Georgia Tax Expenditure Report for FY 2017 Prepared by the Fiscal Research Center of the Andrew Young School of Policy Studies at Georgia State University December 2015 Funding for this project was provided by the Georgia Department of Audits and Accounts. We would like to thank the Georgia Department of Revenue and the Georgia Office of Insurance and Safety Fire Commissioner for their contributions to the preparation of this report. Lastly, we would like to thank the Georgia Department of Audits and Accounts for their comments and recommendations. All estimates presented in this report are the work of the Fiscal Research Center. We are solely responsible for its contents. 1|Page Table of Contents Introduction..................................................................................................................................... 3 Summary of State Tax Expenditures ............................................................................................ 10 1. Personal Income Tax............................................................................................................... 43 1.1 Federal Exclusions .............................................................................................................. 45 1.2 Federal Deductions.............................................................................................................. 53 1.3 Special Federal Conformity Provisions............................................................................... 59 1.4 Georgia Exemptions ............................................................................................................ 61 1.5 Georgia Deductions............................................................................................................. 64 1.6 Georgia Credits ................................................................................................................... 65 2. Corporate Income Tax ............................................................................................................ 83 2.1 Federal Corporate Exclusions ............................................................................................. 84 2.2 Federal Corporate Deductions............................................................................................. 86 2.3 Special Federal Corporate Conformity Provisions.............................................................. 90 2.4 Corporate Apportionment ................................................................................................... 92 2.5 Georgia Deductions............................................................................................................. 94 2.6 Georgia Credits ................................................................................................................... 95 3. Corporate Net Worth Tax ..................................................................................................... 110 4. Sales and Use Tax ................................................................................................................. 111 4.5 Sales and Use Tax for Services ......................................................................................... 137 4.7 Vendor Compensation....................................................................................................... 140 4.9 Casual Sales....................................................................................................................... 141 5. Insurance Premium Tax .......................................................................................................... 144 6. Motor Fuel Tax ..................................................................................................................... 147 7. Alcoholic Beverage Tax ....................................................................................................... 149 8. Cigar and Cigarette Excise Tax ............................................................................................ 151 9. Financial Institutions Special State Occupation Tax ............................................................ 152 10. Special Assessment of Forest Land Conservation Use Property ........................................ 153 11. Alternative Ad Valorem Tax on Motor Vehicles ............................................................... 154 12. Special Excise Tax on Consumer Fireworks ...................................................................... 159 Appendix of Tables..................................................................................................................... 160 Table 1: Summary of expired provisions ................................................................................ 160 Table 2: Sales and use tax expenditures by type ..................................................................... 163 Tables 3-8: Distributional tables of selected provisions ......................................................... 171 2|Page Introduction Tax expenditures are provisions in the tax code that allow for special treatment of a source of income or a certain type of expense. Such treatment usually results in a reduction in tax liability for the taxpayer. In principle, these tax benefits could be provided by direct appropriation, thus these provisions are referred to as "expenditures". They represent tax revenues that would have been otherwise generated if not for this preferential treatment in the tax code. Like direct government expenditures, tax expenditures are allocations of government revenue that are intended to achieve a particular policy outcome or encourage some activity. The value of a tax expenditure can be thought of as representing the amount of money that would be necessary to provide the same level of financial support in the form of a government grant instead of through the tax code. Tax expenditures are received by businesses and individual taxpayers and are present in all of Georgia's major taxes, including the individual income tax, corporate income tax, and sales tax. Tax expenditures, also referred to as tax preference items, can take several forms. Many are structured as tax credits and deductions, such as the corporate credit for hiring a new worker or the individual deduction for the mortgage interest paid on a primary residence. Other expenditures are in the form of exclusions of income. For example, at the state-level, individuals in Georgia are allowed to exclude the value of Social Security benefits from the calculation of Georgia taxable income. Lastly, some tax expenditures may be provided in the form of reduced rates for selected items in the tax base, such as 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, these items can be tracked over time in a fashion analogous to a budget of direct governmental expenditures. While direct expenditures for such items as education or transportation are reviewed annually with every budget, 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 their presence results in special treatment for some taxpayers relative to others. For example, the state government supports education through direct expenditure programs and through HOPE scholarships but also allows a tax deduction for certain educational expenses borne by the taxpayer or paid by an employer. Both the direct expenditure and the tax expenditure represent an allocation of government resources toward education, but only the direct expenditures are listed in an annual budget. 