Georgia tax expenditure report for FY 2012

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 29, 2010

The Honorable Sonny Perdue, Governor The Honorable Nathan Deal, Governor-elect The Honorable Casey Cagle, Lieutenant Governor The Honorable David Ralston, Speaker of the House Members of the General Assembly
Ladies and Gentlemen:
I am pleased to submit to you Georgia's first tax expenditure report prepared by Georgia State University on behalf of the Department of Audits and Accounts. This report was prepared for inclusion in the Governor's Budget Report as required by Georgia Code 45-12-75. A copy of this report will be made available to the public on the Governor's Office of Planning and Budget's website and is also filed as a permanent record with the State Auditor.
This report provides a comprehensive listing of the state's statutory tax provisions ("tax expenditures") that allow preferential tax treatment of certain types of taxpayers or activities. Although not direct government expenditures, tax expenditures represent an allocation of government resources in the form of taxes that could have been collected (and appropriated) if not for their preferential tax treatment. To the extent possible, the dollar value of each tax expenditure has been included in this report. It is important to note, however, that data for numerous tax expenditures is not captured by the Department of Revenue. In these instances, the lack of available information is either noted or an estimate, if possible, is provided. The data included in this report has not been verified or validated by the Department of Audits and Accounts and no opinion or other form of assurance is expressed on this data.
We appreciate the staff of the Georgia State University Fiscal Research Center for preparing this report.
Respectfully submitted,

Russell W. Hinton State Auditor
RWH/ec ______________________________________________________________________________
Mission Statement The Department of Audits exists to provide decision-makers with credible management information to promote
improvements in accountability and stewardship in state and local government.

GEORGIA TAX EXPENDITURE REPORT
FOR FY2012
Prepared by the Fiscal Research Center at the Andrew Young School of Policy Studies at Georgia State University December 2010

Funding for this project was provided by the Georgia Department of Audits and Accounts. We would like to thank John Foster, Pamela Goshay, and Beverly Bennett of the Georgia Department of Revenue for their contributions to the preparation of this report. We also benefited from the research assistance of Zackary Hawley and Andrew Stephenson of Georgia State University and Dr. William Smith of the University of West Georgia. Lastly, we would like to thank Leslie McGuire and Ed Blaha of the Georgia Department of Audits and Accounts for their comments and recommendations on this report. All estimates presented in this report are the work of the Fiscal Research Center. We are solely responsible for its contents.
2

Table of Contents Introduction..................................................................................................... 4 Summary of State Tax Expenditures.......................................................................10 Expenditure Estimates
1. Personal Income Tax.............................................................................23 2. Corporate Income Tax...........................................................................35 3. Corporate Net Worth Tax.......................................................................54 4. Sales and Use Tax...............................................................................55 5. Insurance Premium Tax........................................................................82 6. Motor Fuel Tax..................................................................................85 7. Alcoholic Beverages Tax.......................................................................88 8. Cigar and Cigarette Excise Tax...............................................................89 9. Financial Institutions Business License Tax.................................................91 10. Land Conservation Credit.....................................................................92
3

Introduction
Tax expenditures are defined as provisions in the tax code that lead to the special treatment of a source of income or a certain type of expense. "Special" treatment refers to the tax provisions that deviate from some normal or standard tax structure. Because such treatment usually results in a reduction in tax liability for the taxpayer, these tax provisions are referred to as "expenditures" because they represent tax revenues that would have been otherwise generated if not for their special treatment in the tax code.
Like direct government expenditures, tax expenditures are an allocation of government resources that are intended to achieve a particular policy outcome or generate economic activity. The value of a tax expenditure can be thought of as representing the amount of money that would be needed in the budget to provide the same level of financial support if offered 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 tax systems such as 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 age 65 and older are allowed to exclude Social Security income from the calculation of taxable income. Lastly, some tax expenditures may be provided in the form of reduced rates for selected items in the tax base, such as the reduced federal tax rate on certain capital gains earnings or the partial sales tax exemption for jet fuel.
Tax Expenditure Report
Preparation of a tax expenditure report is required by Title 45, Chapter 12, Article 4 of the Official Code of Georgia. The purpose of the report is to list all tax expenditures and their value. In this way, they can be tracked over time in a fashion analogous to an annual budget of direct governmental expenditures. While direct expenditures for such items as education or
4

transportation are reviewed annually with every budget, it is usually the case that tax expenditures are 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 special treatment for some taxpayers relative to others. Tax expenditures represent an allocation of government resources in the same manner as direct expenditures. For example, the federal government encourages expenditures on education through direct expenditure programs, such as Pell grants and Stafford loans, and also allows a tax deduction for 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 and subject to annual review.
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 the government expenditures. The benefits of tax expenditures are usually targeted to higher income taxpayers compared to those associated with direct expenditure programs, so that their absence leads to the conclusion that government expenditures are targeted toward less affluent taxpayers. In addition, not all tax expenditure programs have a direct budget counterpart, so without a tax expenditure report, these provisions and their distributional effects escape notice.
Tax expenditures are not necessarily bad policy. However, not recognizing or monitoring the resources being allocated through the tax system is not good fiscal policy. In this regard, it is important to note that a tax expenditure report does not 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.
5

Identifying Tax Expenditures
In general, identifying a tax expenditure is fairly 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. Items treated as exceptions to the general rule or normal tax base are considered tax exemptions. 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 can differ from the list estimated by Congress because each works from a different definition of the standard tax base. The appropriate standard against which tax expenditures are defined is somewhat subjective and is, in some cases, driven by the intent of the policy underlying the legislation.
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 in the tax base 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 translate to the state tax base as well. In some cases, Georgia chooses not to adopt 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 important to note that tax expenditures are not computed for revenue that is due but not collected, such as sales and use taxes due on internet sales.
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 or standard. Consider the personal income tax exemptions. Individuals are allowed to exclude 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 recent legislation allowing for the use of a single-factor apportionment formula in allocating income earned by corporations operating in more than one state. On one hand, 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
6

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 the 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.
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 deductions or credits taken via the provision. Because 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 Experimentation 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 R&D expenditures claimed through the federal Research and Experimentation tax credit would be shifted over to another tax deduction or credit so that the savings to the government would be reduced. In addition, tax expenditure estimates do not incorporate behavioral effects that may occur due to the elimination of a provision. As another example, consider the revenue estimates presented in certain fiscal notes prepared for the General Assembly. For some types of tax credit provisions the revenue effect presented in the fiscal note is computed as the net effect of the cost of the credit reduced by any increase in income and sales taxes revenues due to increased employment and consumption. Note that the tax expenditure estimate for a tax credit does not include this offsetting revenue and therefore depicts a more expensive tax credit relative to that which might be shown in a fiscal note. Due to these factors, tax expenditure estimates can only act as an indication of the revenue effect that would occur if the provision were eliminated or modified.
7

Data Sources and Reliability of Estimates
To the extent possible, data from the 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 Department of Revenue is 2008. Therefore, even in cases where DOR data is used as the primary data source, the tax expenditures presented in this report are estimates.
The reliability of each estimate is categorized into three classes, A, B, and C. Class A estimates are considered the most reliable and are, in most cases, based on actual Georgia tax return data, as provided by the Georgia Department of Revenue. Class B estimates are based on information from a national dataset that has been modified to represent Georgia, such as the Internal Revenue Service Statistics of Income, the Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics, or the American Community Survey from the U.S. Census Bureau. Class C estimates are based on information available from the internet or from proprietary data that may not fully represent the tax consequences in Georgia. Although Class B and C estimates are not based on actual Georgia tax return data, they are considered the best sources available at this time and are believed to provide reasonable estimates. For some items, no reliable information is available. In these cases, no estimate for the expenditure is provided.

Class of Estimate Class A Class B
Class C

Description of Estimate Reliability
Based on tax return data of Georgia taxpayers
Based on national data which has been modified to represent
Georgia
Represents best available information at this time

Examples of Data Sources
Data from Department of Revenue
Consumer Expenditure Survey, Bureau of Economic
Analysis, Census Bureau information
Information from industry surveys and reports, newspaper articles

8

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, special service districts, including tax allocation and community improvement districts, and school districts.
Comprehensiveness of the Report Given the time available to prepare this report, we were unable to develop tax expenditure estimates for all special tax provisions. In future tax expenditure reports, estimates for these missing values will be included. In addition, consideration will be given to whether the list of tax expenditures contained in the current report represents the complete list used in subsequent reports. Lastly, in many cases the effective and enactment dates for the tax expenditure provisions are missing. Retrieving this information requires additional legal research that will be completed at a later date and included in subsequent editions of this report.
9

SUMMARY OF STATE TAX EXPENDITURES

Number

Expenditure Item

PERSONAL INCOME TAX EXPENDITURES

1.4.001 Personal Exemption

1.4.002 Retirement Income

1.4.003 Social Security Income

1.4.004 Georgia Higher Education Savings Plan contributions

1.4.005 Interest on U.S. Obligations

1.4.006 Certain military income

1.4.007 Organ donation expenses

1.4.008 Aged 65/Blind Deduction

1.4.009 Certain dependent's unearned income

1.4.010 Premiums for high deductible health plans

Salaries and wages reduced from Federal taxable income because of the

1.4.011 Federal Jobs Tax credit

1.4.012 Certain IRAs, Keogh, SEP, and Sub-S plan withdrawals

Depreciation because of differences in Georgia and Federal law between

1.4.013 1981 and 1986

Income from any fund, program or system which is exempted by Federal law

1.4.014 or treaty

Certain income in which the Sub-S election is not recognized by Georgia or

1.4.015 another state

Adjustment for certain teachers retired from the Teacher's Retirement

1.4.016 System of Georgia

Amount claimed by employers in food and beverage establishments who

took a credit instead of a deduction on the Federal return for FICA tax paid

1.4.017 on employee cash tips

An adjustment of 1-% of qualified payments to minority subcontractors or

$100,000, whichever is less, per taxable year by individuals, corporations, or

1.4.018 partnerships that are party to state contracts

1.4.019 Adjustments to Federal AGI for certain Georgia resident partners

1.5.001 Standard Deduction

Tax
Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual
Individual Individual
Individual
Individual
Individual
Individual
Individual
Individual Individual Individual

Type
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption
Exemption
Exemption
Exemption
Exemption
Exemption
Exemption Exemption Deduction

$ in Millions FY2010 FY2011 FY2012

886

894

902

218

233

273

222

229

237

2

2

2

N/A

N/A

N/A

N/A

N/A

N/A

(1)

(1)

(1)

20

20

21

N/A

N/A

N/A

1

1

2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

232

234

236

10

SUMMARY OF STATE TAX EXPENDITURES

Number
1.6.001 1.6.002 1.6.003 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 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 1.6.024 1.6.025 1.6.026 1.6.027 1.6.028 1.6.029 1.6.030

Expenditure Item
Rural Physicians Credit Disabled Person Home Purchase or Retrofit Credit Driver Education Credit Disaster Assistance Credit Qualified Caregiving Expense Credit Georgia National Guard/Air National Guard Credit Child and Dependent Care Expense Credit Adoption of Foster Child Credit Low-Income Credit Credit for Taxes Paid to Another State Credit for Taxes Withheld and Estimated Tax Payments Employer's Jobs Tax Credit Quality Jobs Tax Credit New Facilities Jobs Credit New Manufacturing Facilities Property Credit Manufacturer's Investment Tax Credit Optional Investment Tax Credit
Port Activity Tax Credit Alternate Port Activity Tax Credit Film Tax Credit Research Tax Credit Seed-Capital Fund Credit Qualified Health Insurance Expense Credit Teleworking Credit Qualified Transportation Credit Business Enterprise Vehicle Credit Employer's Credit for Providing or Sponsoring Child Care for Employees Low Income Housing Credit Historic Rehabilitation Credit Diesel Particulate Emission Reduction Technology Equipment Credit

