012 Year Effective 2013 Data Source National Agricultural Statistical Service Estimate Reliability Class B Data Reliability Class B Note Description: Sale to, or use by, a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 201 207 213 Local Tax Expenditure 168 173 178 (m) Denotes a value of less than $1 million Exemption for qualified boat repairs Statute 48-8-3.4 Year Enacted Year Effective 2017 Transactions occurring on or after July 1, 2017 Data Source Estimate Reliability Fiscal Note for HB 586 LC 43 2029S for 2021 Class B Data Reliability Note Class B The provision expires on June 30, 2031 Description: A sales tax exemption for certain tangible property used in the repair, retrofit, or maintenance of boats. The exemption cannot exceed $35,000 for any single repair, retrofit, or maintenance event. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exemption for the sale and use of jet fuel Statute 48-8-3.5 Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for LC 43 1712 for 2020 Estimate Reliability Class B Data Reliability Class B Note Description: The sales of jet fuel is exempt from the state sales and use tax. 165 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 22 49 50 0 0 0 166 | P a g e 4.5 Sales and Use Tax for Services 4.5.010 Construction Services Description: Sales by establishments primarily engaged in the construction of buildings or engineering projects (e.g., highways and utility systems), and preparation of sites for new construction, but excluding cost of materials taxed under current law and land. (NAICS 23) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1,855 1,925 1,970 Local Tax Expenditure 1,539 1,598 1,635 (m) Denotes a value of less than $1 million 4.5020 Automotive Services by Motor Vehicle and Parts Dealers Description: Labor charges for service and repair of vehicles (by motor vehicle and parts dealers only). (NAICS 441). State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 101 106 109 Local Tax Expenditure 84 88 91 (m) Denotes a value of less than $1 million 4.5030 Investment and Financial Advisers Description: Fees charged by trusts, financial planning and investment management services. (NAICS 52392-99) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 405 420 436 Local Tax Expenditure 336 348 362 (m) Denotes a value of less than $1 million 4.5040 Real Estate Services Description: State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 294 293 297 244 243 247 4.5050 Professional, Scientific and Technical Services Description: Charges for professional, scientific and technical services, excluding internet and streaming services, tangible good sales, temp staffing and other non-qualifying sales. (NAICS 54) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2,289 2,410 2,483 Local Tax Expenditure 1,900 2,001 2,061 (m) Denotes a value of less than $1 million 167 | P a g e 4.5060 Administrative and Support Services Description: Sales by firms engaged primarily in administrative and support services, excluding correctional facilities. Estimate also excludes the sale of tangible goods, health care and temp staffing by such establishments. (NAICS 561) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 766 801 838 Local Tax Expenditure 636 665 695 (m) Denotes a value of less than $1 million 4.5070 Waste Management and Remediation Services Description: Sales by firms that provide waste management and remediation services, excluding tangible good sales. (NAICS 562) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 146 149 152 Local Tax Expenditure 121 124 126 (m) Denotes a value of less than $1 million 4.5080 Educational Services (excluding schools) Description: Sales by establishments that provide educational services, such as training, tutoring, coaching and support services, excluding pre-K-12 schools, colleges and universities. Estimate excludes the sale of tangible goods, and other non-qualifying revenue such as grants and donations. (NAICS 61) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 49 50 52 Local Tax Expenditure 41 42 43 (m) Denotes a value of less than $1 million 4.5090 Health Care and Social Assistance Services Description: Sales by establishments primarily engaged in health care and social assistance, excluding tangible good sales, grants, government revenue, donations and other non-service revenue. (NAICS 62) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2,649 2,673 2,704 Local Tax Expenditure 2,198 2,219 2,244 (m) Denotes a value of less than $1 million 4.50100 Promoters of Events; Agents for Entertainers Description: Fees charged by event promoters and agents for athletes and entertainers. Excludes admissions fees and tangible good sales. (NAICS 7113-4) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 7 10 17 Local Tax Expenditure 6 9 14 (m) Denotes a value of less than $1 million 168 | P a g e 4.50110 Repair and Maintenance Services Description: Sales by establishments primarily engaged in the repair and maintenance of vehicles, electronics, appliances and other goods. Excludes merchandise and parts sales by such establishments. (NAICS 811) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 99 103 107 Local Tax Expenditure 82 85 89 (m) Denotes a value of less than $1 million 4.50120 Personal and Laundry Services Description: Sales by establishments engaged in miscellaneous personal services, such as hair and nail salons, laundromats, funeral homes and parking garages. Excludes tangible good sales. (NAICS 812) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 129 135 141 Local Tax Expenditure 107 112 117 (m) Denotes a value of less than $1 million 169 | P a g e 4.7 Vendor Compensation 4.70000 Compensation of dealers for reporting and paying tax Statute 48-8-50 Year Enacted 1964 Year Effective 1964 Data Source Office of Planning and Budget and DOR Estimate Reliability Class A Data Reliability Class A Note Georgia allows a vendor collection fee of 3 percent for the first $3,000 and then 0.5 percent for amounts above $3,000 but does not impose a maximum limitation per vendor. Description: State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 83 86 89 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 170 | P a g e 4.9 Casual Sales 4.90000 Sales tax exemption for casual sales Statute DOR administrative rule Year Enacted NA Year Effective NA Data Source Georgia Department of Natural Resources and the General Aviation Manufacturers Association Estimate Reliability Class C Data Reliability Class C Note Description: Purchases of boats, planes and other tangible goods sold by persons not in the business of selling such items are not subject to sales tax. (Prior to the implementation of the Alternative Ad Valorem Tax on Motor Vehicles this estimate included casual sale of motor vehicles.) State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 