3|Page Leaving tax expenditures out of the annual budgetary review process creates two types of distortions. First, it under-represents the amount of government resources allocated for a given purpose. Second, it incorrectly represents the distribution of the benefits of government expenditures. The benefits of tax expenditure provisions are usually targeted to higher income taxpayers compared to direct expenditure programs, so that the absence of tax expenditures in the overall analysis may lead to the conclusion that government resources are targeted toward less affluent taxpayers. In addition, not all tax expenditure programs have a direct budgetary counterpart, thus without a tax expenditure report, these provisions and their distributional effects escape notice. The presence of tax expenditures are not necessarily bad tax policy. However, not recognizing or monitoring the resources allocated through the tax system is not good fiscal policy. Through this report, we hope to provide a consolidated listing of government resources provided through this means. This report does not, however, provide any information on how effective the provision may be in terms of fulfilling its purpose. For instance, while the value of the Research and Development (R&D) credit may be reported annually in the tax expenditure report, there is no accompanying analysis to determine the extent to which more research activities have been undertaken due to the presence of the special provision. Identifying Tax Expenditures In most cases, identifying a tax expenditure is straightforward. Tax expenditures are deviations or special exceptions from the generally defined tax base, sometimes referred to as the normal tax base or the reference tax base. However, there may be disagreement as to what constitutes the normal or reference tax base. Even at the federal level, the list of tax expenditure items included by the Administration differs from the list estimated by Congress because each works from a different definition of the standard tax base. The appropriate norm against which tax expenditures are defined is somewhat subjective and may, in some cases, be driven by the intent of the policy underlying the legislation. For example, one would not consider the difference between the current top income tax rate of 6 percent and the tax rate of 1 percent a tax expenditure. Tax credits and deductions for certain types of activities, such as the jobs tax credit or the lowincome housing credit, are always classified as tax expenditures. This is also the case for items that are taxed at a reduced rate. In addition, specific exclusions from the tax base are, in most cases, considered tax expenditures. Because the Georgia individual and corporate tax systems are both tied to the federal individual and corporate bases, exclusions or deductions at the federal level apply to the state tax base as well. In some cases, Georgia chooses not to conform to federal provisions, such as the Section 199 deduction for domestic production activities. In these 4|Page cases, we do not include the provision as a tax expenditure. It is also important to note that tax expenditures are not computed for revenue that is due but not collected. There are instances when it is unclear whether a given tax provision should be listed as a tax expenditure. This is because it is unclear what constitutes the general rule, and therefore, it is sometimes difficult to determine which provisions are exceptions to that rule. Consider the personal income tax exemption. Individuals are allowed to exclude an amount of income for each taxpayer included on the return but this exemption of income is not considered a tax expenditure by all states. Another example is the provision allowing for the use of a singlefactor apportionment formula in allocating income earned by corporations operating in more than one state. Because the general rule of the single-factor apportionment formula has been established at the state level, only deviations from that rule would be listed as a tax expenditure. Alternatively, if one considers the status-quo method of apportionment to be the equally weighted three-factor apportionment formula, any deviation from that rule, such as the doubleweighted three-factor or single-factor apportionment formula, would be reported as a tax expenditure. This sort of problematic classification of tax expenditures also applies to the taxation of services under the state sales tax. Because state legislation refers to the purchase of tangible goods, the exclusion of services from the base may not be seen as a deviation from the general rule. On the other hand, if it is really the intent of the general rule to tax all consumption, then the exclusions provided to the consumption of services should be listed as a tax expenditure. In this report we attempt to incorporate as comprehensive a definition as possible. Defining a tax expenditure in the case of the sales tax requires particular discussion. Because there is no federal sales tax, there is no list of federal sales tax expenditures to use as a starting point. For this report, we use the state tax statute as the basis for identifying sales tax expenditures. Therefore, if an exemption specifically exists in the state statute, it is listed as a sales tax expenditure. This has the advantage of being a very straightforward and non-subjective rule to apply. As a second advantage, this method provides a comprehensive list of all statutory exemptions allowing for comparison between provisions affecting taxpayers and industries. This rule has the disadvantage of identifying many sales tax provisions as tax expenditures that would not be identified as tax expenditures under the rule of good tax policy. This is particularly true in the case of business inputs. There are several business inputs, such as the exemption for energy used in manufacturing, that are listed in this report as tax expenditures but are not activities that should be included in the tax base, if the base were defined using the best economic principles. When business inputs are included in the sales tax base, those inputs are taxed and the tax is included in the price when the input is sold to the next stage of production. The more these inputs are taxed at the intermediate stages of production, the more the tax is imbedded in the price of the item. This embedded tax distorts prices and influences economic decisions. Therefore, it is important to understand that while some business exemptions are listed as tax expenditures in this report, policymakers may find it helpful to distinguish the 5|Page business inputs from tax expenditures that are provided for more societal reasons, such as the tax exemption for public school lunches or for the sale of food for off-premises consumption. To aid policy makers, this report identifies sales tax expenditure provisions that are considered business inputs. Tax Expenditures vs. Revenue Estimates The estimate associated with a tax expenditure provision does not necessarily represent the revenue that would be gained from the repeal of the enabling legislation. Instead, the cost of the tax expenditure represents the value of the deduction or credit taken via the provision. Although the presence of one provision may interact with the use of another provision, tax expenditures are estimated as independent provisions. For instance, if the federal research and development tax credit were repealed, federal revenues would not increase by the amount of the federal tax expenditure estimate but by a smaller amount. This is because some of the research expenditures claimed through the federal tax credit would be shifted over to another tax deduction or credit so that the savings to the government would be less than the value of the tax expenditure estimate. In addition, tax expenditure estimates do not incorporate behavioral effects that may occur due to the elimination of a provision. For instance, the tax expenditure estimate associated with the deduction for charitable giving is based on a current level of charitable contributions. If the deduction for charitable contributions were eliminated, the revenue effect presented in the fiscal note would incorporate both the initial value of charitable contributions from the tax expenditure estimate and a timing effect that would result from people speeding up their level of contributions in response to the future loss of the deduction. Thus, tax expenditure estimates can only act as an indication of the revenue effect that would occur if the provision were eliminated or modified. Data Sources and Reliability of Estimates To the extent possible, data from the Georgia Department of Revenue (DOR) is used to estimate the expenditures included in this report. Unfortunately, the required information is not always collected or available. When it is not, other data sources, such as information from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, or the U.S. Bureau of Labor Statistics, are