Tax
Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual
Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual

Type
Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit
Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit

$ in Millions

FY2010 FY2011 FY2012

1

1

1

N/A

N/A

N/A

1

1

1

4

4

4

N/A

N/A

N/A

1

1

1

26

22

21

8

8

8

13

13

14

N/A

N/A

N/A

N/A

N/A

N/A

See Corporate Credit Section

See Corporate Credit Section

See Corporate Credit Section

See Corporate Credit Section

See Corporate Credit Section

See Corporate Credit Section

See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section

11

SUMMARY OF STATE TAX EXPENDITURES

Number

Expenditure Item

1.6.031 Low/Zero Emission Vehicle Credit & Electric Vehicle Charger Credit

1.6.032 Land Conservation Credit

1.6.033 Clean Energy Property Credit & Wood Residuals Credit

1.6.034 Employer's Credit for Basic Skills Education

1.6.035 Employer's Credit for Approved Employee Retraining

1.6.036 Qualified Education Expense Credit

1.6.037 Investor's Credit

1.6.038 Energy or Water Efficient equipment credit

Tax credit for water conservation facilities and qualified water conservation

1.6.039 investment property

1.6.040 Tax credit for shift from ground-water usage

Tax credit for existing business enterprises undergoing qualified business

1.6.041 expansion

1.6.042 Cigarette export tax credit

CORPORATE INCOME TAX EXPENDITURES

2.4.001 Single-Factor apportionment

2.4.002 Throw-back sales

2.4.003 Market-based sourcing

2.5.001 Interest on obligations of United States

2.5.002 Exception to intangible expenses and related interest cost

2.6.001 Employer's Jobs Tax Credit

2.6.002 Quality Jobs Tax Credit

2.6.003 New Facilities Jobs Credit

2.6.004 New Manufacturing Facilities Property Credit

2.6.005 Manufacturer's Investment Tax Credit

2.6.006 Optional Investment Tax Credit

2.6.007 Port Activity Tax Credit

2.6.008 Alternate Port Activity Tax Credit

2.6.009 Film Tax Credit

2.6.010 Research Tax Credit

Tax
Individual Individual Individual Individual Individual Individual Individual Individual

Type
Credit Credit Credit Credit Credit Credit Credit Credit

Individual Credit Individual Credit

Individual Credit Individual Credit

Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate

Exemption Exemption Exemption Deduction Deduction Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit

$ in Millions FY2010 FY2011 FY2012
See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section See Corporate Credit Section

See Corporate Credit Section See Corporate Credit Section

See Corporate Credit Section See Corporate Credit Section

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

9

9

9

21

21

21

N/A

N/A

N/A

N/A

N/A

N/A

3

3

3

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

57

73

89

7

7

7

12

SUMMARY OF STATE TAX EXPENDITURES

Number

Expenditure Item

2.6.011 Seed-Capital Fund Credit

2.6.012 Qualified Health Insurance Expense Credit

2.6.013 Teleworking Credit

2.6.014 Qualified Transportation Credit

2.6.015 Business Enterprise Vehicle Credit

2.6.016 Employer's Credit for Providing or Sponsoring Child Care for Employees

2.6.017 Low Income Housing Credit

2.6.018 Historic Rehabilitation Credit

2.6.019 Diesel Particulate Emission Reduction Technology Equipment Credit

2.6.020 Low/Zero Emission Vehicle Credit & Electric Vehicle Charger Credit

2.6.021 Land Conservation Credit

2.6.022 Clean Energy Property Credit & Wood Residuals Credit

2.6.023 Employer's Credit for Basic Skills Education

2.6.024 Employer's Credit for Approved Employee Retraining

2.6.025 Qualified Education Expense Credit

2.6.026 Investor's Credit

2.6.027 Energy or Water Efficient equipment credit

Tax credit for water conservation facilities and qualified water conservation

2.6.028 investment property

2.6.029 Tax credit for shift from ground-water usage

Tax credit for existing business enterprises undergoing qualified business

2.6.030 expansion

2.6.031 Cigarette export tax credit

CORPORATE NET WORTH TAX EXPENDITURES

3.00100 Exemption for nonprofit corporations

3.00200 Exemption for insurance companies

Tax
Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate

Type
Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit

Corporate Credit Corporate Credit

Corporate Credit Corporate Credit

Net Worth Exemption Net Worth Exemption

SALES TAX EXPENDITURES

Sales to Federal Government, State of Georgia or a county or municipality in

4.00100 Georgia or any agency of such governments

Sales Tax Exemption

$ in Millions

FY2010 FY2011 FY2012

3

3

3

12

14

16

2

2

0

(1)

(1)

(1)

(1)

(1)

(1)

2

2

2

2

2

2

15

18

18

(1)

(1)

(1)

3

5

12

6

6

6

3

3

3

(1)

(1)

(1)

5

5

5

37

45

50

0

0

0

0

0

0

N/A

N/A

N/A

N/A

N/A

N/A

2

2

3

0

0

0

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

13

SUMMARY OF STATE TAX EXPENDITURES

Number
4.00200 4.00300 4.00400 4.00500 4.00600 4.00610
4.00620 4.00630
4.00700
4.00705
4.00710 4.00720
4.00730 4.00800

Expenditure Item
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. Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel Sales of transportation furnished by a county or municipal public transit system or public transit authorities Sales of transportation furnished by an approved and authorized Urban Transit System Sales to any Hospital Authority created by Georgia Law Sales to any Housing Authority created by Georgia Law 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 Sales to any agricultural commission created by the Department of Agriculture Sales of tangible personal property and services used specifically in the treatment function by an approved nursing home, inpatient hospice, general hospital or mental hospital when qualifying as a nonprofit by the IRS. Sales of tangible personal property to a nonprofit health center established and receiving funds pursuant to the U.S. Public Health Service Act. (expired 6/30/2010) Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities. Sales to Georgia Society of the Daughters of the American Revolution Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200% of the poverty level (expired 6/30/2010) Sales of tangible personal property and services to the University System of Georgia and its educational units

Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Sales Tax Sales Tax
Sales Tax
Sales Tax
Sales Tax Sales Tax
Sales Tax Sales Tax

Type
Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption
Exemption
Exemption
Exemption Exemption
Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

N/A

N/A

N/A

N/A

N/A

N/A

5

5

5

Combined with estimate for

4.00400

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

(1)

0

0

N/A

N/A

N/A

N/A

N/A

N/A

(1)

0

0

50

52

55

14

SUMMARY OF STATE TAX EXPENDITURES

Number
4.00900 4.01000 4.01100 4.01200 4.01300 4.01400 4.01500 4.01510 4.01700 4.01800
4.01900 4.02000
4.02100 4.02200 4.02300 4.02400

Expenditure Item
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 of Georgia System. Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Sales of tangible personal property and services to any nonprofit cultural institute that is an instrument of a foreign government operating in Georgia 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 Sales of art and other artifacts for display or exhibition to museums Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year. Sales of pipe organs or steeple bells to any church qualifying as a nonprofit 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, 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 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. Rental of videotape or film to persons charging admission to view the tape or film

Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Sales Tax Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax

Type
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption
Exemption Exemption Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

8

9

9

2

2

2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1

1

1

N/A

N/A

N/A

N/A

N/A

N/A

See estimates for 4.50000

N/A

N/A

N/A

See estimates for 4.50000 See estimates for 4.50000

N/A

N/A

N/A

15

SUMMARY OF STATE TAX EXPENDITURES

Number
4.02500 4.02600 4.02700 4.02800 4.02900
4.02910
4.03000 4.03100 4.03200 4.03300 4.03310 4.03400 4.03410 4.03420 4.03430

Expenditure Item
Sale of seed, fertilizer, fungicide, and certain other agricultural chemicals to farmers, and feed for livestock, fish, or poultry purchased by persons engaged in animal husbandry Sale of machinery used exclusively for irrigation of crops to persons primarily engaged in producing farm crops for sale Sales of sugar for use as food to honey bee producers Sale of cattle, hogs, sheep, horses, poultry, or bees when sold for breeding purposes Sale of certain types of agricultural machinery Off-road equipment and related attachments used exclusively in site preparation, planting, cultivating, or harvesting of timber by persons primarily engaged in growing or harvesting timber Vehicles purchased by service-connected disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase the specially adapted 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 Common or Common and Contract Carriers Partial sales tax exemption for jet fuel sold to or used by a qualifying airline at a qualifying airport (expires 6/30/2011) Certain machinery used in the manufacturing of tangible personal property 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 The sale or use of repair or replacement parts, machinery clothing, molds, dies, waxes or tooling for machinery

Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

Type
Exemption Exemption Exemption Exemption Exemption
Exemption
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

107

112

117

1

1

1

N/A

N/A

N/A

2

2

2

9

10

10

Combined with estimate for 4.02900

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

See expenditure estimate for

6.00700

138

145

152

N/A

N/A

N/A

(1)

(1)

(1)

N/A

N/A

N/A

16

SUMMARY OF STATE TAX EXPENDITURES

Number
4.03440 4.03500 4.03600 4.03610 4.03700 4.03800 4.03900 4.03910 4.04000 4.04100
4.04200 4.04300 4.04400 4.04500 4.04600

Expenditure Item
Sales of tangible personal property to or used in or for the construction of a new alternative fuel facility primarily dedicated to the production and processing of ethanol, biodiesel, butanol or their by-products (expires 6/30/2012) Certain materials used in industrial packaging 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. Machinery and equipment used in combating air and water pollution and any industrial material used in a burning or recycling process Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H Center Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property 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 institute, child-placing agency, or maternity home 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 Sales of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state The sale or use of paper stock when used to print catalogs for distribution outside Georgia Sales of tangible personal property or taxable services to nonprofit Blood

Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

Type
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption Exemption Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

2

2

2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1

1

1

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

17

SUMMARY OF STATE TAX EXPENDITURES

Number
4.04700 4.04800 4.04900
4.04910
4.05000 4.05100 4.05200
4.05300
4.05400 4.05500 4.05600 4.05700 4.05710

Expenditure Item
Banks Sales of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or dangerous drugs Sales of crab bait to licensed commercial fisherman Liquefied gases and other fuels used in poultry or pullet houses or structures Liquefied petroleum gas or other fuel used in a structure where swine are raised (expired 6/30/2010) Sales of blood measuring devices, monitoring equipment, or insulin delivery systems used exclusively by diabetics; insulin, insulin syringes and blood glucose monitoring strips Sales of oxygen when prescribed by a licensed physician Sale or use of hearing aids Transactions where food stamps or WIC coupons are used as the method of payment Sale or use of any durable medical equipment or prosthetic device prescribed by a physician Sale of Georgia lottery tickets Sales by any qualified nonprofit parent teacher organization Sales of eligible food for off-premises consumption Sales of food and beverages to a qualified food bank (expired 6/30/2010)