Local Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 171 | P a g e Sales and Use Tax expenditures for which an estimate is not currently available Expenditure Expenditure 4.00100 48-8-3(1) Expenditure Sales to Federal Government, State of Georgia or a county or municipality in Georgia or any agency of such governments 4.00200 48-8-3(2) Tangible personal property furnished by the Federal Government or any county or municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system 4.00300 4.01800 4.01900 48-8-3(3) 48-8-3(18) 48-8-3(19) Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel Charges for transportation of tangible personal property made in connection with interstate or intrastate transportation All tangible personal property purchased outside this state by a nonresident when the property is brought into Georgia upon the nonresident becoming a resident 4.02100 48-8-3(21) Sales, transfers or exchanges of tangible personal property resulting from business reorganization when the owners, partners, or stockholders maintain the same proportionate interest or share in the newly formed business 4.03100 4.03200 4.03300 4.03410 4.03610 4.03910 4.04200 48-8-3(31) 48-8-3(32) Sale of tangible personal property manufactured or assembled in Georgia for export when delivery is taken outside of Georgia Aircraft, watercraft, motor vehicles, and other transportation equipment manufactured or assembled in this State for exclusive use outside Georgia 48-8-3(33) 48-8-3(34.1) 48-8-3(36.1) 48-8-3(39.1) 48-8-3(42) Common or common and contract carriers Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities Machinery and equipment used for water conservation and incorporated into a qualified water conservation facility Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property Use or lease of tangible personal property when the lessor and lessee are under 100 percent common ownership and where the person who furnishes, leases, or rents the property has paid sales or use tax on the property 4.04400 48-8-3(44) Sale of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state 172 | P a g e Sales and Use Tax expenditures for which an estimate is not currently available Expenditure Expenditure 4.04500 48-8-3(45) Expenditure The sale or use of paper stock when used to print catalogs for distribution outside Georgia 4.06100 4.06800 48-8-3(61) 48-8-3(68) Advertising inserts that are used in newspapers for resale Sale of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million 4.09100 48-8-3(91) The sale of prewritten software which has been delivered to the purchaser electronically or by means of load and leave 4.3.6 36-88-3(8.1) Exemption for sales within an enterprise zone 173 | P a g e 5. Insurance Premium Tax The premium tax is imposed upon gross direct premiums received by insurers doing business in the state to insure persons, property, or risks in Georgia. The state tax rate is imposed at a rate of 2.25 percent of gross direct premiums, though the rate is reduced to 1.25 percent for insurers holding at least 25 percent of their total assets, exclusive of direct obligations of the United States, in specified classes of Georgia assets. For insurers holding 75 percent of such total assets in Georgia, the rate is reduced further to 0.5 percent. Counties levy a tax at 1 percent on gross direct premiums of life insurance companies for policies covering persons residing in unincorporated areas of the county, except that the county tax shall not apply to life insurers that qualify for the abatement of the state tax for firms with 75 percent Georgia assets. Municipalities may levy a tax of up to 1 percent on life policies covering persons residing in the given municipality. Counties and municipalities may levy rates of up to 2.5 percent on gross direct premiums for policies other than life insurance policies. This tax is administered by the State Insurance Commissioner. In FY 2020, state revenues from this tax equaled $555 million and local revenues equaled $700 million. The state proceeds from the tax are deposited into the State General Fund. 5.00100 Credit for retaliatory taxes paid to other states Statute 33-8-7 Year Enacted 1960 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level. Description: Property and casualty insurance companies domiciled in Georgia are able to deduct from their Georgia tax liability taxes paid to other states on policies written in those states. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 5.00200 Georgia Job Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability Note 33-8-4.1 1960 2000 DOR data as of 2020 and Office of Insurance and Safety Fire Commissioner Class A Class A The same estimate is provided in the corporate and personal Income tax sections, see 1.6.012 and 2.6.001. In 2018, the qualifying areas were expanded to include counties with 174 | P a g e military bases and industrial parks that are owned and operated by a government entity. Description: The credit provides a statewide job tax credit to any business or headquarters engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development. Retail establishments are only allowed the credit if located in one of the 40 least-developed counties of the state. Average wages must be greater than the average wage of the county in the state with the lowest average wage. To be eligible, employers must offer health insurance to all new employees. It also provides a tax credit for businesses enterprises designated as operating in less-developed areas. These include areas with ten or more contiguous census tracts with higher than 15 percent poverty and counties with both a military base and a government owned and operated industrial park. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 23 27 28 Corporate Income Tax Expenditure 131 157 160 Insurance Premium Tax Expenditure 7 7 7 State Tax Expenditure 160 191 194 (m) Denotes a value of less than $1 million 5.00300 Exemption for premiums of high-deductible health plans Statute 33-8-4 Year Enacted 2008 Year Effective 2009 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The local exemption expired on December 31, 2014. Description: Insurance companies are allowed to exempt from their insurance premium tax liability any premiums paid by Georgia residents for high-deductible health plans as defined by Section 233 of the Internal Revenue Code. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 5.00400 Exemption for insurance companies that only insure places of worship Statute 33-8-13 Year Enacted 1996 Year Effective 1996 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class C Data Reliability Class C Note Not applicable at the local level. Description: Insurance companies that only insure the risks of places of worship are exempt from the state premium tax. 175 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 5.00500 Insurance abatements Statute 33-8-5 Year Enacted 1996 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level. Description: Georgia imposes a reduced state rate of 1.25 percent on insurance companies that invest at least 25 percent of their assets in qualified Georgia assets. If the amount invested in qualified Georgia assets is greater than 75 percent, the rate is reduced to 0.50 percent. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 188 187 191 (m) Denotes a value of less than $1 million 5.00600 Special credits for life insurance companies Statute 33-8-4, 33-8-8, 33-8-8.1 Year Enacted 1981 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level. Description: Life insurance companies are permitted to deduct contributions to state guarantee funds, license fees paid to local governments, local premium taxes from premium taxes otherwise payable to the State. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 203 202 207 (m) Denotes a value of less than $1 million 5.00700 Low-Income Housing Credit Statute 33-1-18 Year Enacted 1960 Year Effective 2001 Data Source DOR data as of TY 2020 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the personal income tax section and the corporate income tax section, see 1.6.028 and 2.6.017. Description: This is a credit against Georgia income and insurance premium taxes for 176 | P a g e owners of rental housing qualifying for the federal low-income housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 92 95 99 Corporate Income Tax Expenditure 31 32 33 Insurance Premium Tax Expenditure 163 167 174 State Tax Expenditure 286 294 306 (m) Denotes a value of less than $1 million 5.00800 Exemption for multiple employer self-insured health plans Statute 33-50-3 Year Enacted 2016 Year Effective 2016 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Description: Multiple employer self-insured health plans are exempt from the state insurance premium tax on the plan's net premiums. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 5.00900 Agribusiness Tax Credit Statute 33-1-25 Year Enacted 2017 Year Effective Taxable years beginning on or after January 1, 2018 Data Source DOR data as of TY 2020 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the personal and Corporate income tax sections, see 1.6.049 and 5.00900. Description: This income tax credit is to establish qualified low-income community rural investment funds and tax credits. The credit amount is 15 percent of the eligible investment per year beginning in the third year after the investment is made and continuing through the sixth year, for a total credit equal to 60 percent of the eligible investment. The credit is nonrefundable and may not be sold, but may be carried forward indefinitely. The amount of credits available is subject to a cumulative cap of $100 million. State Fiscal Years ($ in Millions) 2021 2022 2023 Income Tax Expenditure 2 4 4 Corporate Income Tax Expenditure 1 1 1 Insurance Premium Tax Expenditure 8 9 9 State Tax Expenditure 11 14 14 (m) Denotes a value of less than $1 million 177 | P a g e 6. Motor Fuel Tax The tax on motor fuels was substantially modified in 2015. Under the new law, the state tax on motor fuels other than diesel fuel and aviation gasoline is, as of January 1, 2021, 28.7 cents per gallon. The state tax on diesel fuel is 32.2 cents per gallon and the tax on aviation gasoline is 1 cent per gallon. Tax rates are adjusted annually for inflation and for the change in average fuel economy of new vehicles registered in the state in the prior year from the year before. The base of the motor fuel tax is imposed on any source of energy that can be used for propulsion of a motor vehicle on the public highways, including, but not limited to gasoline, fuel oils, compressed petroleum gas, and special fuels. The tax is administered by the Georgia DOR and revenues generated from this tax are allocated by the state constitution to the Georgia Department of Transportation for highway purposes. State motor fuel tax revenues for FY 2020 totaled $1.87 billion. 6.00400 Motor fuel tax exemption for aviation fuel Statute 48-9-3 Year Enacted 1978 Year Effective 1978 Data Source Fiscal Note for LC 34 1367S for 2018 Estimate Reliability Class A Data Reliability Class A Note Description: Exemption for aviation fuel State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 6.00500 Motor fuel tax vendor compensation Statute 48-9-8(b) Year Enacted 1992 Year Effective 1992 Data Source Office of Planning and Budget and DOR Estimate Reliability Class A Data Reliability Class A Note Description: Motor fuel dealers are allowed to retain 1 percent of total amounts collected as reimbursement for the cost of collection. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 18 20 20 (m) Denotes a value of less than $1 million 178 | P a g e 7. Alcoholic Beverage Tax This state and local tax is imposed on alcoholic beverages including malt beverages, wine, and distilled spirits. Malt beverages sold in bulk containers (tap or draft beer) are taxed at a state rate of $10 per container up to 31 gallons with a proportionate tax on fractional parts of 31 gallons for larger containers. For bottled and canned malt beverages, the state tax rate is 4 cents per 12 ounces and proportionate rates on fractional parts of 12 ounces for other sizes. Table wines are taxed at a state rate of 11 cents per liter and an additional state import tax of 29 cents per liter is imposed on table wines produced outside of Georgia and imported into the state, in both cases with proportionate rates for fractional parts of a liter. A state excise tax of 27 cents per liter and an additional state import tax of 40 cents per liter is imposed on dessert wines, with proportionate rates for fractional parts of a liter. A state excise tax of 50 cents per liter is imposed on distilled spirits while alcohol (defined to mean ethyl alcohol greater than 190 proof intended for use as a beverage, including grain alcohol and spirits of wine) is subject to a state tax of 70 cents per liter, in both cases with the tax applied proportionately on fractions of a liter. Distilled spirits and alcohol imported to Georgia from outside the state are also subject to an additional state import tax of 50 cents and 70 cents per liter, respectively. A uniform local government beer tax is levied at 5 cents per 12 ounces for bottled and canned malt beverages with proportionate rates for sizes other than 12 ounces. The rate for bulk (tap or draft) malt beverages is $6 per container for containers up to 15 gallons with proportionate rates for larger containers. Counties and municipalities may levy excise tax on wine at rates that do not exceed 22 cents per liter. Counties and municipalities may levy excise taxes on distilled spirits sold by the package at rates that do not exceed 22 cents per liter or proportionate rates for other size containers. Counties and municipalities may also levy excise taxes at rates up to 3 percent of the price charged for mixed drinks. The state portion of the tax is administered by the Georgia DOR. Proceeds from the state tax are deposited into the State General Fund. In FY 2020, state collections equaled $208 million. Local collections for FY 20183 equaled $150 million. 