used. Every effort is made to provide reliable, well supported estimates of the provisions. Because of the time lag in processing income tax returns, the most recent data available from the Georgia DOR was calendar year (CY) 2013. Therefore, even in cases in which the Georgia DOR data is used as the primary data source, the tax expenditures presented in this report are estimates. Two subjective measures of reliability are provided in this report: the estimate reliability and the data reliability. The reliability of both the estimate and data are categorized into three classes: A, 6|Page B, and C. Class A estimates and data sources are considered the most reliable. Data sources with a Class A status consist of data from the federal statistical agencies or from the Georgia DOR. Estimates with a Class A status are typically those estimates that are based on Class A data that is particularly applicable to the expenditure provision. For instance, most of the state business tax credit expenditures are listed as Class A estimates. They are based on tax credit data provided by the Georgia DOR that specifically addresses or measures the tax expenditure provision. On the other hand, most sales tax estimates are given a Class B status. While these provisions may be based on Class A data sources, such as the Economic Census or the Consumer Expenditure Survey from the Bureau of Labor Statistics, the data may only be available at a national level, or the data may refer to more activities than is covered by the tax expenditure provision. In these cases, the data must be adjusted to represent the specific activity associated with the expenditure provision and scaled down to represent the value of the activity within Georgia. Class C estimates are believed to provide reasonable estimates and are based on the best data available. For some items, no reliable information is available. In these cases, no estimate for the expenditure is provided. Class of Estimate/Class of Data Class A Class B Class C Description of Estimate Reliability Based on data specifically related to the tax expenditure provision and to Georgia taxpayers Based on national data which has been modified to represent Georgia and the specific tax activity covered by the expenditure Represents best available estimate at this time Examples of Data Sources by Reliability Status Data from Department of Revenue, Bureau of Labor Statistics Consumer Expenditure Survey, Bureau of Economic Analysis, U.S. Census Bureau datasets Industry surveys and trade magazines, most proprietary information Newspaper articles, secondary sources Local Government Effects In addition to the state estimates, this report attempts, where possible, to estimate the effects on local government revenues. There are many state exemptions that have local ramifications, such as numerous exemptions from the sales tax base. The local estimates that are provided represent the aggregate value of the exemptions that would accrue to the counties, municipalities, school districts, and special service districts, including tax allocation and community improvement districts. 7|Page Consistency with prior estimates The current report, FY 2017, presents estimates for FY 2015-FY 2017. The report for FY 2016 provided estimates for FY 2014-FY 2016. In most cases the estimates between the current and past reports are consistent, with the latest report continuing the same trend in the value of the estimates that was established in earlier reports. On the other hand, there are some cases in which the estimate presented in the FY 2017 report differs significantly from that presented in the past reports. This usually occurs because new information has become available or because a new forecast of economic activity is relied upon to predict future values. The updated estimates are included in the current report and any major inconsistency with prior reports is noted in the discussion relating to the expenditure. Outline of the Report The report continues with a summary table containing a title of each tax expenditure provision, the tax base it is associated with, the type of expenditure and the estimated value for FY 2015, FY 2016, and FY 2017 for all tax expenditures identified in the report. Provisions that are assigned a positive value denote an expenditure that is estimated to reduce state or local revenues. Provisions assigned a value of "(m)" denote a tax expenditure that is estimated to reduce state revenues by less than $1 million. Provisions assigned a negative value denote a positive tax expenditure that is estimated to increase state revenues. Provisions assigned a value of "(-m)" denote a tax expenditure that is estimated to increase state revenues by less than $1 million. In addition to an identifying title, each expenditure provision is assigned an expenditure number, the first digit of which corresponds to the different sections of this report, such as 1 for the individual income tax and 5 for the insurance premium tax. The remaining portion of the numeric identifier is used to divide the expenditures into different subcategories such as federal and state expenditures, and deductions and credits. Only in the case of the sales tax exemptions does the expenditure number have any relationship to the state tax code section to which the expenditure item is associated. The numeric identifiers for each provision are consistent across tax expenditure reports and can be used to compare expenditure estimates from one report to the next. Following the summary tables are detailed sections for each of the specific taxes covered in this report. These detailed sections begin with a brief description of the tax, latest figures on revenue collection and any information on recent modifications to the base. These detailed sections also include additional information for each of the expenditure items such as the statute number, the year in which the expenditure provision was enacted and the year in which it became effective, information on the data and estimate reliability and data source, a more detailed description of the tax expenditure provision, and the value of the expenditure provision. In the case of those 8|Page credit provisions which can be taken against multiple taxes, the expenditure value associated with each tax is presented along with the total expenditure value for all taxes. Note that for these credits this same information is repeated in each tax section of this report. The report concludes with an appendix that includes tables listing recently expired provisions, sales and use tax expenditures by type, and distributional analysis for a selected number of income tax provisions. 9|Page Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 Federal Income Tax Provisions1 1.1.001 Exclusion of employee meals and lodging 1.1.002 1.1.003 Exclusion of housing allowances for ministers Exclusion of employerprovided child care 1.1.004 Exclusion of employee awards 1.1.005 1.1.006 1.1.007 1.1.008 1.1.009 1.1.010 Exclusion of employer contributions and earnings to pension plans includes Keoghs, defined benefit and defined contribution plans Exclusion of employer contributions for health care, health insurance premiums and longterm care insurance premiums Exclusion of employerpaid accident and disability premiums Exclusion of employer contributions for premiums on group long-term life insurance Exclusion of employerpaid transportation benefits and employerprovided transit and vanpool benefits Exclusion of benefits provided through cafeteria plans Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Federal Individual Income Tax Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion Exclusion 14 6 16 2 779 1,003 28 22 30 210 State FY 2016 15 6 17 2 1,006 1,010 29 22 31 216 State FY 2017 15 6 17 2 1,164 1,040 30 23 32 223 1 These are Internal Revenue Code provisions (IRC) that has been adopted by Georgia as part of its personal and corporate income tax. 10 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.1.011 Exclusion of employer- Federal Exclusion 1 provided adoption Individual assistance Income Tax 1.1.012 Exclusion of employer- Federal Exclusion 9 provided education Individual benefits (including Income Tax education assistance and tuition reduction benefits) 1.1.013 