Tax
Sales Tax Sales Tax Sales Tax
Sales Tax
Sales Tax Sales Tax Sales Tax
Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

4.05720 4.05730 4.05800 4.05900 4.06000

Exemption for persons donating prepared food and beverages to a qualified nonprofit agency to be used for hunger relief (expires 6/30/2011) Exemption for prepared food and beverages that are donated following a natural disaster and used for disaster relief (expires 6/30/2011) Graduated exemption for the sale of overhead materials used in government contracts (repealed effective January 1, 2011) Sales of eligible food and beverages for on or off-premises consumption by any Girl or Boy Scout council
Sales of certain machinery and equipment used to improve air quality in a

Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

Type
Exemption Exemption Exemption
Exemption
Exemption Exemption Exemption
Exemption
Exemption Exemption Exemption Exemption Exemption
Exemption
Exemption
Exemption
Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

318

334

351

N/A

N/A

N/A

3

3

3

(1)

0

0

N/A

N/A

N/A

7

7

8

N/A

N/A

N/A

109

109

104

32

33

35

132

138

145

N/A

N/A

N/A

440

463

494

(1)

0

0

Combined with estimate for 4.05730

(1)

(1)

0

15

(1)

0

N/A

N/A

N/A

N/A

N/A

N/A

18

SUMMARY OF STATE TAX EXPENDITURES

Number
4.06100 4.06200 4.06300 4.06400 4.06500 4.06600 4.06700 4.06800 4.06900 4.07000
4.07010 4.07100 4.07200 4.07300 4.07700

Expenditure Item
clean room of Class 100,000 or less
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 Funeral merchandise when paid with funds from the Georgia Crime Victims Emergency Fund Sales of electricity or fuels used exclusively for the operation of an irrigation system on a farm for crop irrigation Sales of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fisherman Sales of gold, silver, or platinum bullion Sales of coins or currency Sales of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Sales of natural gas used directly in the manufacture of electricity Partial exemption for certain sales of natural or artificial gas, fuel oil, propane, petroleum coke and coal used directly or indirectly in the manufacture or processing of tangible personal property primarily for resale (expired 12/31/2010) Sales to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries Sales of wheelchairs and attachments for wheelchairs when sold to permanently disabled individuals Sales of certain production equipment to film producers and film production companies Liquefied gases and other fuels used in structures where plants, floral products, seedlings, and nursery stock are grown for sale

Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

Type
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption Exemption Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

28

29

31

4

2

0

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

19

SUMMARY OF STATE TAX EXPENDITURES

Number
4.07800 4.07900
4.08100
4.08300
4.08600
4.08700
4.08800 4.08900 4.30000 4.50000 4.70000

Expenditure Item
Materials used to construct a new symphony hall costing in excess of $200 million that is owned and operated by a nonprofit organization (expires 9/1/2011) Ice used to chill poultry or vegetables during processing or shipment 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 or used to produce electricity and steam intended for sale Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft (expires 6/30/2011) Sales of tangible personal property used to renovate or expand a zoological institution (expires 6/30/2011) Sales of tangible personal property used in the construction of a qualified civil rights museum (expires 7/30/2015) The sale of an airplane flight simulation training device (expires 6/30/2011) Exemption for casual sales Exemption for selected services (combined value) Vendor compensation

INSURANCE PREMIUM TAX EXPENDITURES 5.00100 Deduction of retaliatory taxes paid to other states
5.00200 Insurance premium tax credits 5.00300 Exemption for premiums of high deductible health plans 5.00400 Exemption for insurance companies that only insure places of worship

5.00500 Insurance abatements 5.00600 Special deductions for Life Insurance companies MOTOR FUELS TAX EXPENDITURES

6.00100 Bulk sales to another licensed dealer 6.00200 Sales to mass transit vehicles

Tax
Sales Tax Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax
Insurance Insurance Insurance Insurance
Insurance Insurance
Motor Fuels Motor

Type
Exemption Exemption
Exemption
Exemption
Exemption
Exemption
Exemption Exemption Exemption Exemption Exemption
Deduction Credit Exemption Exemption Rate Reduction Deduction
Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

(1) N/A
N/A
N/A
7
(1)
1 (1) 122 4,072 45

(1) N/A
N/A
N/A
7
(1)
1 1 131 4,270 47

(1) N/A
N/A
N/A
0
0
(1) 0 149 4,484 49

3

4

4

51

61

63

12

14

17

N/A

N/A

N/A

131

158

163

96

116

119

N/A

N/A

N/A

7

9

11

20

SUMMARY OF STATE TAX EXPENDITURES

Number

Expenditure Item

6.00300 Sales to campus transportation vehicles

6.00400 Sales of fuels not sold by the gallon

6.00500 Sales to a licensed dealer for export from Georgia

6.00600 6.00700 6.00800

Sales to the United States government Partial exemption for sales of aviation gasoline to a licensed aviation gasoline dealer Bulk sales of compressed petroleum gas or special fuel to a duly licensed consumer distributor

6.00900 Sales of fuel oils and other fuels sold to consumers for heating purposes only

6.01000 Sales of dyed fuel oils to a consumer other than for highway use Fuel oils, compressed petroleum gas or special fuel used by a licensed
6.01100 distributor for non-highway purposes ALCOHOLIC BEVERAGES TAX EXPENDITURES 7.00100 Sales to persons outside the state for resale or consumption outside the state 7.00200 Sales to stores or canteens in U.S. military reservations 7.00300 Up to 200 gallons annually of home-brew per household 7.00400 Sales to and use by religious organizations for sacramental purposes 7.00500 Exemption for ethyl alcohol used for certain purposes 7.00600 Malt beverages containing less than of 1 percent of alcohol by volume
TOBACCO TAX EXPENDITURES Exemption for purchases for use exclusively by patients at the Georgia War
8.00100 Veterans Home and the Georgia War Veterans Nursing Home 8.00200 Di minimus amount brought into the state by one person

Tax
Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels Motor Fuels
Alcohol Alcohol Alcohol Alcohol Alcohol Alcohol
Tobacco Tobacco

Type
Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption Exemption Exemption Exemption Exemption
Exemption Exemption

$ in Millions FY2010 FY2011 FY2012

Combined with estimate for 6.00200

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

24

23

22

N/A

N/A

N/A

N/A

N/A

N/A

13

13

12

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

(1)

(1)

(1)

N/A

N/A

N/A

21

SUMMARY OF STATE TAX EXPENDITURES

Number

Expenditure Item

Tax

8.00300 Cigars and cigarettes stored in a public warehouse

Tobacco

8.00400 Certain cigars and cigarettes held by licensed dealers

Tobacco

FINANCIAL INSTITUTIONS TAX EXPENDITURES

Financial

9.00100 Deductions for interest paid on all liabilities

Inst.

Deductions for income from authorized activities of a domestic international Financial

9.00200 banking facility

Inst.

Deduction for income from banking business with persons or entities outside Financial

9.00300 the U.S.

Inst.

SPECIAL ASSESSMENT OF FOREST LAND CONSERVATION USE PROPERTY

State

10.00000 Special assessment of Forest Land Conservation Use Property

Grant

(1) Denotes a value of less than $1 million.; N/A means estimate is not available.

Type
Exemption Exemption
Deduction Deduction Deduction
Credit

$ in Millions

FY2010 FY2011

N/A

N/A

N/A

N/A

FY2012
N/A N/A

7

7

8

N/A

N/A

N/A

N/A

N/A

N/A

0

11

11

22

1. Personal Income Tax
The personal income tax was first levied in Georgia in 1929 at a rate equal to one third the federal rate of income taxation. The current rate structure which includes 6 brackets, ranging from 1 percent to 6 percent, has 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 or head of household, married filing separate or joint. The individual income tax collections equaled $8.8 billion in FY2008 and accounted for 50 percent of Georgia's revenues from taxation. In FY2008, 4.3 million individual returns were filed with the state. While predominately paid by individuals, a significant number of business activities 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.
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 Georgia AGI. After computing Georgia AGI, taxpayers deduct an amount representing either the value of their Georgia itemized deductions or the Georgia standard deduction. In addition, filers are allowed a personal exemption of $5,400 for joint filers and $2,700 for other filers and $3,000 for each dependent.
For purposes of this report we define individual tax expenditures as those expenditures that are in addition to those allowed at the federal level. That is, federal AGI is used as the comprehensive base and any deviations from that base are considered state individual income tax expenditures.

1.4 Income Exemptions

__________________________________________________________________________

1.4.001

Personal Exemption

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-26 Information is not available at this time Information is not available at this time Department of Revenue master file for 2005 Class A

Description: Georgia allows a personal exemption equal to $5,400 for joint returns and $2,700 for taxpayers' filing non-joint returns. $3,000 is excluded from income for each dependent claimed on the tax return.

23

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

886

894

902

__________________________________________________________________________

1.4.002

Retirement Income

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time U.S. Census Bureau, American Community Survey, 2009 Class B

Description: Between 2008 and prior to 2012, a maximum of $35,000 of retirement income from any source is excluded from income. This income exclusion may include a maximum of $4,000 of earned income. This provision applies to individuals aged 62 and above. For tax years beginning in 2012, individuals aged 65 and above may exclude a maximum of $65,000 of retirement income.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$218

$233

$273

__________________________________________________________________________

1.4.003

Social Security Income

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Internal Revenue Service, Statistics of Income Class A

Description: Social Security and tier 1 Railroad retirement benefits are excluded from state taxable income.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$222

$229

$237

24

__________________________________________________________________________

1.4.004

Georgia Higher Education Savings Plan Contributions

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Georgia Office of the State Treasurer Class B

Description: An exemption from income is allowed for contributions to a qualified higher education savings plan. The exemption is limited to $2,000 per qualified plan beneficiary.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

________________________________________________________________________

1.4.005

Interest on U.S. Obligations

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Not applicable Not applicable

Description: Interest earned on U.S. government bonds and other obligations are not included as taxable income.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This exemption is not tracked by DOR. No information is available at this time.

__________________________________________________________________________

1.4.006

Certain Military Income

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time 2010 Information is not available at this time Not applicable Not applicable

25

Description: Military income received by a member of the National Guard or any reserve component of the armed forces and only with respect to the income earned during the period covered by such military orders.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This exemption is not tracked by DOR.

No information is available at this time.

__________________________________________________________________________

1.4.007

Organ donation expenses

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time 2008 Annual Report for U.S. Transplant.org Class C

Description: Expenses associated with the donation of organs in accordance with the "National Organ Procurement Act". The maximum value of excluded expenses cannot exceed $10,000.

State Fiscal Years ($ in Millions)

2010

2011

2012

Expenditure Estimate

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

__________________________________________________________________________

1.4.008

Aged 65/Blind Deduction

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Department of Revenue master file for 2005 Class A

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.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

20

20

21

26

__________________________________________________________________________

1.4.009

Certain dependent's unearned income

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Not applicable Not applicable

Description: Taxpayers are able to exclude unearned income of dependents that was included in the federal AGI of a parent's return.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

The value of this expenditure is not available at this time.

__________________________________________________________________________

1.4.010

Premiums for high deductible health plans

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 Information is not available at this time Information is not available at this time Fiscal Note for HB 977/2008 LC 37 0690S Class C

Description: Taxpayers are allowed to exclude 100 percent of premiums paid for certain high deductible health plans.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$2

__________________________________________________________________________ Other Income Tax Exemptions include:

1.4.011 1.4.012
1.4.013

Salaries and wages reduced from Federal taxable income because of the Federal Jobs Tax Credit 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.