7.00300 200 gallons annually of homebrew per household Statute 3-5-61, 3-6-70 Year Enacted 1977 Year Effective 1977 Data Source American Homebrewers' Association Estimate Reliability Class B Data Reliability Class C Note Description: Allows an exemption for up to 200 gallons annually of homebrew per household. 3 Latest data available. 179 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) 7.00400 Sales to and use by religious organizations for sacramental purposes Statute 3-5-61, 3-6-70 Year Enacted 1977 Year Effective 1977 Data Source National Center for Charitable Statistics & Catholic.org Estimate Reliability Class B Data Reliability Class C Note Description: Sales to and use by religious organizations for sacramental purposes State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 7.00600 Malt beverages containing less than one-half of 0.5 percent alcohol by volume Statute 3-5-90 Year Enacted 1987 Year Effective 1987 Data Source U.S. Economic Census & American Beer Institute Estimate Reliability Class B Data Reliability Class B Note Description: Malt beverages which contain less than one-half of 1 percent alcohol by volume shall not be subject to any tax levied under this title or any tax levied pursuant to authority granted by this title. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Alcoholic beverages tax expenditures for which an estimate is not currently available Expenditure Statute Summary 7.00100 7.00200 3-5-61 3-5-61, 3-6-70 Sales to persons outside the state for resale or consumption outside the state Sales to stores or canteens in U.S. military reservations 7.00500 3-5-61, 3-6-70 Exemption for ethyl alcohol used for certain purposes 180 | P a g e 8. Tobacco Products Excise Tax This tax is levied upon the sale, receipt, purchase, possession, consumption, handling, distribution, or use of tobacco, cigars, and cigarettes in Georgia. The tax is imposed at a rate of 37 cents per pack of 20 cigarettes and a like rate, pro rata, for other sized packages. Little cigars, weighing not more than three pounds per thousand are taxed at a rate of 2.5 mills each ($2.50 per 1000). All other cigars are taxed at 23 percent of the wholesale cost price, exclusive of any trade, cash, of other discounts or any promotion, advertising, display or other similar allowances. Loose or smokeless tobacco is taxed at a rate of 10 percent of the wholesale cost price. Under legislation enacted in 2020, excise taxes are also levied on consumable vapor products beginning January 1, 2021. The tax is imposed at a rate of 5 cents per fluid milliliter for consumable vapor products in a closed system and 7 percent of the wholesale cost price for other consumable vapor products and devices. The tax is administered by the Georgia DOR. In FY 2020, the tax totaled $226 million. The proceeds of the tax are deposited into the State General Fund. 8.00100 Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Georgia War Veterans Nursing Home Statute 48-11-2 Year Enacted 1955 Year Effective Latest Modification 2003 Data Source Georgia Department of Veterans Services Estimate Reliability Class B Data Reliability Class B Note Description: Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Georgia War Veterans Nursing Home State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Tobacco Products excise tax expenditures for which an estimate is not currently available Expenditure Statute Summary 8.00200 48-11-3 De minimis amount brought into the state by one person 8.00300 48-11-3 Cigars and cigarettes stored in a public warehouse 8.00400 48-11-3 Certain cigars and cigarettes held by licensed dealers 181 | P a g e 9. Financial Institutions Special State Occupation Tax This is a special state occupation tax imposed on the adjusted gross receipts of each depository financial institution that does business or owns property in the state. The state tax rate is levied at a rate of 0.25 percent. In addition to the state tax, counties and municipalities may levy a rate not to exceed 0.25 percent of gross receipts. Any amount paid under the special state occupation tax by a financial institution reduces the institution's state income tax liability by an equal amount. The tax is administered by the Georgia DOR. The revenues from this tax in FY 2020 equaled $30 million. The proceeds of the tax are deposited into the State General Fund. 9.00100 Deduction for interest paid Statute 48-6-95 Year Enacted 1975 Year Effective 1975 Data Source FDIC Statistics on Depository Institutions Estimate Reliability Class B Data Reliability Class A Note Description: Financial institutions are allowed to deduct from gross receipts interest paid on all liabilities. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 6 8 10 (m) Denotes a value of less than $1 million Financial institutions tax expenditures for which an estimate is not currently available Expenditure Statute 9.00200 48-6-95 9.00300 48-6-95 Summary Deductions for income from authorized activities of a domestic international banking facility Deduction for income from banking business with persons or entities outside the U.S. 182 | P a g e 10. Special Assessment of Forest Land Conservation Use Property Real property devoted to qualified conservation use is assessed at 40 percent of its current use value. This tax treatment is designed to reduce the property tax burden on landowners in an effort to discourage the conversion of land to residential or commercial use. The property must be maintained in a qualifying conservation use for a period of 10 years. Because the state offsets the loss of local government property tax revenue stemming from this exemption, this exemption represents a reduction in state tax revenues. 