Exclusion of Federal Exclusion 45 miscellaneous fringe Individual benefits Income Tax 1.1.014 Exclusion of foreign Federal Exclusion 44 earned income Individual (including housing and Income Tax salary) 1.1.015 Exclusion of certain Federal Exclusion 11 allowances for federal Individual employees abroad Income Tax 1.1.016 Exclusion of benefits Federal Exclusion 59 and allowances to Individual armed forces personnel Income Tax (includes expenditure for military disability benefits) 1.1.017 Medical care and Federal Exclusion 25 Tricare Medical Individual Insurance for military Income Tax dependents and retirees 1.1.018 Exclusion of veterans' Federal Exclusion 58 benefits (includes Individual veterans disability Income Tax compensation, pensions, and readjustment benefits) 1.1.019 Exclusion of income Federal Exclusion 1 attributable to the Individual discharge of certain Income Tax student loan debt and National Health Service Corp and certain state educational loan repayments State FY 2016 1 9 46 44 12 61 26 62 1 State FY 2017 1 9 47 46 12 64 27 64 1 11 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.1.020 Exclusion of workers' Federal Exclusion 51 compensation benefits Individual (includes disability and Income Tax survivor benefits and medical benefits, and exclusion of damages on account of personal physical injuries or physical sickness) 1.1.021 Exclusion of special Federal Exclusion (m) benefits for disabled Individual coal miners2 Income Tax 1.1.022 Exclusion of untaxed Federal Exclusion 239 Social Security and Individual railroad retirement Income Tax benefits 1.1.024 Exclusion of certain Federal Exclusion 2 foster care payments Individual Income Tax 1.1.026 Exclusion of Federal Exclusion 14 scholarship and Individual fellowship income Income Tax 1.1.027 Exclusion of earnings Federal Exclusion 1 of Coverdell education Individual savings accounts and Income Tax interest on educational savings bonds 1.1.028 Exclusion of earnings Federal Exclusion 4 of qualified tuition Individual programs (including Income Tax prepaid tuition programs and savings account programs) 1.1.029 Exclusion for certain Federal Exclusion (m) agricultural cost- Individual sharing payments Income Tax 1.1.030 Exclusion of discharge Federal Exclusion 1 of indebtedness for Individual certain farmers Income Tax 1.1.031 Exclusion of interest Federal Exclusion (m) on state and local Individual government private Income Tax activity bonds State FY 2016 51 (m) 248 2 15 1 5 (m) 1 (m) State FY 2017 52 (m) 261 2 16 1 7 (m) 1 (m) 2 (m) Refers to a revenue loss of less than $1 million and (-m) refers to a revenue increase of less than $1 million. 12 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.1.032 Exclusion of capital Federal Exclusion 191 gains from sale of Individual principal residences Income Tax 1.1.033 Exclusion of capital Federal Exclusion 130 gains at death Individual Income Tax 1.1.034 Exclusion of capital Federal Exclusion -9 gains on gifts Individual Income Tax 1.1.035 Exemption from Federal Exclusion 2 imputed interest rules Individual Income Tax 1.1.036 Exclusion of combat Federal Exclusion 22 pay Individual Income Tax 1.1.037 Exclusion of energy Federal Exclusion (m) conservation subsidies Individual provided by public Income Tax utilities 1.1.039 Exclusion of gain for Federal Exclusion 4 certain small business Individual stock Income Tax 1.1.040 Exclusion of interest Federal Exclusion 1 on public purpose state Individual and local government Income Tax bonds 1.1.041 Exclusion of income Federal Exclusion 22 earned by voluntary Individual employees' beneficiary Income Tax associations 1.1.042 Exclusion of survivor Federal Exclusion (m) annuities paid to Individual families of public Income Tax safety officers killed in the line of duty 1.1.043 Exclusion of disaster Federal Exclusion (m) mitigation payments Individual Income Tax 1.2.001 Accelerated Federal Deduction 31 depreciation (MACRS) Individual Income Tax 1.2.002 Deduction of Federal Deduction 1 expenditures on Individual energy-efficient Income Tax commercial building property State FY 2016 212 State FY 2017 234 133 136 21 43 3 3 23 24 (m) (m) 4 4 1 2 22 23 (m) (m) (m) (m) 32 31 1 1 13 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.2.003 Deduction of Federal Deduction (m) exploration and Individual development costs of Income Tax nonfuel minerals, includes excess of depreciation over cost depletion, nonfuel minerals 1.2.004 Amortization of Federal Deduction (m) business startup costs Individual Income Tax 1.2.005 Expensing of research Federal Deduction (m) and development costs Individual in lieu of the Research Income Tax and Development tax credit 1.2.006 Expensing of magazine Federal Deduction (m) circulation Individual expenditures Income Tax 1.2.007 Deductions of oil and Federal Deduction 0 gas exploration and Individual development costs Income Tax 1.2.008 Special treatment for Federal Deduction 2 expenses related to Individual timber production Income Tax 1.2.009 Expensing under IRC Federal Deduction 63 section 179 of Individual depreciable business Income Tax property 1.2.010 Exceptions for publicly Federal Deduction 7 traded partnerships Individual with qualified income Income Tax derived from certain energy-related activities 1.2.011 Treatment of income Federal Deduction 1 from exploration and Individual mining as qualified Income Tax income for publicly traded partnerships 1.2.012 Various agricultural Federal Deduction 3 expensing provisions Individual Income Tax 1.2.013 Community and Federal Deduction 1 regional development Individual incentives Income Tax State FY 2016 (m) State FY 2017 (m) (m) (m) (m) (m) (m) (m) 0 0 2 2 54 23 7 7 1 1 3 3 1 1 14 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.2.014 Expensing to remove Federal Deduction (m) architectural and Individual transportation barriers Income Tax to the handicapped and elderly 1.2.015 Inventory methods and Federal Deduction 2 valuation, (including Individual last-in first-out, lower Income Tax of cost or market, specific identification for homogenous products) 1.2.017 Health Savings Federal Deduction 5 Accounts Individual Income Tax 1.2.018 Deduction of property Federal Deduction 145 taxes on real property Individual Income Tax 1.2.019 Deduction of Federal Deduction 366 nonbusiness state and Individual local government Income Tax income taxes, sales taxes and property taxes 1.2.020 Deduction of mortgage Federal Deduction 493 interest on owner- Individual occupied residences Income Tax 1.2.021 Deduction of charitable Federal Deduction 403 contributions (includes Individual deductions for health, Income Tax education, and for purposes other than health and education) 1.2.022 Deduction of casualty Federal Deduction 3 and theft losses Individual Income Tax 1.2.023 Deduction of overnight Federal Deduction 1 expenses for National Individual Guard and Reserve Income Tax members 1.2.024 Deduction of Federal Deduction 1 premiums for qualified Individual mortgage insurance Income Tax 1.2.025 Deduction of interest Federal Deduction 10 on student loans Individual Income Tax State FY 2016 (m) State FY 2017 (m) 2 2 6 7 152 162 390 409 529 576 417 430 3 3 1 1 0 0 11 12 15 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.2.026 Deduction of higher Federal Deduction 1 education expenses Individual Income Tax 1.2.027 Deduction of teacher Federal Deduction (m) classroom expenses Individual Income Tax 1.2.028 Deduction of health Federal Deduction 28 insurance premiums Individual and long-term care Income Tax insurance premiums by the self-employed 1.2.029 Deduction of medical Federal Deduction 61 expenses and long- Individual term care expenses Income Tax 1.2.030 Deduction of IRA Federal Deduction 127 contributions (includes Individual traditional IRAs and Income Tax Roth IRAs) 1.3.001 Like-kind exchanges Federal Deferral 23 Individual Income Tax 1.3.002 Special rules for Federal Special Rule (m) magazine, paperback Individual book, and record Income Tax returns 1.3.003 Five-year carryback for Federal Special Rule 1 net operating losses Individual attributable to farming Income Tax 1.3.004 Special rules for Federal Special Rule (m) mining reclamation Individual reserves Income Tax 1.3.005 Cash accounting, other Federal Special Rule 12 than