27

1.4.014 1.4.015 1.4.016 1.4.017 1.4.018 1.4.019

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 teachers retired from the Teacher's Retirement System of Georgia for contributions paid between July 1, 1987 and December 31, 1989 that were reported to and taxed by Georgia. Amount claimed by employers in food and beverage establishments who took a credit instead of a deduction on the Federal return for FICA tax paid on employee cash tips. An adjustment of 10% of qualified payments to minority subcontractors or $100,000, whichever is less, per taxable year by individuals, corporations or partnerships that are party to state contracts. Adjustments to Federal adjusted gross income for Georgia resident partners in a partnership or member(s) in a LLC where such entities income has been taxed at the entity for the portion of income on which the tax was actually paid.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

The values for these exemptions are not

available at this time.

1.5 Deductions from Income

__________________________________________________________________________

1.5.001

Standard Deduction

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-27 1981 CY1981 Department of Revenue master file for 2005 Class A

Description: Taxpayers that do not itemize expenses on their federal return are allowed a standard deduction equal to $2,300 for head of household filers, $1,500 for married filing separately, and $3,000 in the case of joint filers.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

232

234

236

28

1.6 Income Tax Credits _____________________________________________________________________ The following tax credits are offered to both non-corporate businesses filing a personal income tax return and corporations filing a corporate return. The value of the credits claimed by businesses filing individual returns are reported under the corporate tax section of this report.

1.6.012 1.6.013 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 1.6.024 1.6.025 1.6.026 1.6.027
1.6.028 1.6.029 1.6.030 1.6.031 1.6.032 1.6.033 1.6.034 1.6.035 1.6.036 1.6.037 1.6.038 1.6.039
1.6.040 1.6.041
1.6.042

Employer's Jobs Tax Credit Quality Jobs Tax Credit New Facilities Jobs Credit New Manufacturing Facilities Property Credit Manufacturer's Investment Tax Credit Optional Investment Tax Credit Port Activity Tax Credit Alternate Port Activity Tax Credit Film Tax Credit Research Tax Credit Seed-Capital Fund Credit Qualified Health Insurance Expense Credit Teleworking Credit Qualified Transportation Credit Business Enterprise Vehicle Credit Employer's Credit for Providing or Sponsoring Child Care for Employees & Employer's Credit for Purchasing Child Care Property Low Income Housing Credit Historic Rehabilitation Credit Diesel Particulate Emission Reduction Technology Equipment Credit Low/Zero Emission Vehicle Credit & Electric Vehicle Charger Credit Land Conservation Credit Clean Energy Property Credit & Wood Residuals Credit Employer's Credit for Basic Skills Education Employer's Credit for Approved Employee Retraining Qualified Education Expense Credit Investor's Credit Energy or Water Efficient equipment credit Tax credit for water conservation facilities and qualified water conservation investment property Tax credit for shift from ground-water usage Tax credit for existing business enterprises undergoing qualified business expansion Cigarette export tax credit

The following credits from income are taken by personal taxpayers on the individual income tax return. _____________________________________________________________________
29

1.6.001
Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

Rural Physician's Credit
48-7-29 1995 Tax years prior to 2000 U.S. Department of Health and Human Services, Health Resources and Services Administration, Area Resource File Class C

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 tax liability annually and may be claimed for 5 years.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

__________________________________________________________________________

1.6.002

Disabled person home purchase or retrofit credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.1 1998 Tax years prior to 2000 Not applicable Not applicable

Description: This expenditure provides a $500 credit for the purchase of a new single-family home containing accessibility features or for the retrofit of an existing home. In no case shall the credit exceed the taxpayer's tax liability. Unused credits can be carried forward for three years.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by DOR. No

information not available at this time.

__________________________________________________________________________

1.6.003

Driver Education Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.5 2000 January 1, 2001 Georgia Department of Driver Services Class B

30

Description: This expenditure provides a credit against income tax for the lesser of $150 and the cost of a qualified driver education class.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

__________________________________________________________________________

1.6.004

Disaster Assistance Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.4 2000 April 17, 2000 Federal Emergency Management Agency disaster press releases Class C

Description: This credit is for individuals receiving disaster relief payments from the Georgia Emergency Management Agency or from the Federal Emergency Management Agency. The value of the credit is the actual amount of the disaster relief assistance or $500, whichever is less.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$4

$4

$4

__________________________________________________________________________

1.6.005

Qualified Caregiving Expense Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.2 1998 Tax years prior to 2000 Not applicable Not applicable

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 tax income tax liability, whichever is less.

31

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by DOR. No

information is available at this time.

__________________________________________________________________________

1.6.006

Tax Credit for Life Insurance for Georgia National Guard and Air

National Guard

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.9 2005 April 21, 2005 Georgia Office of Defense Annual Report for 2009 Class C

Description: This credit is available for active duty members of the Georgia National Guard and Air National Guard who purchase qualified life insurance through the Services' Group Life Insurance Program administered by the U.S. Department of Veterans Affairs. The value of the credit is equal to the cost of the premiums of the life insurance policy.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

__________________________________________________________________________

1.6.007

Child and Dependent Care Credit

Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

48-7-29.10 2006 April 6, 2006 U.S. Congressional Joint Committee on Taxation, Tax Expenditure Report for 2010 Class B

Description: This credit is equal to 30 percent of the federal credit claimed for qualified expenses related to the care of children and dependents.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$26

$22

$21

32

__________________________________________________________________________

1.6.008

Adoption of Foster Child Credit

Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

48-7-29.15 2008 Tax years beginning on or after January 1, 2008 U.S. Department of Health and Human Services, Administration for Children and Families Class B

Description: This expenditure 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.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

$8

$8

$8

__________________________________________________________________________

1.6.009

Low-Income Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7A -3 1991 Tax years prior to 2000 Department of Revenue master file for 2005 Class A

Description: This expenditure provides a tax credit for low-income individuals. The maximum value of the credit is $26 per taxpayer. For tax years beginning on January 1, 2010 and after, the credit is nonrefundable.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

13

13

14

__________________________________________________________________________

1.6.010

Credit for taxes paid to another state

Statute: Year Enacted: Year Effective: Data Source:

48-7-28 Information is not available at this time Information is not available at this time N/A

33

Estimate Reliability:

N/A

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.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by DOR. No

information is available at this time.

__________________________________________________________________________

1.6.011

Credit for taxes withheld and estimated tax payments

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-20 Information is not available at this time Information is not available at this time N/A N/A

Description: Employees are allowed a credit for taxes withheld by their employer on their behalf and for estimated tax payments made during the tax year.

Expenditure Estimate

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by DOR. No

information is available at this time.

34

2. Corporate Income Tax
The corporate income tax was first levied in Georgia in 1929. While originally levied at a rate of 1/3 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 current rate of 6 percent was adopted in 1969. The Georgia corporate income tax does not include a minimum level of exempt income and includes only one income tax bracket. All revenue collected from this tax is deposited into the state general fund.
Corporate tax collections for FY2008 were $943 million or 5.4 percent of total state tax revenues. Approximately 239,000 corporate returns were processed by the Department of Revenue in FY2008.
The starting point for the construction of the tax base is the 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, these deductions are not allowed at the state level. In addition, firms operating in multiple states 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 national receipts.
It is important to note that in the case of several of the business tax credits, the revenue estimate that may have been provided in a past fiscal note will differ from the value of the tax expenditure presented in this report. This is because the fiscal note may include offsetting revenue streams. First, the fiscal note includes the cost of the credit. Second, it may include a revenue increase associated with new income and sales tax revenues stemming from increased employment due to the presence of the credit. The value presented in the fiscal note is the net value. The tax expenditure only presents the cost of the credit, without any potential offsets. This is because the purpose of the tax expenditure is to convey the cost that would be necessary if the item were offered as a direct budgetary expenditure instead of a reduction in tax liability. Credits in which the tax expenditure is likely to differ from the fiscal note are denoted in the information below.
__________________________________________________________________________ 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 standard practice of corporate apportionment and result in a benefit to some taxpayers.
35

2.4.001

Single Factor Apportionment

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 3 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 the same 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. About 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 "throwout rule" which eliminates sales to non-nexus states from both the numerator and denominator of the apportionment formula of a corporation.

2.4.003

Corporate Receipts Sourcing

Georgia is among 12 states that apportion multistate corporate income based only on gross receipts, ie. a 100% 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 marketbased 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 they are performed. The rule is meant to apply a consistent destination-based treatment to services when compared to tangible goods.

Corporate Only

State Fiscal Years ($ in Millions)

2010

2011

2012

The estimated value of these expenditures

is not available at this time.

2.5 Corporate Income deductions

_______________________________________________________________________

2.5.001 and 2.5.002

Interest on obligations of the United States; Exception to intangible

expenses and related interest cost

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-21 1931 Information is not available at this time N/A N/A

36

Description: Corporations may deduct from taxable income interest and dividends on obligations of the United States. Furthermore, firms are allowed to deduct from income any exceptions relating to intangible expenses that are required to be added back to Federal taxable income.

Corporate Only

State Fiscal Years ($ in Millions)

2010

2011

2012

The estimated value of these expenditures

is not available at this time.

2.6 Corporate Income Tax Credits

_______________________________________________________________________

2.6.001

Employer's Job Tax Credit

Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

48-7-40 and 48-7-40.1 1/1/1990 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. Department of Revenue Class A

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.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

$9

$9

$9

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

__________________________________________________________________________

2.6.002

Quality Jobs Tax Credit

Statute: Year Enacted:

48-7-40.17 2000

37

Year Effective:
Data Source: Estimate Reliability:

Latest modifications are effective for taxable years beginning on or after January 1, 2009 Fiscal note for HB 439/2009 LC 18 8116ER Class B

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 is defined as a job located in the state; has 30 hours a week of regular work; a job that is not already located in Georgia; pays at or above 110 percent of the average wage of the county in which it is located; and has no predetermined end date.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

$21

$21

$21

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

2.6.003
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

New Facilities Jobs Credit
48-7-40.24 2003 Latest modifications are effective for taxable years beginning on or after January 1, 2009 N/A N/A

Description: For business enterprises that first qualified in a taxable year beginning before January 1, 2009, $450 million in qualified investment property must be purchased for the project within a six-year period. The manufacturer must also create at a minimum 1,800 new jobs within a six-year period and can receive credit for up to a maximum of 3,300 jobs.

For business enterprises who 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 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.

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by the

Corporate & Individual Department of Revenue. No information

on its value is available at this time.
*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

38

2.6.004
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

New Manufacturing Facilities Property Credit
48-7-40.25 2003 Taxable years beginning on or after January 1, 2003 N/A N/A

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. There is also the requirement that the number of full-time employees equal or exceed 1,800.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

This credit is not tracked by the Department of Revenue. No information

on its value is available at this time.

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

2.6.005

Manufacturer's Investment Tax Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-40.2, 48-7-40.3, and 48-7-40.4 1994 Taxable years beginning on or after January 1, 1994 Department of Revenue Class A

Description: Taxpayer must invest a minimum of $50,000 per project per location during the tax year to receive credit. Eligible taxpayers must have been in operation for the immediately preceding three years. Leased property for a period of 5 years or longer is eligible for the credit.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

$3

$3

$3

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

39

2.6.006
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Optional Investment Tax Credit
48-7-40.7, 48-7-40.8, and 48-7-40.9 1995 Taxable years beginning on or after January 1, 1996. Department of Revenue Class A

Description: An alternative investment tax credit available for investments in manufacturing or telecommunications facilities or support facilities that has 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)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes. (1)

Denotes a value of less than $1 million.