10.00000 Special assessment of forest land conservation use property Statute 48-5A-2 Year Enacted 2008 Year Effective 2008 Data Source Office of Planning and Budget; and the Georgia DOR Estimate Reliability Class A Data Reliability Class A Note Description: Grants made available by the Georgia General Assembly through annual appropriations and awarded to counties, municipalities and county or independent school districts for purposes of the Special Assessment of Forest Land Conservation Use Property program State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 39 50 44 (m) Denotes a value of less than $1 million 183 | P a g e 11. Alternative Ad Valorem Tax on Motor Vehicles As of March 1, 2013, motor vehicles titled in Georgia are subject to a title ad valorem tax, referred to as the TAVT or Motor Vehicle Title Fee. This legislation was passed in the 2012 session of the General Assembly and was substantially amended in the 2013 session. As part of the legislation, sales and use tax on the sale of motor vehicles was eliminated for purchases or leases occurring on or after March 1, 2013. The tax base is the fair market value, at the time of titling, of new and used motor vehicles registered and titled in the state, including casual sales, dealer sales, leased vehicles, rental and salvage vehicles, and vehicles being brought into the state by people relocating to Georgia. For dealer sales, the tax base is reduced by the value of the purchaser's trade-in vehicle, if any. For dealer sales of new vehicles, the tax base is also reduced by the amounts of dealer rebates and cash discounts, if any. For most transactions occurring on or after January 1, 2020, the fair market value is equal to the retail selling price. The statutory TAVT rate from January 1, 2020, through June 30, 2023, is 6.6 percent, after which the rate will be 7.0 percent. The revenue from the tax is shared between the state and local governments as specified by law; beginning July 1, 2019, the state and local shares are 35 percent and 65 percent, respectively. The tax is administered by the Georgia DOR but collected at the local level. All proceeds from the state portion of the TAVT are deposited into the State General Fund. The TAVT generated $636 million in state receipts for FY 2020 and $1.13 billion for local governments. 11.001 Reduced rate for related family transfers Statute 48-5C-1(d)(1)-(2) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: A reduced rate of 0.25 percent applies to transfers for a vehicle transferred between immediate family members or a transfer occurring as a result of the death of an immediate family member. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 11 12 12 Local Tax Expenditure 22 23 24 (m) Denotes a value of less than $1 million 11.002 Disabled veteran exemption Statute 48-5C-1(d)(1)-(2) Year Enacted 2012 Year Effective 2013 184 | P a g e Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Exemption from the title fee of the sale of a vehicle to a service-connected disabled veteran when the veteran received a grant from the U.S. Department of Veterans Affairs to purchase and specifically adapt the vehicle to his or her disability. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 11.003 Reduced rate for rental vehicles Statute 48-5C-1(d)(11)(A) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Rental vehicles are subject to a reduced state title fee rate of 0.625 percent of the fair market value and a local title fee rate of 0.625 percent of the fair market value. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 15 16 17 Local Tax Expenditure 36 37 39 (m) Denotes a value of less than $1 million 11.004 Reduced rate for vehicles manufactured in years 1963-89 Statute 48-5C-1(d)(17) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class B Data Reliability Class B Note Description: Vehicles manufactured in years 1963 through 1989 are subject to a reduced state title fee rate of 0.5 percent and reduced local title fee rate of 0.5 percent of the fair market value of the vehicle. This provision allows kit cars to be valued at the greater of the retail selling price of the kit; the average of the current fair market value; or the current wholesale value of the motor vehicle. Vehicles with a model year prior to 1963, for which a conditional title has been obtained, are allowed to opt into the TAVT system upon payment of a state TAVT payment equal to 0.5 percent of the fair market value of the vehicle and a local TAVT payment equal to 0.5 percent of the fair market value of the vehicle. 185 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) (m) (m) (m) 11.005 Reduced rate for salvage vehicles Statute 48-5C-1(b)(2) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Salvage vehicles are subject to a state title fee rate of 1 percent and are not subject to the local title fee State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 15 15 16 Local Tax Expenditure 49 50 53 (m) Denotes a value of less than $1 million 11.006 Dealer loaner vehicle exemption Statute 48-5C-1(d)(12) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class B Data Reliability Class A Note Description: Dealer loaner vehicles are exempt from the state and local title fee for a period of 366 days. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 3 4 3 Local Tax Expenditure 6 12 16 (m) Denotes a value of less than $1 million 11.007 Reduced rate for donated vehicles Statute 48-5C-1(d)(13) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Vehicles donated to nonprofit organizations for the purpose of being transferred to another person are subject to a reduced state title fee rate of 1 percent of the fair market value of the vehicle. No local title fee applies 186 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2021 2022 2023 (m) (m) (m) (m) (m) (m) 11.008 Extended payment period for out-of-state vehicles Statute 48-5C-1(d)(3) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class B Data Reliability Class B Note In 2017, the treatment of out-of-state vehicles changed from 12 percent of fair market value paid in two equal installments over two years to 3 percent of fair market value due upon registration. Description: Vehicles registered by individuals moving from out-of-state are allowed to pay reduced title fee rate of three percent State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 18 18 19 Local Tax Expenditure 33 34 35 (m) Denotes a value of less than $1 million 11.009 Trade-in exemption (including rebates and cash discounts) Statute 48-5C-1(a)(1) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Both the state and local title fee is imposed on the fair market value of a vehicle net of the trade-in value of another motor vehicle, rebates or cash discounts. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 151 155 163 Local Tax Expenditure 280 288 303 (m) Denotes a value of less than $1 million 11.010 Special assessment for used vehicles Statute 48-5C-1(a)(1)(C) Year Enacted 2012 Year Effective 2013 Data Source DOR Data Estimate Reliability Class B Data Reliability Class C Note 187 | P a g e Description: Under certain conditions, used vehicles may be valued based on bill of sale, odometer reading, and values from alternative pricing guides. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 8 8 9 Local Tax Expenditure 15 16 17 (m) Denotes a value of less than $1 million 11.012 Buy here pay here transactions Statute 48-5C-1(b)(1)(B)(xv) Year Enacted 2013 Year Effective 2014 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: Seller financed used car transactions are subject to a title fee rate that is two and a half percentage points below the standard title fee rate. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 6 6 7 Local Tax Expenditure 12 12 13 (m) Denotes a value of less than $1 million 11.014 Treatment of Leased Vehicles Statute 48-5C-1(a)(1)(E) Year Enacted 2017 Year Effective 2018 Data Source DOR Data Estimate Reliability Class A Data Reliability Class A Note Description: The TAVT is levied only on the base payments under the lease agreement. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure 9 9 9 Local Tax Expenditure 16 17 17 (m) Denotes a value of less than $1 million 11.015 Treatment of vehicles involved in divorce settlement or business reorganization Statute 48-5C-1(d)(18), 48-5C-1(d)(15) Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for HB 329 LC 28 8929S for 2018 Estimate Reliability Class A Data Reliability Class A Note Description: Vehicles transferred because of a divorce decree are subject to a reduced state TAVT rate of 0.5 percent of vehicle fair market value and a reduced local TAVT rate of 0.5 percent of vehicle fair market value. The transfer of 188 | P a g e a title made as a result of a business reorganization is exempt from the title fee. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 11.016 Treatment of non-IRP Buses Statute 48-5C-1(d)(7.1) Year Enacted 2018 Year Effective 2018 Data Source Fiscal Note for HB 329 LC28 8929S for 2018 Estimate Reliability Class A Data Reliability Class A Note Description: In the case of for-hire charter buses and motor coaches which seat at least 15 passengers or more, the legislation allows the TAVT to be paid over a 12-month period in two equal installments. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 11.017 Exemption for vehicles purchased by disabled first responders Statute 48-5C-1(a)(.1) Year Enacted 2019 Year Effective 2019 Data Source Fiscal Note SB 138 LC 43 1258 for 2019 Estimate Reliability Class A Data Reliability Class A Note Description: Vehicles purchased by disabled first responders, as defined on O.C.G.A. 45-9-85, or a surviving spouse are exempt from TAVT up to a maximum of $50,000 in aggregate fair market value combined for all motor vehicles that he or she registers during any three-year period. State Fiscal Years ($ in Millions) 2021 2022 2023 State Tax Expenditure (m) (m) (m) Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million Title ad valorem tax expenditures for which an estimate is not currently available Expenditure Statute Summary 11.013 48-5C-1 Exemption for leased vehicles qualifying for Manufacturing Headquarters 189 | P a g e 12. Special Excise Tax on Consumer Fireworks An excise tax of 5 percent is levied on gross receipts from the retail sale of fireworks, in addition to any state and local taxes otherwise imposed by law. This tax was enacted in 2015, effective for sales on or after July 1, 2015. The tax is administered by the Georgia DOR and the proceeds from this excise tax are deposited into the State General Fund. The consumer fireworks tax generated $1.63 million in state receipts for FY 2020. 190 | P a g e 13. State Hotel-Motel Tax An excise tax of $5.00 per day is levied on each room rented or leased. This tax was enacted in 2015 and became effective on July 1, 2015. The tax is administered by the Georgia DOR. Although collections from this tax are deposited into the State General Fund, they must be appropriated exclusively for transportation purposes. The state hotel-motel tax generated $153 million in state receipts for FY 2020. 191 | P a g e 14. For-Hire Ground Transport Excise Tax An excise tax is imposed on for hire ground transport trips (50 cents per trip) and shared for hire ground transport trips (25 cents per trip). The per-trip amount of the tax is to be adjusted annually for inflation using the Consumer Price Index for All Urban Consumers rate published by the U.S. Bureau of Labor Statistics. The tax was enacted in 2020 and produced $15.9 million in state receipts for FY 2021. 192 | P a g e Appendix of Tables Expenditure 1.6.003 1.6.025 1.6.030 1.6.034 1.6.037 1.6.039 1.6.040 1.6.042 1.6.044 2.1.007 2.2.013 2.6.014 2.6.019 2.6.023 2.6.028 Table 1: Summary of Expired Provisions Summary Tax Driver Education Credit State Individual Income Tax Qualified Transportation Credit Total State Credit Diesel Particulate Emission Reduction Technology Equipment Credit Total State Credit Georgia Employer GED Tax Credit (previously known as the Employer's Credit for Basic Skills Education) Total State Credit Qualified Investor Tax Credit State Individual Income Tax Tax credit for water conservation facilities and qualified water conservation investment property Total State Credit Tax credit for shift from groundwater usage Total State Credit Tax credit for purchase of alternative fuel heavyduty or medium-duty vehicle Total State Credit Employer tax credit for hiring qualified parolees Total State Credit Exclusion of health insurance benefits for military Federal retirees and retiree dependents enrolled in Corporate Medicare Income Tax Election to expense 50 percent of qualified property used to refine liquid fuels Federal Corporate Income Tax Qualified Transportation Credit Total State Credit Diesel Particulate Emission Reduction Technology Equipment Credit Total State Credit Georgia Employer GED Tax Credit (previously known as the Employer's Credit for Basic Skills Education) Total State Credit Tax credit for water-conservation facilities and qualified water-conservation investment property 2.6.029 2.6.031 Tax credit for shift from groundwater usage Tax credit for purchases of alternative fuel heavyduty or medium-duty vehicle Total State Credit Total State Credit Total State Credit Expiration Date 12/31/2018 12/31/2018 12/31/2018 12/31/2019 12/31/2020 12/31/2016 12/31/2016 6/30/2017 12/31/2019 1/1/2015 1/1/2015 12/31/2018 12/31/2018 12/31/2019 12/31/2016 12/31/2016 6/30/2017 193 | P a g e Expenditure 4.00730 4.03310 4.05730 4.07500 4.08200 4.08700 4.08800 4.09600 4.09800 4.09900 4.10300 4.3.5 6.00100 6.00200 6.00300 6.00600 Table 1: Summary of Expired Provisions Summary Tax Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the Sales and Use poverty level Tax Partial sales tax exemption for jet fuel sold to or Sales and Use used by a qualifying airline at a qualifying airport Tax Exemption for food and food ingredients that are donated following a natural disaster and used for disaster relief Sales and Use Tax Sales tax holiday for back to school items Sales and Use Tax Sales tax holiday for water-efficient and