agriculture Individual Income Tax 1.3.006 Deferral of gain on Federal Special Rule 9 non-dealer installment Individual sales Income Tax 1.3.007 Completed contract Federal Special Rule 1 rules Individual Income Tax 1.3.008 Special treatment of Federal Deferral 2 employee stock Individual ownership plans Income Tax (ESOPs) (includes deferral of tax on State FY 2016 0 0 27 65 129 24 (m) 1 (m) 12 7 1 2 State FY 2017 0 0 27 69 118 24 (m) 1 (m) 13 6 1 2 16 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 certain employee stock plans) 1.3.009 Income averaging for farmers and fishermen Federal Individual Income Tax Georgia Individual Income Tax Provisions 1.4.001 Personal Exemption State Individual Income Tax 1.4.002 Retirement Income State Individual Income Tax 1.4.003 Exclusion of federally State taxable Social Security Individual benefits Income Tax 1.4.004 Georgia Higher Education Savings Plan Contributions State Individual Income Tax 1.4.005 Interest on U.S. obligations State Individual 1.4.006 Certain military income Income Tax State Individual Income Tax 1.4.007 Organ donation expenses State Individual Income Tax 1.4.008 Aged 65/Blind deduction State Individual Income Tax 1.4.009 Certain dependent's unearned income State Individual Income Tax 1.4.010 Premiums for high- State deductible health plans Individual Income Tax 1.4.011 Salaries and wages reduced from Federal State Individual taxable income Income Tax because of the Federal Jobs Tax Credit 1.4.012 Individual retirement account, Keogh, SEP and Sub-S plan withdrawals where tax has been paid to State Individual Income Tax Special Rule Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption (m) 1 1 1,006 1,018 1,031 851 898 942 151 158 165 5 6 7 7 6 7 Estimate not available at this time (m) (m) (m) 6 6 6 Estimate not available at this time 2 2 2 Estimate not available at this time Estimate not available at this time 17 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 1.4.013 1.4.014 1.4.015 1.4.016 1.4.017 1.4.018 1.4.019 1.4.020 1.5.001 1.6.001 Georgia because of the difference between Georgia and Federal law for tax years 1981 through 1986 Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986 Income from any fund, program or system which is exempted by federal law or treaty. Certain income in which the Sub-S election is not recognized by Georgia or another state in order to avoid double taxation Adjustment for certain teachers retired from the Teachers Retirement System of Georgia Amount claimed by certain employers in food and beverage establishments Adjustment of certain payments to minority subcontractors Adjustments to federal AGI for certain Georgia resident partners Exemption for certain disaster relief firms Standard Deduction Rural Physician Credit State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Deduction Credit Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time 189 199 209 1 1 2 18 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 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 1.6.012 1.6.013 1.6.014 1.6.015 1.6.016 1.6.017 1.6.018 1.6.019 Disabled person's home purchase or retrofit credit Driver Education Credit Disaster Assistance Credit Qualified Caregiving Expense Credit Tax credit for life insurance for Georgia National Guard and Air National Guard Child and Dependent Care Credit Adoption of Foster Child Credit Low-Income Credit Credit for taxes paid to another state Georgia Job 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 State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax State Individual Income Tax Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) 1 1 1 35 36 36 3 3 3 8 9 9 235 254 275 70 71 73 30 35 38 Estimate combined with 1.6.012 Estimate not available at this time 15 15 16 1 1 1 6 6 6 Estimate combined with 1.6.018 19 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 1.6.020 Film Tax Credit Total State Credit 243 Credit 1.6.021 Research Tax Credit Total State Credit 34 Credit 1.6.022 Seed-Capital Fund Total State Credit (m) Credit Credit 1.6.023 Qualified Health Total State Credit (m) Insurance Expense Credit Credit 1.6.025 Qualified Total State Credit (m) Transportation Credit Credit 1.6.026 Business Enterprise Total State Credit (m) Vehicle Credit Credit 1.6.027 Employer's credit for Total State Credit 10 providing or Credit sponsoring child care for employees and employer's credit for purchasing child care property 1.6.028 Low-Income Housing Total State Credit 190 Credit Credit 1.6.029 Historic Rehabilitation Total State Credit 2 Credit Credit 1.6.030 Diesel Particulate Total State Credit (m) Emission Reduction Credit Technology Equipment Credit 1.6.031 Low- & Zero-emission Total State Credit 36 Vehicle Credit & Credit Electric Vehicle Charger Credit 1.6.032 Land Conservation Total State Credit 24 Credit Credit 1.6.033 Clean Energy Property Total State Credit 2 & Wood Residuals Credit Credit 1.6.034 Georgia Employer Total State Credit (m) GED Tax Credit Credit (previously known as the Employer's Credit for Basic Skills Education) 1.6.035 Employer's Credit for Total State Credit 31 Approved Employee Credit Retraining State FY 2016 272 22 (m) (m) State FY 2017 308 23 (m) (m) (m) (m) (m) (m) 10 10 203 218 2 32 (m) (m) 28 3 35 15 2 1 (m) 1 32 33 20 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 1.6.036 Qualified Education Total State Expense Credit Credit 1.6.037 Qualified Investor Tax Total State Credit Credit 1.6.038 Energy-efficient or water-efficient equipment credit Total State Credit 1.6.039 Tax credit for water Total State conservation facilities Credit and qualified water conservation investment property 1.6.040 Tax credit for shift from groundwater usage Total State Credit 1.6.041 Tax credit for existing business enterprises undergoing qualified business expansion Total State Credit 1.6.042 Tax credit for purchase of alternative fuel heavy-duty or mediumduty vehicle Total State Credit 1.6.043 Bank Tax Credit Total State Credit Federal Corporate Income Tax Provisions 2.1.001 Exemption from imputed interest rules Federal Corporate Income Tax 2.1.002 Exclusion of interest on state and local government private activity bonds Federal Corporate Income Tax 2.1.003 Exclusion of contributions in aid of construction for water and sewer utilities Federal Corporate Income Tax 2.1.004 Exclusion of earnings Federal of certain Corporate environmental Income Tax settlement funds 2.1.005 Exclusion of certain agricultural costsharing payments Federal Corporate Income Tax Credit Credit Credit Credit Credit Credit Credit Credit Exclusion Exclusion Exclusion Exclusion Exclusion 45 45 45 (m) (m) (m) 0 0 0 Estimate not available at this time Estimate not available at this time Estimate combined with 1.6.013 0 1 2 10 11 11 (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) 21 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 2.1.006 Exclusion of gain or Federal Exclusion (m) loss on sale or Corporate exchange for Income Tax brownfield property 2.1.008 Exclusion of disaster Federal Exclusion (m) mitigation payments Corporate Income Tax 2.1.009 Exclusion of interest Federal Exclusion (m) on public purpose state Corporate and local government Income Tax bonds 2.1.010 Various foreign Federal Exclusion 273 provisions including Corporate inventory property Income Tax sales source rule exception, interest expense allocation, deferral of active income of controlled foreign corporations, deferral of active financing income 2.2.001 Accelerated Federal Deduction 5 depreciation (MACRS) Corporate Income Tax 2.2.002 Deduction of Federal Deduction (m) expenditures on Corporate energy-efficient Income Tax commercial building property 2.2.003 Deduction of Federal Deduction (m) exploration and Corporate development costs of Income Tax nonfuel minerals 2.2.004 Amortization of Federal Deduction (m) business start-up costs Corporate Income Tax 2.2.005 Expensing of research Federal Deduction 7 and development costs Corporate in lieu of the R&D tax Income Tax credit 2.2.006 Expensing of magazine Federal Deduction (m) circulation Corporate expenditures Income Tax State FY 2016 (m) (m) (m) 300 5 (m) (m) (m) 8 (m) State FY 2017 (m) (m) (m) 317 5 (m) (m) (m) 8 (m) 22 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 2.2.007 Deductions