2.6.007
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Port Activity Tax Credit
48-7-40.15 1998 Latest modifications apply to taxable years beginning on or after January 1, 1998 Department of Revenue Class A

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% over their 1997 base year port traffic, or by more than 10% over 75 net tons, five containers or ten 20foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits.

40

For all taxable years beginning on or after January 1, 2010, base year port traffic is defined as the total amount of net tons, containers, or twenty-foot equivalent units (TEU's) of product actually imported into this state or exported out of this state by way of a waterborne ship or vehicle through a port facility during the second preceding 12 month period.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes. (1)

Denotes a value of less than $1 million.

2.6.008
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Alternative Port Activity Tax Credit
48-7-40.15A 2009 May 5, 2009 Department of Revenue Class A

Description: An additional jobs tax 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 8 retail stores in this state in the first year of operations.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes. (1)

Denotes a credit of less than $1 million.

41

2.6.009
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Film Tax Credit
48-7-40.26 2005 Taxable years beginning on or after January 1, 2005 Department of Revenue Class A

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 calculation provisions for production companies whose average annual total production expenditures in this state exceeded $30 million for 2002, 2003 and 2004.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

$57

$73

$89

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

2.6.010
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Research Tax Credit
48-7-40.12 1997 Taxable years beginning on or after January 1, 1998. Department of Revenue Class A

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.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$7

$7

$7

42

2.6.011
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Seed-Capital Fund
48-7-40.27 & 40.28 2008 Applicable to investments made on or after July 1, 2008 Fiscal note for HB 1196S/2008 LC 38 0573 Class B

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.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$3

$3

$3

2.6.012
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Qualified Health Insurance Expense Credit
48-7-29.13 1997 Latest modifications apply to taxable years beginning on or after January 1, 2009 Fiscal note HB 977/2008 LC 37 0690S Class B

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.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$12

$14

$16

43

______________________________________________________________________________

2.6.013

Teleworking Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-29.11 2006 July 1, 2007 Department of Revenue Class A

Description: Employers who permit their employees to telework will be allowed an income tax credit for expenses incurred up to $1,200 per participating employee. In addition, employers are allowed a one-time credit of $20,000 per employer for preparing an assessment of a teleworking plan for their business.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$0

2.6.014
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Qualified Transportation Credit
48-7-29.3 1999 Taxable years beginning on or after January 1, 2001. Department of Revenue Class A

Description: A tax credit provided to employers for the cost of providing any federally qualified transportation benefit to an employee.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

44

2.6.015
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Business Enterprise Vehicle Credit
48-7-40.22 2001 Taxable years beginning on or after January 1, 2002. Georgia Regional Transportation Authority Class C

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. In order 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)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

2.6.016
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Employer's Credit for providing or sponsoring child care for employees and employer's credit for purchasing child care property
48-7-40.6 1994 & 1999 Credit for cost of operation-Taxable years beginning on or after January 1, 1994; Credit for Cost of Qualified Child Care PropertyTaxable years beginning on or after January 1, 2000. Department of Revenue Class A

Description: Tax credit for expenses related to an employer who purchases qualified child care property; and a tax credit for employers who provide or sponsor child care for employees.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

45

2.6.017
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Low Income Housing Credit
48-7-29.6 2000 Taxable years beginning on or after January 1, 2001. Department of Revenue Class A

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. A eligible development consists of a housing project with restricted rents that do not exceed 30 percent of median income for at least 40 percent of its units occupied by persons or families having incomes of 60 percent or less of the median income or at least 20 percent of the units occupied by persons or families having incomes of 50 percent or less of the median income.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

2.6.018
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Historic Rehabilitation Credit
48-7-29.8 2002 Taxable years beginning on or after January 1, 2004. U.S. Congressional Joint Committee on Taxation Class B

Description: A credit for the certified rehabilitation of a certified structure or historic home. Standards set by the Department of Natural Resources must be met.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$15

$18

$18

46

2.6.019
Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

Diesel Particulate Emission Reduction Technology Equipment Credit
48-7-40.19 2000 Taxable years beginning on or after January 1, 2001. Officials from the Georgia Air Protection Branch of the Georgia Department of Natural Resources Class B

Description: This is a credit given to any person who installs diesel particulate emission reduction equipment at any truck stop, depot, or other facility. For purposes of this credit diesel particulate emission reduction technology equipment is any equipment that provides for heat, air conditioning, light, and communications for the driver's compartment of a commercial motor vehicle parked at a truck stop, depot, or other facility the use of which results in the engine being turned off with a corresponding reduction of particulate emissions from such vehicle's diesel engine.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

2.6.020

Zero and Low Emission Vehicle Credit; Electric Vehicle Charger Credit

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-7-40.16 1998 Taxable years beginning on or after January 1, 1998 Energy Information Administration, U.S. Department of Energy Class C

Description: This is a credit for the purchase or lease of a new low or zero emission vehicle that is registered in the state of Georgia. The credit also applies to the conversion of a standard vehicle to a low or zero emission vehicle. In addition, the credit applies to the purchase of an electric vehicle charger.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$3

$5

$12

47

2.6.021
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Land Conservation Credit
48-7-29.12 2006 Taxable years beginning on or after January 1, 2006 Department of Revenue Class A

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 Title 36. Property donated to increase building density levels or property that will be used or is associated with the playing of golf shall not be eligible.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$6

$6

$6

2.6.022
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Clean Energy Property and Wood Residuals Tax Credit
48-7-29.14 2008 July 1, 2008 Department of Revenue Class A

Description: The Georgia Clean Energy Property and Wood Residuals tax credit includes two general types of income tax credits: 1) investments in the construction, purchase or lease of "clean energy property," and 2) the value of "wood residuals" delivered to a qualified renewable biomass facility. The clean energy property tax credits apply to solar, wind and energy efficiency projects, geothermal heat pumps, and certain biomass equipment for making electricity. For the purposes of the wood residuals tax credit, wood residuals include urban wood waste, land clearing residues, and pellets, but not wood from a U.S. national forest.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$3

$3

$3

48

2.6.023
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Employer's Credit for Basic Skills Education
48-7-41 1991 1991 Department of Revenue Class A

Description: A tax credit is provided to employers that sponsor or provide, at no cost to their employees, an approved basic skills education program. A basic skills education is one that enhances reading, writing, or mathematical skills up to and including the twelfth grade. Employee means any employee resident in Georgia who is employed for at least 24 hours a week and who has been continuously employed by the employer for at least 16 consecutive weeks. Eligible expenses include instructor salaries, materials, supplies, and textbooks but exclude costs associated with renting or otherwise securing space.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

2.6.024
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Employer's Credit for Approved Employee Retraining
48-7-40.5 1994 Latest modifications are effective for taxable years beginning on or after January 1, 2009 Department of Revenue Class A

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.

49

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$5

$5

$5

2.6.025
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Qualified Education Expense Credit
48-7-29.16 2008 Taxable years beginning on or after January 1, 2008 Department of Revenue Class A

Description: This provides a tax credit for certain expenditures made by taxpayers to a student scholarship organization which are used for tuition and fees for a qualified school or program.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$37

$45

$50

2.6.026
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Investor's Credit
48-7-40.30 2010 January 1, 2011 Fiscal note for HB 1001/2010 LC 18 8790 Class C

Description: This credit provides a 35% tax credit for amounts invested in certain Georgia headquartered small businesses. The credit is available for investments made in 2011, 2012 and 2013.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$0

$0

$0

50

2.6.027
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Energy or Water Efficient Equipment Credit
48-7-40.29 2010 January 1 of the year following the year in which federal funds for this program are made available Fiscal note HB 1069/2010 LC 21 0586 Class A

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 equipment or $2,500. The credit is only available for those tax years in which federal funds are made available to the state for this purpose.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$0

$0

$0

2.6.028
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Tax Credit for water conservation facilities and qualified water conservation investment property
48-7-40.10 1996 Effective for tax years prior to 2000 N/A N/A

Description: This credit applies to any taxpayer who financially participates in qualified water conservation investments in Georgia. The credit rate depends on the value of the investment and ranges from 5 percent for investments of at least $1 million to 10 percent for investments between $50,000 and $500,000.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by the Department of Revenue. No information
on its value is available at this time.

51

2.6.029
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Tax credit for shift from ground-water usage
48-7-40.11 1996 Effective for tax years prior to 2000 N/A N/A

Description: This tax credit is available for any taxpayer who invests in facilities or equipment, the usage of which reduces ground water usage or utilizes a surface-water source. The value of the credit is equal to $0.0001 per gallon of the total gallons of relinquished and transferred annual ground-water permit issued after July 1, 1996.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

This credit is not tracked by the Department of Revenue. No information
on its value is available at this time.

2.6.030
Statute: Year Enacted: Year Effective:
Data Source: Estimate Reliability:

Tax credit for existing business enterprises undergoing qualified business expansion
48-7-40.21 Information is not available at this time Latest modifications are applicable to tax years beginning on or after January 1, 2008 Fiscal note for HB 1246/2008 LC 18 7154 Class B

Description: This credit applies to businesses that create at least 500 new full-time jobs within a taxable year.

State Fiscal Years ($ in Millions)

2010

2011

2012

Corporate & Individual

$2

$2

$3

*The value of the tax expenditure shown above may differ from revenue estimates provided in fiscal notes.

52

2.6.031
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Cigarette export tax credit
48-7-40.20 2000 Applies to tax years beginning January 1, 2000 Department of Revenue Class A

Description: This credit applies to businesses engaged in manufacturing cigarettes for export.

Corporate & Individual

State Fiscal Years ($ in Millions)

2010

2011

2012

$0

$0

$0

53

3. Corporate Net Worth Tax
Georgia imposes a tax on the net worth of corporations. 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. Revenues from this tax equaled $31 million in FY2009.

The tax is graduated based upon the taxable net worth of the corporation. The minimum liability is $10 for corporations having $10,000 or less in taxable net worth. The maximum liability is $5,000 for corporations with taxable net worth of more than $22 million.

______________________________________________________________________________

3.001 and 3.002

Exemptions from the Net Worth Tax

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-13-72 1932 Prior to 2000 N/A N/A

Description: Nonprofit corporations and insurance companies are not subject to this tax.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

The value of this expenditure is not

available at this time.

54

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. In FY2009 the sales and use tax generated $5.3 billion and accounted for approximately 34 percent of state tax revenues. All proceeds from the sales and use tax net of the vendor commission are deposited into the state general fund.
The base consists of retail sales, leases, rentals, use or consumption of tangible personal property. Some selected services are taxed. In addition to the state sales tax, local governments are authorized to impose a 1 to 3 percent sales tax with a few exceptions. The local sales taxes in most counties 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). In addition, Atlanta also levies a Municipal Option sales tax (MOST) and a few counties levy a Homestead Option sales tax (HOST).
In general, these local taxes operate from the same sales tax base as the state sales tax; the major exception being food for home consumption which is usually included in the local sales tax base, but not in the state base. The sales tax is remitted to the Department of Revenue by the retailer. The use tax is remitted by the consumer.
For purposes of this report, the tax base is defined to include mainly tangible personal property. For example, food for home consumption consists of tangible property that is not included in the sales tax base at the state level and is listed as a state sales tax exemption. On the other hand, many services are also excluded from the state and local tax base. We provide estimates of some services that are indirectly exempt from the sales tax.