energy- Sales and Use efficient purchases Tax Sales of tangible personal property used to renovate or expand a zoological institution Sales and Use Tax Sale of tangible personal property used in the construction of a qualified civil rights museum Sales and Use Tax Exemption for sales or use of construction materials used for or in the construction of buildings at a private college Sales and Use Tax Sales of tangible personal property and services to a qualified job training organization Sales and Use Tax Exemption for expenses related to the renovation or expansion of qualified theatres Sales and Use Tax Exemption for construction materials used in Sales and Use construction of an automobile museum Tax Exemption for the sale and use of jet fuel Sales and Use Tax Motor fuel tax refunds for agricultural purposes Motor Fuel Tax Sale of fuel to mass transit vehicles Motor Fuel Tax Sale of fuel to campus transportation vehicles Motor Fuel Tax Motor fuel tax exemption for public school buses Motor Fuel Tax Expiration Date 6/30/2019 6/30/2015 6/30/2020 7/31/2016 10/2/2016 6/30/2018 7/30/2015 6/30/2016 6/30/2020 1/1/2019 12/31/2020 6/30/2019 6/30/2015 6/30/2015 6/30/2015 6/30/2015 194 | P a g e Table 2: Sales and Use Tax Expenditures by Type Expenditure Summary State FY 2019 Sales Tax Exemption for a Business Input4 Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign 4.01700 commerce 5 State FY 2020 5 State FY 2021 5 4.03410 4.03420 4.03910 4.04500 4.04800 4.06000 4.06400 4.06500 4.06800 Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine parts Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property The sale or use of paper stock when used to print catalogs for distribution outside Georgia Sale of crab bait to licensed commercial fishermen Sale of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less Sale of electricity or fuels used exclusively for the operation of an irrigation system on a farm for crop irrigation (expired December 31, 2012) Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen Sale of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million Estimate not available at this time (m) (m) (m) Estimate not available at this time Estimate not available at this time (m) (m) (m) (m) (m) (m) x x x (m) (m) (m) Estimate not available at this time 4.06900 4.07000 4.08100 4.08300 Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Sale of natural gas used directly in the manufacture of electricity The purchase of food and nonalcoholic beverages provided at no charge aboard a qualified airline Sale of biomass materials used to produce electricity or steam intended for sale Estimate Combined with 4.06000 83 90 99 3 6 7 2 2 2 4 Sales tax exemptions which are defined primarily as an exemption for a profit making business. 195 | P a g e Table 2: Sales and Use Tax Expenditures by Type Expenditure 4.09400 4.3.2 4.3.3 Summary The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale Exemption for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing Sale and use by a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment State State State FY 2019 FY 2020 FY 2021 Estimate Combined with 4.3.3 3,427 3,657 3,858 201 207 213 4.3.4 Exemption for qualified boat repairs (m) (m) (m) Sales Tax Exemption for a Specific Item5 Federal retailer's excise tax if separately itemized to the consumer and Georgia motor 4.00300 fuel tax imposed on the sale of motor fuel Sales of transportation furnished by a county or municipal public transit system or public 4.00400 transit authorities Sales of transportation furnished by an 4.00500 approved and authorized urban transit system Estimate not available at this time 7 7 9 Estimate combined with 4.00400 4.01200 4.01300 4.01600 4.01800 4.02000 4.02200 4.02300 School lunches sold and served to pupils and employees of public schools School lunches sold and served to pupils and employees of approved private schools The sale or use of Holy Bibles; testaments, and similar books commonly recognized as being Holy Scripture regardless of by or to whom sold Charges for transportation of tangible personal property made in connection with interstate or intrastate transportation Water delivered through water mains, lines, or pipes Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made Repair services when a separate charge is made to the customer (m) (m) 7 (m) (m) (m) 0 0 0 Estimate not available at this time 27 28 29 5 Sales tax exemptions which are defined primarily by the item being purchased and not defined, or only generally defined, by the seller or purchaser. 196 | P a g e Expenditure 4.02400 4.03300 4.04200 4.04300 4.04700 4.05000 4.05100 Table 2: Sales and Use Tax Expenditures by Type Summary State FY 2019 Rental of videotape or film to persons charging admission to view the tape or film 2 State FY 2020 1 State FY 2021 3 Common or common and contract carriers Use or lease of tangible personal property when the lessor and lessee are under 100 percent common ownership and where the person who furnishes, leases, or rents the property has paid sales or use tax on the property Revenues from coin-operated amusement machines for which individual permits are required Sale of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or dangerous drugs Sale of insulin syringes and blood glucose level measuring strips dispensed without a prescription Sale of oxygen when prescribed by a licensed physician Estimate not available at this time Estimate not available at this time 47 51 55 453 478 508 39 41 43 5 1 1 4.05200 4.05400 4.05500 4.05700 4.06100 4.06200 Sale or use of hearing aids 6 7 7 Sale or use of any durable medical equipment or prosthetic device prescribed by a physician 40 45 47 Sale of Georgia lottery tickets 209 219 230 Food purchased for off-premises consumption Advertising inserts that are used in newspapers for resale Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member of the producer 620 629 678 Estimate not available at this time 3 3 3 4.06600 Sale of gold, silver, or platinum bullion 3 3 3 197 | P a g e Expenditure 4.06700 4.09100 Table 2: Sales and Use Tax Expenditures by Type Summary State FY 2019 State FY 2020 State FY 2021 Sale of coins or currency The sale of prewritten software which has been delivered to the purchaser electronically or by means of load and leave 1 1 1 Estimate not available at this time 4.10000 4.10200 Exemption for sales of tickets to a qualified fine arts performance or exhibition (m) (m) (m) Partial exemption for qualified manufactured homes 4 4 4 4.3.5 Exemption for the sale and use of jet fuel 23 51 41 Sales Tax Exemption for a Specific Purchaser6 Sales to Federal Government, State of Georgia or a county or municipality in Georgia or any 4.00100 agency of such governments 318 329 341 Sales to any Hospital Authority created by 4.00600 Georgia law 86 89 91 Sales to any Housing Authority created by 4.00610 Georgia law 5 5 6 Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating 4.00620 a coliseum and related facilities (m) (m) (m) 4.00630 4.00700 4.00705 4.00710 4.00720 Sales to any agricultural commission created by the Department of Agriculture (m) (m) (m) Sales of tangible personal property and services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function 131 139 147 Sales of tangible personal property to a non- profit health center established and receiving funds pursuant to the U.S. Public Health Service Act 1 1 1 Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities 1 1 1 Sales to Georgia Society of the Daughters of the American Revolution (m) (m) (m) 6 Sales tax exemptions which are defined primarily by the purchaser and not defined, or only generally defined, by the seller or the item being purchased. 