of oil and Federal Deduction 0 gas exploration and Corporate development costs Income Tax 2.2.008 Special treatment of Federal Deduction 3 expenses related to Corporate timber production Income Tax 2.2.009 Deduction of charitable Federal Deduction 14 contributions (includes Corporate deductions for health, Income Tax education, and for purposes other than health and education) 2.2.011 Expensing under IRC Federal Deduction 3 section 179 of Corporate depreciable business Income Tax property 2.2.012 Amortization of air Federal Deduction 2 pollution control Corporate facilities Income Tax 2.2.014 Various agricultural Federal Deduction (m) expensing provisions Corporate Income Tax 2.2.015 Community and Federal Deduction (m) regional development Corporate incentives Income Tax 2.2.016 Expensing to remove Federal Deduction (m) architectural and Corporate transportation barriers Income Tax to the handicapped and elderly 2.2.017 Inventory methods and Federal Deduction 5 valuation Corporate Income Tax 2.2.018 Limits on deductible Federal Exemption -3 compensation and Corporate disallowance of Income Tax deduction for excess parachute payments3 2.3.001 Like-kind exchanges Federal Deferral 22 Corporate Income Tax 2.3.002 Special rules for Federal Special Rule (m) magazine, paperback Corporate Income Tax 3 Negative values denote a tax expenditure that is estimated to increase state revenues. State FY 2016 0 State FY 2017 0 3 4 15 15 (m) (m) 2 1 (m) (m) (m) (m) (m) (m) 5 5 -3 -3 21 22 (m) (m) 23 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 book, and record returns 2.3.003 Five-year carryback for Federal net operating losses Corporate attributable to farming Income Tax 2.3.004 Special rules for mining reclamation reserves Federal Corporate Income Tax 2.3.005 Cash accounting, other Federal than agriculture Corporate Income Tax 2.3.006 Deferral of gain on non-dealer installment sales Federal Corporate Income Tax 2.3.007 Completed contract rules Federal Corporate Income Tax 2.3.008 Special treatment of employee stock Federal Corporate ownership plans Income Tax (ESOPs) (includes deferral of tax on certain employee stock plans) 2.3.009 Deferral of capital construction costs of shipping companies Federal Corporate Income Tax Georgia Corporate Income Tax Provisions 2.4.001 Single-Factor Apportionment Corporate Income Tax 2.4.002 Throwback Rule Corporate Income Tax 2.4.003 Corporate Receipts Sourcing Corporate Income Tax 2.5.001 Interest on obligations Corporate of United States Income Tax 2.5.002 Exception to intangible Corporate expenses and related Income Tax interest cost 2.5.003 Exemption for certain Corporate disaster relief firms Income Tax 2.6.001 Georgia Job Tax Credit Total State Credit 2.6.002 Quality Jobs Tax Credit Total State Credit Special Rule Special Rule Special Rule Special Rule Special Rule Deferral Deferral Apportionment Apportionment Apportionment Deduction Deduction Exemption Credit Credit (m) (m) (m) (m) (m) (m) 1 1 1 14 13 13 3 3 3 (m) (m) (m) (m) (m) (m) Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time Estimate not available at this time 70 71 73 30 35 38 24 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 2.6.003 2.6.004 2.6.005 2.6.006 2.6.007 2.6.008 2.6.009 2.6.010 2.6.011 2.6.012 2.6.014 2.6.015 2.6.016 2.6.017 2.6.018 2.6.019 2.6.020 New Facilities Jobs Credit New Manufacturing Facilities Property Credit Manufacturer's Investment Tax Credit Optional Investment Tax Credit Port Activity Tax Credit Alternative Port Activity Tax Credit Film Tax Credit Research Tax Credit Seed-Capital Fund Credit Qualified Health Insurance Expense Credit Qualified Transportation Credit Business Enterprise Vehicle Credit Employer's Credit for providing or sponsoring child care for employees and 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 Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Estimate combined with 2.6.001 Estimate not available at this time 15 15 16 1 1 1 6 6 6 Estimate combined with 2.6.007 243 272 308 34 22 23 (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) 10 10 10 190 203 218 2 2 32 (m) (m) (m) 36 28 3 25 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 2.6.021 2.6.022 2.6.023 2.6.024 2.6.025 2.6.026 2.6.027 2.6.028 2.6.029 2.6.030 2.6.031 2.6.032 Land Conservation Credit Clean Energy Property & Wood Residuals Credit Georgia Employer GED Tax Credit (previously known as the Employer's Credit for Basic Skills Education) Employer's Credit for Approved Employee Retraining Qualified Education Expense Credit Qualified Investor's Tax Credit Energy-Efficient or Water-Efficient Equipment Credit Tax credit for waterconservation facilities and qualified waterconservation investment property Tax credit for shift from groundwater usage Tax credit for existing business enterprises undergoing qualified business expansion Tax credit for purchases of alternative fuel heavyduty or medium-duty vehicle Bank Tax Credit Corporate Net Worth Tax 3.001 3.002 Exemption for nonprofit corporations Exemptions from the Net Worth Tax Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Total State Credit Net Worth Tax Net Worth Tax Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Credit Exemption Exemption 24 35 15 2 2 1 (m) (m) 1 31 32 33 45 45 45 (m) (m) (m) 0 0 0 Estimate not available at this time Estimate not available at this time Estimate combined with 2.6.002 0 1 2 10 11 11 Estimate not available at this time Estimate not available at this time 26 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 Sales and Use Tax 4.00100 Sales to Federal Government, State of Georgia or a county or municipality in Georgia or any agency of such governments 4.00200 Tangible personal property furnished by the Federal Government or any county or municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system 4.00300 Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel 4.00400 Sales of transportation furnished by a county or municipal public transit system or public transit authorities 4.00500 Sales of transportation furnished by an approved and authorized urban transit system 4.00600 Sales to any Hospital Authority created by Georgia law 4.00610 Sales to any Housing Authority created by Georgia law 4.00620 Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Estimate not available at this time Estimate not available at this time Estimate not available at this time 9 9 10 Estimate Combined With 4.00400 Estimate Combined with 4.00700 2 2 2 2 2 2 27 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 or operating a coliseum and related facilities 4.00630 Sales to any Sales and Exemption (m) agricultural Use Tax commission created by the Department of Agriculture 4.00700 Sales of tangible Sales and Exemption 93 personal property and Use Tax services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function 4.00705 Sales of tangible Sales and Exemption 1 personal property to a Use Tax non-profit health center established and receiving funds pursuant to the U.S. Public Health Service Act 4.00710 Sales of tangible Sales and Exemption 2 personal property and Use Tax services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities 4.00720 Sales to Georgia Sales and Exemption (m) Society of the Use Tax Daughters of the American Revolution 4.00730 Sales of tangible Sales and Exemption 1 property and services Use Tax to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level 4.00800 Sales of tangible Sales and Exemption 35 personal property and Use Tax State FY 2016 State FY 2017 (m) (m) 97 101 1 1 2 2 (m) (m) 1 1 36 37 28 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.00900 4.01000 4.01100 4.01200 4.01300 4.01400 4.01500 services to the University System of Georgia and its educational units Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Sale of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute 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 Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Estimate not available at this time 2 2 2 (m) (m) (m) 7 7 6 1 1 1 (m) (m) (m) (m) (m) (m) 29 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.01510 4.01700 4.01800 4.01900 4.02000 4.02100 institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious institution 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 Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption (m) (m) (m) 24 21 18 Estimate not available at this time Estimate not available at this time See expenditure estimate for Residential Utilities (4.5009) Estimate not available at this time 30 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.02200 4.02300 4.02400 4.03000 4.03100 4.03200 4.03300 4.03310 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 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 Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption See expenditure estimates for services (4.50003, 4.50010, 4.50011) See expenditure estimates for Services (4.50003, 4.50010, 4.50011) Estimate not available at this time (m) (m) (m) Estimate not available at this time Estimate not available at this time Estimate not available at this time 21 0 0 31 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.03410 4.03420 4.03600 4.03610 4.03800 4.03900 4.03910 4.04000 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 Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water pollution Machinery and equipment used for water conservation and incorporated into a qualified water conservation facility Sale of 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 Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Estimate not available at this time 1 1 1 (m) (m) (m) Estimate not available at this time (m) (m) (m) 2 2 2 Estimate not available at this time 31 31 24 32 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.04100 4.04200 4.04300 4.04400 4.04500 4.04600 4.04700 military aircraft, vehicles, or missiles Sale of tangible personal property and services to a nonprofit child-caring institution, 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 coinoperated amusement machines for which individual permits are required Sale 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 Sale of tangible personal property or taxable services to nonprofit blood banks Sale of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption 1 1 1 Estimate not available at this time 3 3 3 Estimate not available at this time Estimate not available at this time 1 1 1 430 452 475 33 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 controlled substances or dangerous drugs 4.04800 Sale of crab bait to Sales and Exemption (m) licensed commercial Use Tax fishermen 4.05000 Sales of insulin Sales and Exemption 21 syringes and blood Use Tax glucose level measuring strips dispensed without a prescription 4.05100 Sale of oxygen when Sales and Exemption (m) prescribed by a Use Tax licensed physician 4.05200 Sale or use of hearing Sales and Exemption 4 aids Use Tax 4.05300 Transactions where Sales and Exemption 114 food stamps or WIC Use Tax coupons are used as the method of payment of payment 4.05400 Sale or use of any Sales and Exemption 39 durable medical Use Tax equipment or prosthetic device prescribed by a physician 4.05500 Sale of Georgia lottery Sales and Exemption 163 tickets Use Tax 4.05600 Sale by any qualified Sales and Exemption 1 nonprofit parent- Use Tax teacher organization 4.05700 Food purchased for Sales and Exemption 469 off-premises Use Tax consumption 4.05710 Sales of food and Sales and Exemption 3 beverages to a Use Tax qualified food bank (expires June 30, 2016) 4.05720 Exemption for Sales and Exemption 1 prepared food and food Use Tax ingredients that are donated to a qualified nonprofit agency and used for hunger relief purposes State FY 2016 State FY 2017 (m) (m) 22 23 (m) (m) 4 4 113 113 41 42 166 169 1 1 486 499 3 0 1 1 34 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.05730 4.05900 4.06000 4.06100 4.06200 4.06300 4.06500 4.06600 4.06700 4.06800 Exemption for prepared food and food ingredients that are donated following a natural disaster and used for disaster relief Sale of eligible food and beverages by any Girl or Boy Scout council Sale 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 Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen Sale of gold, silver, or platinum bullion Sale of coins or currency Sale of certain computer equipment when the total qualifying purchases by a high technology Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption (m) (m) (m) 1 1 1 (m) (m) (m) Estimate not available at this time 2 2 2 (m) (m) (m) (m) (m) (m) Estimate not available at this time 4 4 4 Estimate not available at this time 35 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 company exceed $15 million 4.06900 Sales of machinery and Sales and Exemption (m) equipment and material Use Tax incorporated and used in a clean room of Class 100 or less 4.07000 Sale of natural gas Sales and Exemption 54 used directly in the Use Tax manufacture of electricity 4.07100 Sale to or by an Sales and Exemption (m) organization whose Use Tax primary purpose is to raise funds for books, materials, and programs for public libraries 4.07200 Sale of wheelchairs Sales and Exemption (m) and attachments for Use Tax wheelchairs when sold to permanently disabled individuals 4.07500 Sales tax holiday for Sales and Exemption 40 back to school items Use Tax (expired August 1, 2015) 4.07600 Exemption for personal Sales and Exemption 0 property used in the Use Tax renovation or expansion of an aquarium 4.08100 The purchase of food Sales and Exemption 4 and nonalcoholic Use Tax beverages provided at no charge aboard a qualified airline 4.08200 Sales tax holiday for Sales and Exemption 1 water-efficient and Use Tax energy-efficient purchases (expired October 4, 2015) 4.08300 Sale of biomass Sales and Exemption (m) materials used to Use Tax produce electricity or steam or used to State FY 2016 State FY 2017 (m) (m) 54 51 (m) (m) (m) (m) 42 0 1 1 4 4 1 0 1 1 36 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 4.08600 4.08700 4.08800 4.09100 4.09300 4.09400 4.09600 produce electricity or steam intended for sale Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft Sales of tangible personal property used to renovate or expand a zoological institution (expires June 30, 2018) Sale of tangible personal property used in the construction of a qualified civil rights museum (expired July 30, 2015) The sale of prewritten software which has been delivered to the purchaser electronically or by means of load and leave Sale of tangible personal property used for and in the construction of a competitive project of regional significance, for the period commencing January 1, 2012, until June 30, 2016 The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale Exemption for sales or use of construction Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption 20 20 20 0 0 (m) (m) 0 0 Estimate not available at this time 21 21 0 Estimate not available at this time 0 (m) 0 37 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 4.3.2 4.3.3 4.50000 4.50001 4.50002 4.50003 4.50004 4.50005 4.50006 4.50007 4.50008 materials used for or in the construction of buildings at a private college Exemptions for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing Sale and use by a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment Admissions and Amusements Agricultural Services Automotive Services Business Services Computer and Online Services Construction Labor Fabrication, Installation, and Repair Services Finance, Insurance, and Real Estate Industrial and Mining Services Sales and Use Tax Sales and Use Tax Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption 3,374 178 157 145 132 664 358 1,485 220 1,021 10 State FY 2016 3,481 183 159 147 134 673 362 1,504 222 1,034 11 State FY 2017 3,579 187 165 153 130 698 376 1,559 231 1,072 11 38 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 4.50009 4.50010 Residential Utility Service Personal Services 4.50011 Professional Services 4.50012 Storage 4.50013 Transportation Services 4.70000 4.90000 Compensation of dealers for reporting and collecting tax Sales tax exemption for casual sales Insurance Premium Tax 5.00100 5.00200 5.00300 5.00400 5.00500 Deduction of retaliatory taxes paid to other states Insurance premium tax credits - Georgia Job Tax Credit Exemption for premiums of highdeductible health plans Exemption for insurance companies that only insure places of worship Insurance abatements 5.00600 5.00700 Special deductions for life insurance companies Insurance premium