4.0 Sales and Use Tax Exemptions

__________________________________________________________________________

4.00400

Sales of transportation furnished by a county or municipal public

transit system or public transit authority

Statute:

48-8-3(4)

Year Enacted:

Information is not available at this time

Year Effective:

Information is not available at this time

Data Source:

MARTA Annual Report for 2009

Estimate Reliability:

Class B

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.

55

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$5

$5

$5

$3

$4

$4

__________________________________________________________________________

4.00500

Sales of transportation furnished by an approved and authorized

urban transit system

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(5) Information is not available at this time Information is not available at this time see expenditure estimate for 4.00400 see expenditure estimate for 4.00400

Description: Sales of transportation furnished by an approved and authorized Urban Transit System

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

Combined with estimate for 4.00400

__________________________________________________________________________

4.00705

Sales of tangible personal property to a nonprofit health center

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(7.05) Information is not available at this time Information is not available at this time Fiscal Note for HB 1120/2010 LC 18 8833 Class C

Description: Sales of tangible personal property to a nonprofit health center established and receiving funds pursuant to the U.S. Public Health Service Act. The provision does not apply to the local level. This provision expired 6/10/2010.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

$0

$0

Local Tax Expenditure

(1)

$0

$0

(1) Denotes a value of less than $1 million

56

__________________________________________________________________________

4.00730

Sales of tangible personal property to a nonprofit volunteer health

clinic primarily treating patients with incomes below 200 percent

of the poverty level

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(7.3) Information is not available at this time Information is not available at this time Fiscal Note for HB 1241/2008 LC 18 7152 Class C

Description: Sales of tangible personal property to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level. This provision expired 6/10/2010.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

$0

$0

Local Tax Expenditure

(1)

$0

$0

(2) Denotes a value of less than $1 million

__________________________________________________________________________

4.00800

Sales of tangible personal property and services to the University

System of Georgia and its educational units.

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(8) Information is not available at this time Information is not available at this time University System of Georgia, Annual Financial Report for 2009 Class B

Description: Sales of tangible personal property and services to the University System of Georgia and its educational units.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$50

$52

$55

$38

$39

$41

57

__________________________________________________________________________

4.01200

School lunches sold and served to pupils and employees of public

schools.

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(12) Information is not available at this time Information is not available at this time Georgia School Nutrition Association Class B

Description: School lunches sold and served to pupils and employees of public schools.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$8

$9

$9

$6

$7

$7

__________________________________________________________________________

4.01300

School lunches sold and served to pupils and employees of

approved private elementary or secondary schools

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(13) Information is not available at this time Information is not available at this time Georgia School Nutrition Association Class B

Description: School lunches sold and served to pupils and employees of approved private elementary or secondary schools.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

$1

$2

$2

__________________________________________________________________________

4.01700

Sales of fuel or consumable supplies used by ships engaged in

inter-coastal or foreign commerce

Statute: Year Enacted: Year Effective:

48-8-3(17) Information is not available at this time Information is not available at this time

58

Data Source: Estimate Reliability:

U.S. Energy Information Administration, U.S. Department of Energy Class B

Description: Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

$1

$1

$1

__________________________________________________________________________

4.02000

The sale of water delivered to consumers through water main,

lines, or pipes

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(20) Information is not available at this time Information is not available at this time N/A N/A

Description: The sale of water delivered to consumers through water main, lines, or pipes.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

See expenditure estimate for Utility Service in section 4.5

__________________________________________________________________________

4.02500

Sale of seed, fertilizer, fungicide, and certain other agricultural

chemicals to farmers, and feed for livestock, fish, or poultry

purchased by persons engaged in animal husbandry

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(25) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sale of seed, fertilizer, fungicide, and certain other agricultural chemicals to farmers, and feed for livestock, fish, or poultry purchased by persons engaged in animal husbandry.

59

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$107

$112

$117

$80

$84

$88

__________________________________________________________________________

4.02600

Sale of machinery used exclusively for irrigation of crops to

persons primarily engaged in producing farm crops for sale

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(26) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sale of machinery used exclusively for irrigation of crops to persons primarily engaged in producing farm crops for sale.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

$1

$1

$1

__________________________________________________________________________

4.02800

Sale of cattle, hogs, sheep, horses, poultry, or bees when sold for

breeding purposes

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(28) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sale of cattle, hogs, sheep, horses, poultry, or bees when sold for breeding purposes.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

$1

$1

$1

60

__________________________________________________________________________

4.02900

Sale of certain types of agricultural machinery

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(29) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sale of certain types of agricultural machinery including machinery and equipment used on a farm in the production of the following: poultry and eggs; breeding of livestock; the production, processing, and storage of fluid milk; production of livestock; crops for feed for poultry and livestock, tilling soil or in animal husbandry on a new or existing farm.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$9

$10

$10

$7

$7

$8

__________________________________________________________________________

4.02910

Sale of certain off-road equipment

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(29.1) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sale of off-road equipment and related attachments used exclusively in site preparation, planting, cultivation, or harvesting of timber by persons primarily engaged in growing or harvesting timber.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

Estimate is included in estimate for 4.02900

61

_________________________________________________________________________

4.03310

Partial sales tax exemption for jet fuel sold to or used by a

qualifying airline at a qualifying airport

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(33.1); 48-9-3 Information is not available at this time Information is not available at this time see estimate for expenditure 6.00700 see estimate for expenditure 6.00700

Description: From July 1, 2009 through June 30, 2011, the first 1.8% of the 4% state sales tax and the 1% Special Purpose Local Option Sales Tax on the sale or use of jet fuel sold to, or used by a qualifying airline at a qualifying airport with 750,000 or more takeoffs and landings in a calendar year (Hartsfield-Jackson Airport).

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

See expenditure estimate for 6.00700

__________________________________________________________________________

4.03400

Certain machinery used in the manufacturing of tangible personal

property

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(34) Information is not available at this time Information is not available at this time U.S. Census Bureau State Data Class B

Description: Machinery and equipment used to handle, move, or store tangible personal property in a new or expanded distribution or warehouse facility where the total purchase or expansion is $5 million or more. To be eligible for this exemption, the distribution or warehouse facility may not have retail sales equal to or greater than 15 percent of the facility's total revenues.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$138

$145

$152

$104

$109

$114

62

__________________________________________________________________________

4.03420

Machinery and equipment used directly to remanufacture certain

aircraft engines or aircraft engine parts

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(34.2) Information is not available at this time Information is not available at this time U.S. Economic Census Class B

Description: The sale or use of machinery or equipment, or both, which is used in the remanufacture of aircraft engines or aircraft engine parts or components in a remanufacturing facility located in this state.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

(1)

Local Tax Expenditure

(1)

(1)

(1)

(1) 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: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(39) Information is not available at this time Information is not available at this time News articles from Georgia Trend and Dayton Daily News Class C

Description: Sales by a public or private school with grades kindergarten through 12 of tangible personal property, concessions, and tickets for admission to school functions when the net proceeds benefit the school or its students.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$2

$2

$2

$1

$1

$1

63

__________________________________________________________________________

4.04300

Revenues from coin-operated amusement machines for which

individual permits are required

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(43) Information is not available at this time Information is not available at this time U.S. Census Class B

Description: Revenues from coin-operated amusement machines for which individual permits are required as provided for under Chapter 17 of Title 48.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$1

$1

$1

$1

$1

$1

__________________________________________________________________________

4.04700

Sales of drugs dispensed by prescription, prescription glasses,

contact lenses, contact lens samples, and sales or use of controlled

substances or dangerous drugs

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(47) Information is not available at this time Information is not available at this time National Health Expenditures from the U.S. Census Class B

Description: Includes sale or use of drugs dispensable by prescription without charge to physicians or hospitals by pharmaceutical manufacturers or distributors, and the use of drugs, new animal drugs, and medical devices distributed without charge solely for the purposes of a clinical trial approved by the FDA or an institutional review board.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$318

$334

$351

$239

$250

$263

64

__________________________________________________________________________

4.04900

Sales of liquefied petroleum gas or other fuel used in a structure in

which broilers, pullets, or other poultry are raised

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(49) Information is not available at this time Information is not available at this time 2007 Census of Agriculture State Data Class B

Description: Sales of liquefied petroleum gas or other fuel used in a structure in which broilers, pullets, or other poultry are raised.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$3

$3

$3

$2

$2

$2

__________________________________________________________________________

4.04910

Sales of liquefied petroleum gas or other fuel used in a structure in

swine are raised

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(49.1) Information is not available at this time Information is not available at this time Fiscal Note 2010 LC 18 0189 Class B

Description: Sales of liquefied petroleum gas or other fuel used in a structure in which broilers, pullets, or other poultry are raised. This provision expired 6/30/2010.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

$0

$0

Local Tax Expenditure

(1)

$0

$0

(1) Denotes a value of less than $1 million

65

__________________________________________________________________________

4.05100

Sales of oxygen when prescribed by a licensed physician

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(51) Information is not available at this time Information is not available at this time U.S. Economic Census Class B

Description:
State Tax Expenditure Local Tax Expenditure

Sales of oxygen when prescribed by a licensed physician.

State Fiscal Years ($ in Millions)

2010

2011

2012

$7

$7

$8

$5

$5

$6

__________________________________________________________________________

4.05300

Transactions where food stamps or WIC coupons are used as the

method of payment

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(53) Information is not available at this time Information is not available at this time U.S. Food and Nutrition Service, U.S. Department of Agriculture Class B

Description: Sales transactions for which food stamps or WIC coupons are used as the medium of exchange.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$109

$109

$104

$82

$82

$78

__________________________________________________________________________

4.05400

Sale or use of any durable medical equipment or prosthetic device

prescribed by a physician

Statute: Year Enacted: Year Effective:

48-8-3(54) Information is not available at this time Information is not available at this time

66

Data Source: Estimate Reliability:

U.S. Census, National Health Expenditures Class B

Description: Sale or use of any durable medical equipment or prosthetic device prescribed by a physician.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$32

$33

$35

$24

$25

$26

__________________________________________________________________________

4.05500

Sale of Georgia lottery tickets

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(55) Information is not available at this time Information is not available at this time Bizjournals.com Class C

Description: The sale of lottery tickets authorized by Chapter 27 of Title 50 of the Georgia code.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$132

$138

$145

$99

$104

$109

__________________________________________________________________________

4.05700

Food purchased for off-premises consumption

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(57) 1996 October 1, 1998 Bureau of Labor Statistics Consumer Expenditure Survey Class B

Description: Exemption applies to food items consumed at home, including meat, poultry, bread, milk, candy, canned soft drinks. It does not apply to alcoholic beverages, tobacco, immediate consumption items, vitamins, minerals, and items sold from vending machines. This
67

exemption does not apply to the local option sales tax but does apply to special purpose and educational option sales taxes levied at the local level.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$440

$463

$494

Local Tax Expenditure

N/A

N/A

N/A

*This estimate excludes the value of food purchased with food stamps or WIC coupons.