198 | P a g e Expenditure 4.00730 4.00800 4.00900 4.01000 4.01100 4.01900 4.02100 4.03100 4.03600 4.03610 4.04000 4.04100 Table 2: Sales and Use Tax Expenditures by Type Summary Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level Sales of tangible personal property and services to the University System of Georgia and its educational units Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Sale of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute All tangible personal property purchased outside this state by a nonresident when the property is brought into Georgia upon the nonresident becoming a resident Sales, transfers or exchanges of tangible personal property resulting from business reorganization when the owners, partners, or stockholders maintain the same proportionate interest or share in the newly formed business Sale of tangible personal property manufactured or assembled in Georgia for export when delivery is taken outside of Georgia Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water pollution Machinery and equipment used for water conservation and incorporated into a qualified water conservation facility. Sale of major components or repair parts installed in military aircraft, vehicles, or missiles Sale of tangible personal property and services to a nonprofit child-caring institution, childplacing agency, or maternity home State State State FY 2019 FY 2020 FY 2021 2 2 2 49 50 51 Estimate combined with 4.00800 5 5 5 (m) (m) (m) Estimate not available at this time Estimate not available at this time Estimate not available at this time (m) (m) (m) Estimate not available at this time 28 33 33 1 1 1 199 | P a g e Expenditure 4.04600 4.06810 4.07100 Table 2: Sales and Use Tax Expenditures by Type Summary State FY 2019 Sale of tangible personal property or taxable services to nonprofit blood banks 1 State FY 2020 1 State FY 2021 1 High-Tech Data Center Equipment Exemption 15 12 13 Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries (m) (m) (m) 4.07600 Exemption for personal property used in the renovation or expansion of an aquarium 1 (m) 0 Sale of tangible personal property used for and in the construction of a competitive project of 4.09300 regional significance 9 9 9 4.09700 Sales of admission to a nonrecurring major sporting event (m) (m) 0 Exemption for construction materials used in 4.10300 construction of an automobile museum (m) 0 0 4.10400 Exemption for poultry diagnostic and disease monitoring service nonprofit organization (m) (m) (m) Sales Tax Exemption for a Specific Purchaser of a Specific Item7 4.01510 Sales of pipe organs or steeple bells to any church qualifying as a nonprofit (m) (m) (m) 4.03000 Vehicles purchased by service-connected disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase a specially adapted the vehicle (m) (m) (m) 4.03200 Aircraft, watercraft, motor vehicles, and other transportation equipment manufactured or assembled in this State for exclusive use outside Georgia Estimate not available at this time 4.04400 Sale of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state Estimate not available at this time 4.05300 Transactions where food stamps or WIC coupons are used as the method of payment 161 151 142 4.05710 Sales of food and beverages to a qualified food bank 1 1 1 7 Sales tax exemptions which are specifically defined by the purchaser as well as the item being purchased. 200 | P a g e Expenditure Table 2: Sales and Use Tax Expenditures by Type Summary State FY 2019 State FY 2020 State FY 2021 4.06300 Funeral merchandise when paid with funds from the Georgia Crime Victims Emergency Fund 4.07200 Sale of prescribed mobility enhancing equipment 4.08600 Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft 4.10100 The sale of certain written material by a nonprofit Sales Tax Exemption for a Specific Seller8 4.00200 Tangible personal property furnished by the Federal Government or any county or municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system 4.01500 Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious institution 4.03800 Sale of tangible personal property and fees and charges for services by the Rock Eagle 4H Center 4.03900 Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions 4.05600 4.05720 4.05900 4.3.6 4.70000 Sale by any qualified nonprofit parent teacher organization Exemption for prepared food and food ingredients that are donated to a qualified nonprofit agency and used for hunger relief purposes Sale of eligible food and beverages by any Girl or Boy Scout council Exemption for sales within an enterprise zone Compensation of dealers for reporting and paying tax (m) (m) (m) (m) (m) (m) 22 22 23 8 0 0 3 3 3 (m) (m) (m) (m) (m) (m) (m) (m) 2 (m) (m) (m) (m) 0 0 2 2 2 Estimate not available at this time 83 86 89 8 Sales tax exemptions which are specifically defined by the seller. 201 | P a g e Tables 3-9: Distributional Tables of Selected Provisions Tables 3 through 9 provide information on the distribution across Georgia AGI for selected exemptions and deductions from the state personal income tax. The data used to produce the tables are from the state personal income tax files for 2019. It has not been adjusted for inflation, nor does it reflect any legislative changes that may have occurred since 2019. Column 1 of each table provides the categories of Georgia AGI. Column 2 (Number of Returns) provides the number of returns for each AGI category. Column 3 (Average Value) gives the average value of the tax exemption or deduction taken by filers in each AGI category. Column 4 (Total) provides the total value of the deduction or exemption associated with each AGI category and column 5 (Percent of Total) provides the percent of the total value of the deduction or exemption that falls into that AGI category. Table 3: Total Personal Exemptions GA AGI 0 Number of Returns 361,722 Average Value $4,881 Total $1,765,696,800 0