__________________________________________________________________________

4.05710

Sales of food and beverages to a qualified food bank

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(57.1) Information is not available at this time July 1, 2006 Fiscal note for HB 359/2009 LC 14 9982 Class C

Description: Sales of food and beverages to a qualified food bank. This provision expired 6/30/2010.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

$0

$0

Local Tax Expenditure

(1)

$0

$0

(1) Denotes a value of less than $1 million.

__________________________________________________________________________

4.05720

Exemption for persons donating prepared food and beverages to a

qualified nonprofit agency to be used for hunger relief

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(57.2) Information is not available at this time Information is not available at this time see estimate for 4.05730 see estimate for 4.05730

Description: Exemption for persons donating prepared food and beverages to a qualified nonprofit agency to be used for hunger relief. This provision expired 6/30/2011.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

Estimate combined with 4.05730

68

__________________________________________________________________________

4.05730

Exemption for prepared food and beverages that are donated

following a natural disaster and used for disaster relief.

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(57.3) Information is not available at this time Information is not available at this time Fiscal Note for HB 358/2009 LC 14 9981 Class C

Description: Exemption for prepared food and beverages that are donated following a natural disaster and used for disaster relief. Provision expires on 6/30/2011.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

$0

Local Tax Expenditure

(1)

(1)

$0

(1) Denotes a value of less than $1 million

__________________________________________________________________________

4.05800

Certain sales to or use by a government contractor of overhead

materials in performance of a contract with the U.S. government.

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(58) Information is not available at this time Information is not available at this time Fiscal Note for HB 942/2010 LC 18 8689 Class C

Description: Sales to or use by a government contractor of overhead materials in performance of a contract with the U.S. government to which the title passes immediately to the government under the terms of the contract. Provision repealed effective 1/1/2011.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$15

(1)

$0

Local Tax Expenditure

$10

(1)

$0

(1) Denotes a value of less than $1 million.

69

_________________________________________________________________________

4.07000

Sales of natural gas used directly in the manufacture of electricity

Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

48-8-3(70) Information is not available at this time Information is not available at this time U.S. Energy Information Administration, U.S. Department of Energy Class B

Description: The sale of natural or artificial gas used directly in the production of electricity which is subsequently sold.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$28

$29

$31

$21

$22

$23

_________________________________________________________________________

4.07010

Partial exemption for certain sales of natural or artificial gas, fuel

oil, propane, petroleum coke and coal

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(70.1) Information is not available at this time Information is not available at this time Fiscal Note for HB 1008/2010 LC 33 3381 Class B

Description: Partial exemption for certain sales of natural or artificial gas, fuel oil, propane, petroleum coke and coal used directly or indirectly in the manufacture or processing of tangible personal property primarily for resale. Provision expires 12/31/2010.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$4

$2

$0

$0

$0

$0

70

__________________________________________________________________________

4.07800

Certain materials used to construct a new symphony hall

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(78) Information is not available at this time Information is not available at this time Fiscal Note for HB 395/2009 LC 28 4533 Class C

Description: Materials used to construct a new symphony hall costing in excess of $200 million that is owned and operated by a nonprofit organization. Provision expires 9/1/2011.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

(1)

Local Tax Expenditure

(1)

(1)

(1)

(1) Denotes a value of less than $1 million

__________________________________________________________________________

4.08600

Sales of engine parts, equipment and other tangible personal

property used in the maintenance or repair of certain aircraft

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(86) Information is not available at this time Information is not available at this time Fiscal Note for HB 116/2009 LC 18 7776 Class B

Description: Sales of engine parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft. Provision expires 6/30/2011.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$7

$7

$0

$5

$5

$0

71

__________________________________________________________________________

4.08700

Sales of tangible personal property used to renovate or expand a

zoological institution

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(87) Information is not available at this time Information is not available at this time Fiscal Note 2009 LC 18 8044S Class C

Description: Sales of tangible personal property used to renovate or expand a zoological institution. Provision expires 6/30/2011.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

$0

Local Tax Expenditure

(1)

(1)

$0

(1) Denotes a value of less than $1 million

__________________________________________________________________________

4.08800

Sales of tangible personal property used in the construction of a

qualified civil rights museum

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(88) Information is not available at this time Information is not available at this time Fiscal Note for 2009 LC 18 7942 Class C

Description: Sales of tangible personal property used in the construction of a qualified civil rights museum. Provision expires 7/30/2015.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$1

$1

(1)

Local Tax Expenditure

$1

$1

(1)

(1) Denotes a value of less than $1 million

72

__________________________________________________________________________

4.08900

Sale of airplane flight simulation training device

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-3(89) Information is not available at this time Information is not available at this time Fiscal Note for HB 364/2009 LC 14 9960 Class C

Description: Sale of airplane flight simulation training device. Provision expires 6/30/2011.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

$1

$0

Local Tax Expenditure

(1)

$1

$0

(1) Denotes a value of less than $1 million

Additional Sales Tax exemptions

4.00100 4.00200
4.00300 4.00600 4.00610 4.00620
4.00630 4.00700
4.00710 4.00720 4.00900
4.01000 4.01100

Sales to Federal Government, State of Georgia or an county or municipality in Georgia or any agency of such governments 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. Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel Sales to any Hospital Authority created by Georgia Law Sales to any Housing Authority created by Georgia Law 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 Sales to any agricultural commission created by the Department of Agriculture Sales of tangible personal property and services used specifically in the treatment function by an approved nursing home, inpatient hospice, general hospital or mental hospital when qualifying as a nonprofit by the IRS. Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities. Sales to Georgia Society of the Daughters of the American Revolution 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 of Georgia System. Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Sales of tangible personal property and services to any nonprofit cultural institute that is an instrument of a foreign government operating in Georgia

73

4.01400 4.01500 4.01510 4.01800 4.01900 4.02100
4.02400 4.02700 4.03000 4.03100 4.03200 4.03300 4.03410 4.03430 4.03440
4.03500 4.03600 4.03610 4.03700 4.03800 4.03910 4.04000 4.04100 4.04200
4.04400 4.04500

Sales of art and other artifacts for display or exhibition to museums Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year. Sales of pipe organs or steeple bells to any church qualifying as a nonprofit 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 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 Rental of videotape or film to persons charging admission to view the tape or film Sales of sugar for use as food to honey bee producers Vehicles purchased by service-connected disabled veterans when the US Dept. of Veterans Affairs supplies a grant to purchase the specially adapted 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 Common or Common and Contract Carriers Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities The sale or use of repair or replacement parts, machinery clothing, molds, dies, waxes or tooling for machinery Sales of tangible personal property to or used in or for the construction of a new alternative fuel facility primarily dedicated to the production and processing of ethanol, biodiesel, butanol or their by-products (expires 6/30/2012) Certain materials used in industrial packaging 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. Machinery and equipment used in combating air and water pollution and any industrial material used in a burning or recycling process Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H Center Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property 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 institute, child-placing agency, or maternity home 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 (i.e. casual sales) Sales of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state The sale or use of paper stock when used to print catalogs for distribution outside Georgia
74

4.04600 4.04800 4.05000
4.05200 4.05600 4.05900
4.06000
4.06100 4.06200
4.06300
4.06400
4.06500
4.06600 4.06700 4.06800
4.06900
4.07100
4.07200
4.07300
4.07700
4.07900 4.08100
4.08300

Sales of tangible personal property or taxable services to nonprofit Blood Banks Sales of crab bait to licensed commercial fisherman Sales of blood measuring devices, monitoring equipment, or insulin delivery systems used exclusively by diabetics; insulin, insulin syringes and blood glucose monitoring strips Sales or use of hearing aids Sales by an qualified nonprofit parent teacher organization Sales of eligible food and beverages for on or off-premises consumption by any Girl or Boy Scout council Sales of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less 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 Funeral merchandise when paid with funds from the Georgia Crime Victims Emergency Fund Sales of electricity or fuels used exclusively for the operation of an irrigation system on a farm for crop irrigation Sales of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fisherman Sales of gold, silver, or platinum bullion Sales of coins or currency Sales of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Sales to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries Sales of wheelchairs and attachments for wheelchairs when sold to permanently disabled individuals Sales of certain production equipment to film producers and film production companies Liquefied gases and other fuels used in structures where plants, floral products, seedlings, and nursery stock are grown for sale Ice used to chill poultry or vegetables during processing or shipment 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 or used to produce electricity and steam intended for sale

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

No expenditure estimate is available for these items at this time.

75

4.3 Casual Sales

__________________________________________________________________________

4.30000

Sales tax exemption for casual sales

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

exempt via an Department of Revenue administrative rule Information not available at this time Information not available at this time Georgia Department of Revenue Class B

Description: Purchases of motor vehicles, boats, planes and other tangible goods sold by persons not in the business of selling such items are not subject to sales tax.

State Tax Expenditure Local Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$122

$131

$149

$85

$91

$104

4.5 Exemption for certain services
In general the Georgia sales tax is levied on tangible purchases only. Listed below are selected services consumed by individuals and businesses. Under current law, these services are not subject to the sales tax. The value of these expenditures was estimated using data from the 2007 U.S. Economic Census for Georgia and the 2009 Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics.
__________________________________________________________________________

Admission and Amusements

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$107

$112

$118

Local Tax Expenditure

$80

$84

$88

Admissions and Amusements include:

Admission to school and college sports events; rental of films and tapes by theaters; cable

tv and direct satellite tv; coin operated video games (includes pinball and other

mechanical amusements); membership fees in private clubs

76

Agricultural Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$111

$117

$123

Local Tax Expenditure

$84

$88

$92

Agricultural services include:

Veterinary services (both large and small animal); landscaping services (including lawn

care); pet grooming

Automotive Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$87

$92

$96

Local Tax Expenditure

$66

$69

$72

Automotive services include:

Automotive road service and towing services; automotive painting and lube; parking lots

and garages; automotive washing and waxing; automotive rustproofing and undercoating;

labor charges on repairs to motor vehicles

Business Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$516

$541

$569

Local Tax Expenditure

$387

$406

$426

Business services include:

Billboards; test laboratories (excluding medical); interior design and decorating;

commercial art and graphic design; advertising agency fees (not ad placement) sign

construction and installation; employment agencies; temporary help agencies; check and

debt collection; credit information and credit bureaus; exterminating (includes termite

services); maintenance and janitorial services; window cleaning; bail bond fees;

telephone answering service; telemarketing services on contract; secretarial and court

reporting services; security services (includes private investigation (detective) services;

armored car services

77

Computer and Online Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$213

$224

$235

Local Tax Expenditure

$160

Computer and online services include:

$168

$176

Online data processing services; downloaded software, books, music, movies and video

content, other electronic goods; internet service providers dial-up; internet service

providers DSL or other broadband; mainframe computer access and processing service;

information services; software custom programs and professional services

Construction Labor

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$916

$961

$1,009

Local Tax Expenditure Construction labor includes:

$687

$721

$757

Labor for the construction of buildings; heavy and civil engineering construction labor;

labor of specialty trade contractors

Fabrication, Installation, and Repair Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$175

$184

$193

Local Tax Expenditure

$132

$138

$145

Fabrication, Installation, and Repair Services include:

Labor charges for repairs for other tangible property; labor charges on tv/radio repairs

and other electronic equipment; repair charges generally; labor charges on repair of

aircraft; labor charges on repairs to interstate vessels; labor charges on repairs to

intrastate vessels; labor charges on repairs to railroad rolling stock; labor charges for

repairs or remodeling of real property; service contracts sold at the time of sale of

tangible personal property; installation charges by persons selling property; installation

charges by persons other than the seller of the property

78

Finance, Insurance, and Real Estate

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$374

$392

$412

Local Tax Expenditure

$280

$294

$309

Finance, Insurance, and Real Estate include:

Service charges of banking institutions includes loan broker fees; insurance services;

property sales agents (real estate or personal); real estate management fees (rental

agents); investment counseling; real estate title abstract services

Industrial and Mining Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$7

$8

$8

Local Tax Expenditure

$5

$6

$6

Industrial and Mining Services include:

Seismograph and geophysical services; metal and nonmetal and coal mining services;

typesetting services; platemaking for the print trade

Leases and Rentals

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$2

$2

$3

Local Tax Expenditure

$2

$2

$2

Leases include:

Overnight trailer parks

Personal Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$161

$169

$177

Local Tax Expenditure Personal services include:

$121

$127

$133

Carpet and upholstery cleaning; swimming pool cleaning and maintenance; water

softening and conditioning; shoe repair; garment services (altering and repairing); health

clubs, tanning parlors, and reducing salons; laundry and dry cleaning services coin

operated; laundry and dry cleaning services not coin operated; massage services

79

(includes dating services); tax return preparation; sports and recreation instruction; barber shops; beauty parlors; travel agent services

Professional Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$1,283 $1,346

$1,413

Local Tax Expenditure

$962

Professional services include:

$1,009

$1,060

Attorneys; accounting and bookkeeping; physicians; dentists; medical test laboratories;

architects; engineers; land surveying; nursing services out of the hospital

Storage

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$49

$51

$54

Local Tax Expenditure

$37

$38

$40

Storage services include:

Marine towing services (includes tugboats); household goods storage; cold storage

(includes fur storage); food storage; mini-storage; marina service (docking, storage,

cleaning, repair); packing and crating (include bus services); other warehousing and

storage (including automotive storage)

Transportation Services

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

(1)

Local Tax Expenditure

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

Transportation services include:

Intrastate courier service

80

Utility Service

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

$69

$72

$76

Local Tax Expenditure

$52

$54

$57

Utility service includes:

Interstate telephone and telegraph; water; sewer and refuse

4.7 Vendor Compensation

__________________________________________________________________________

4.70000

Compensation of dealers for reporting and paying tax

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-8-50 Information not available at this time Information not available at this time Georgia Department of Revenue Statistical Report for 2009 Class B

Description: 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.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$45

$47

$49

81

5. Insurance Premium Tax
The premium tax is levied on premiums of persons, property or risks in Georgia written by insurance companies conducting business in Georgia. The state tax rate is imposed at a rate of 2.25 percent of gross direct premiums. In 2009, revenues from this tax equaled $314 million. This tax is administered by the state Insurance Commissioner. The proceeds of the tax are deposited into the state general fund.

______________________________________________________________________________

5.001

Deduction for retaliatory taxes paid to other states

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-7 1960 Prior to 2000 Fiscal Research Center Brief #214 Class B

Description: Property and casualty insurance companies domiciled in Georgia are able to deduct taxes paid to other states on policies written in those states from their Georgia tax liability.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$3

$4

$4

______________________________________________________________________________

5.002

Insurance premium tax credits

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-4.1 1960 Prior to 2000 Fiscal Research Center Brief #214 Class B

Description: Insurance companies are allowed a credit against the premium tax. These credits include the Jobs tax credit, the Low-Income Housing credit, and the Clean Energy credit. For a description of these credits, see section 2.6 on corporate tax credits of this report.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$51

$61

$63

82

______________________________________________________________________________

5.003

Exemption for premiums of high deductible health plans

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-4 2008 2009 Fiscal Note for HB 977/2008 LC 37 0690S Class C

Description: Insurance companies are allowed to exempt from income tax any premiums paid by Georgia residents for high deductible health plans as defined by Section 233 of the Internal Revenue Code.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$12

$14

$17

______________________________________________________________________________

5.004

Exemption for companies that only insure places of

worship

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-13 1996 Prior to 2000 N/A N/A

Description: Insurance companies that only insure the risks of places of worship are exempt from the state premium tax.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

No estimate is available at this time.

______________________________________________________________________________

5.005

Insurance abatements

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-5 1996 Prior to 2000 Fiscal Research Center Brief #214 Class B

83

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 was greater than 75 percent, the rate is reduced to 0.75 percent.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$131

$158

$163

______________________________________________________________________________

5.006

Special deductions for Life Insurance companies

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

33-8-4, 33-8-8, 33-8-8.1 1981 Prior to 2000 Fiscal Research Center Brief #214 Class B

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 Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$96

$116

$119

84

6. Motor Fuel Tax

The tax on motor fuels consists of two taxes. The first tax is levied at a rate of 7 cents per gallon of motor fuel. The second tax is a 3 percent tax on the retail sales price of motor fuel. This tax is commonly referred to as the "second motor fuel tax." Revenues generated by the first and second motor fuel tax are allocated to the Department of Transportation. Revenues from a one percent sales tax on the retail price of motor fuel are deposited into the state general fund.

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 Department of Revenue. In FY2009 proceeds from the first motor fuel tax equaled $461 million and proceeds from the second motor fuel tax equaled $432 million.

______________________________________________________________________________

6.00200 & 6.00300

Exemption for sales to mass transit and campus

transportation vehicles

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-9-3 1978 Latest modification 2010 Energy Information Administration, U.S. Dept. of Energy Class B

Description: Fuel sold for use in vehicles operated by a public campus transportation system or fuel sold for use in public mass transit vehicles is exempt from tax. This provision expires on June 30, 2012.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$7

$9

$11

______________________________________________________________________________

6.00700

Partial exemption for sales of aviation gasoline to a

licensed aviation gasoline dealer

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-9-3 Information not available at this time Information not available at this time 2009 Annual Report of Hartsfield-Jackson Airport Class B

85

Description: From July 1, 2009 through June 30, 2011, the first 1.8% of the 4% state sales tax and the 1% Special Purpose Local Option Sales Tax on the sale or use of jet fuel sold to, or used by a qualifying airline at a qualifying airport with 750,000 or more takeoffs and landings in a calendar year (Hartsfield-Jackson Airport).

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$24

$23

$22

______________________________________________________________________________

6.01000

Sales of dyed fuel oils to a consumer other than for

highway use

Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

48-9-3 Information is not available at this time Information is not available at this time Census of Agriculture, Energy Information Administration of the US Department of Energy Class B

Description: Sales of dyed fuel oils to a consumer for other than highway use is exempt from tax.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$13

$13

$12

______________________________________________________________________________ Additional exemptions from the Motor Fuel tax include:

6.00100 6.00400 6.00500 6.00600 6.00800
6.00900 6.01100

Bulk sales to another licensed dealer Sales of fuels not sold by the gallon Sales to a licensed dealer for export from Georgia Sales to the United States government Bulk sales of compressed petroleum gas or special fuel to a duly licensed consumer distributor Sales of fuel oils and other fuels sold to consumers for heating purposes only Fuel oils, compressed petroleum gas or special fuel used by a licenses distributor for non highway purposes

86

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

The value of these expenditures is not

available at this time.

87

7. Alcoholic Beverage Tax
This tax is imposed on alcoholic beverages including malt beverages, wine, and distilled spirits. Malt beverages are taxed at a rate of $10 per container up to 31 gallons with a proportionate tax on fractional parts of 31 gallons for draft malt beverages. The tax rate is 4 cents per 12 ounces for bottles and cans with proportionate rates on fractional parts of other sizes. Wine is taxed at a rate of 11 cents per liter and an import tax of 29 cents per liter is imposed on table wines with proportional rates for fractional parts of a liter. An excise tax of 27 cents per liter with an import tax of 40 cents per liter is imposed on dessert wines with proportional rates for fractional parts of a liter. An excise tax of 50 cents per liter and an import tax of 70 cents per liter are levied on distilled spirits.
The tax is administered by the state Revenue Commissioner. All taxes on alcoholic beverages totaled $169.7 million in 2009.

7.001-7.006
Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

Exemptions from the alcohol beverage tax
3-5-61, 3-6-70 1977 1977 N/A N/A

Description: Exemptions from the alcohol beverage tax include: (i) Sales to persons outside the state for resale or consumption outside the state, (ii) Sales to stores or canteens in U.S. military reservations, (iii) Up to 200 gallons annually of home-brew per household, (iv) Sales to and use by religious organizations for sacramental purposes, (v) Exemption for ethyl alcohol used for certain purposes, (vi) Malt beverages containing less than of one percent of alcohol by volume.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

Estimated values are not available at this time.

88

8. Cigar and Cigarette Excise Tax
The tax is levied upon the sale, receipt, purchase, possession, consumption, handling, distribution, or use of cigars and cigarettes in Georgia.

The tax is imposed at a rate of 37 cents per pack of 20 cigarettes and pro rata for other sized packages. Little cigars, weighing not more than 3 pounds per thousand are taxed at a rate of two 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.

The tax is collected by the state Revenue Commissioner. In FY2009 the tax brought in $230.3 million.

______________________________________________________________________________

8.001

Exemption for purchases for use exclusively by patients at

the Georgia War Veterans Home and the Georgia War

Veterans Nursing Home

Statute: Year Enacted: Year Effective: Data Source:
Estimate Reliability:

48-11-2 1955 Latest modifications - 2003 Georgia Department of Veterans Service, 2009 Annual Report Class C

Description: Purchases made by patients of the Georgia War Veterans Home and the Georgia War Veterans Nursing Home are exempt from tax.

State Fiscal Years ($ in Millions)

2010

2011

2012

State Tax Expenditure

(1)

(1)

(1)

(1) Denotes a value of less than $1 million.

_____________________________________________________________________________

8.002 8.004

Other exemptions from the tobacco tax

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-11-3 1955 Latest modifications - 2003 N/A N/A

89

Description: Other exemptions from the tobacco tax include: (i) Di minimus amount brought into the state by one person. (ii) Cigars and cigarettes stored in a public warehouse, and (iii) Certain cigars and cigarettes held by licensed dealers

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

Estimated value not available at this time.

90

9. Financial Institutions Business License Tax

This tax is imposed on the adjusted gross receipts of the institution. 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 of gross receipts. A minimum tax of $1,000 is authorized.

The tax is administered by the state Revenue Commissioner. The revenues from this tax in FY2009 equaled $16.7 million.

______________________________________________________________________________

9.001

Deduction for interest paid

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-6-95 1975 Prior to 2000 FDIC Statistics on Depository Institutions Class B

Description: Financial institutions are allowed to deduct from gross receipts interest paid on all liabilities.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$7

$7

$8

______________________________________________________________________________

9.002 & 9.003

Other Financial Institution tax deductions

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-6-95 1975 Prior to 2000 N/A N/A

Description: Financial institutions are also allowed to deduct income from authorized activities of a domestic international banking facility and to deduct income from banking business with persons or entities outside the U.S.

State Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

No information is available on the value

of these expenditures

91

10. Special Assessment of Forest Land Conservation Use Property

Statute: Year Enacted: Year Effective: Data Source: Estimate Reliability:

48-5A-2 2008 2008 Georgia Department of Revenue Class B

Description: Grants made available by the 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 Tax Expenditure

State Fiscal Years ($ in Millions)

2010

2011

2012

$0

$11

$11

92