tax credit Low-Income Housing Credit Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax for Services Sales and Use Tax Sales and Use Tax Insurance Premium Tax Total State Credit Insurance Premium Tax Insurance Premium Tax Insurance Premium Tax Insurance Premium Tax Total State Credit Exemption Exemption Exemption Exemption Exemption Exemption Exemption Deduction Credit Exemption Exemption Rate Reduction Deduction Credit 81 277 1,949 69 (m) 60 2 (m) 70 6 (m) 135 141 190 State FY 2016 82 281 1,974 70 (m) 60 2 (m) 71 8 (m) 138 144 203 State FY 2017 85 291 2,046 72 (m) 63 2 (m) 73 8 (m) 141 147 218 39 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 Motor Fuel Tax 6.00100 Motor fuel tax refunds for agricultural purposes 6.00200 Sale of fuel to mass transit vehicles 6.00300 Sale of fuel to campus transportation vehicles 6.00400 Motor fuel tax exemption for aviation fuel 6.00500 Motor fuel tax vendor compensation 6.00600 Motor fuel tax exemption for public school buses Alcoholic Beverage Tax 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 200 gallons annually of homebrew 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 one-half of 0.5 percent alcohol by volume Cigar and Cigarette Excise Tax 8.00100 Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Motor Fuel Tax Motor Fuel Tax Motor Fuel Tax Motor Fuel Tax Motor Fuel Tax Motor Fuel Tax Alcoholic Beverage Tax Alcoholic Beverage Tax Alcoholic Beverage Tax Alcoholic Beverage Tax Alcoholic Beverage Tax Alcoholic Beverage Tax Cigar and Cigarette Excise Tax Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Exemption Estimate not available at this time 2 0 0 Estimate included in 6.00200 (m) 1 1 7 9 12 5 0 0 Estimate not available at this time Estimate not available at this time 1 1 1 (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) (m) 40 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 State FY 2016 State FY 2017 Georgia War Veterans Nursing Home 8.00200 De minimis amount brought into the state by one person Cigar and Cigarette Excise Tax Exemption 8.00300 Cigars and cigarettes stored in a public warehouse Cigar and Cigarette Excise Tax Exemption 8.00400 Certain cigars and Cigar and Exemption cigarettes held by Cigarette licensed dealers Excise Tax Financial Institutions Special State Occupation Tax 9.00100 Deduction for interest paid Financial Institutions Business License Tax Deduction 9.00200 Deductions for income from authorized activities of a domestic international banking Financial Institutions Business License Deduction facility Tax 9.00300 Deduction for income Financial Deduction from banking business with persons or entities outside the U.S. Institutions Business License Tax Special Assessment of Forest Land Conservation Use Property 10.00000 Special assessment of forest land conservation use property State Grant Credit Alternative Ad Valorem Tax on Motor Vehicles 11.001 Reduced rate for Title Fee related family transfers Rate Reduction 11.002 Disabled veteran exemption Title Fee Exemption 11.003 Reduced rate for rental Title Fee vehicles Rate Reduction 11.004 Reduced rate for vehicles manufactured in years 1963 through Title Fee Rate Reduction 11.005 1985 Reduced rate for Title Fee Rate salvage vehicles Reduction Estimate not available at this time Estimate not available at this time Estimate not available at this time 2 2 2 Estimate not available at this time Estimate not available at this time 29 35 35 5 6 5 (m) (m) (m) 56 65 57 (m) (m) (m) 23 28 25 41 | P a g e Expenditure Summary Summary of State Tax Expenditures Tax Type of State Expenditure FY 2015 11.006 Dealer loaner vehicle Title Fee Exemption 7 exemption 11.007 Reduced rate for Title Fee Rate (m) donated vehicles Reduction 11.008 Extended payment Title Fee Exemption 5 period for out-of-state vehicles 11.009 Trade-in exemption Title Fee Exemption 338 (including rebates and cash discounts) 11.010 Special assessment for Title Fee Exemption 20 used vehicles 11.011 Special assessment for Title Fee Exemption -46 new vehicles 11.012 Buy here pay here Title Fee Rate 3 transactions Reduction 11.013 Exemption from Title Fee Exemption (m) TAVT for leased vehicles qualifying for Manufacturing Headquarters State FY 2016 5 (m) 2 345 21 -56 6 (m) State FY 2017 3 (m) -2 303 18 -49 6 (m) 42 | P a g e 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 six brackets, ranging from 1 percent to 6 percent, has remained largely unchanged since 1955. 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 $9.0 billion in FY 2014 and accounted for 50 percent of Georgia's revenues from taxation. In CY 2014, 4.3 million individual state returns were filed. 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's 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 the version of AGI adopted by Georgia. After computing the Georgia version of AGI, taxpayers deduct an amount representing either the value of their Georgia itemized deductions or the Georgia standard deduction. In addition, for tax year 2012 and before, filers were allowed a personal exemption of $5,400 for joint filers and $2,700 for other filers and $3,000 for each dependent. For tax years after 2012, the personal exemption for joint filers is $7,400 and is $3,700 for married taxpayers filing a separate return. The Tax Expenditure Report includes the expenditures associated with both state and federal tax provisions. Because the Georgia individual income tax is based on the federal system, expenditures that are present at the federal level have revenue implications at the state level. For example, changes to itemized deductions by the federal government have repercussions on state tax revenues. The value of the expenditure as it relates to state taxes paid by those filing a Georgia return is presented in section 1.1 on federal exclusions. In some cases, Georgia might not adopt a federal provision. In that case, the expenditure is not listed because there is no loss of revenue to the state. In general, the value of the federal tax expenditure to the state of Georgia is determined by allocating a portion of the federal tax base associated with the expenditure estimate as estimated by the Joint Committee on Taxation for the U.S. Congress. The data and estimate reliability for the conformity provisions are considered class A. In some cases though, the value of the Georgia estimates are highly sensitive to the assumptions made concerning the appropriate tax rate for a given expenditure provision and the allocation factor that is used to determine the amount of federal activity associated with Georgia. Therefore, any changes to provisions that may occur because of federal legislative action that occurred after that period are not reflected in the estimates. 43 | P a g e The explanations of the federal conformity provisions are taken from Tax Expenditures: Compendium of Background Material in Individual Provisions, published by the Committee on the Budget, United States Senate and prepared by the Congressional Research Service, December 2012. 44 | P a g e 1.1 Federal Exclusions 1.1.001 1.1.002 1.1.003 1.1.004 1.1.005 Exclusion of employee meals and lodging Federal Statute IRC section 119 and 132(e)(2) Description: Employees are allowed to exclude the fair market value of meals and lodging furnished by employers if provided on the employer's premises for the convenience of the employer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 14 15 15 (m) Denotes a value of less than $1 million Exclusion of housing allowances for ministers Federal Statute IRC Section 107 and 265 Description: In general, this provision allows ministers to deduct certain housing related expenditures from their gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 6 6 6 (m) Denotes a value of less than $1 million Exclusion of employer-provided child care Federal Statute IRC Section 129 Description: Payments by an employer, under a dependent care assistance program, for qualified dependent care assistance provided to an employee are excluded from the employee's income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 16 17 17 (m) Denotes a value of less than $1 million Exclusion of employee awards Federal Statute IRC Section 74(c) and 274(j) Description: This provision provides an exclusion for certain awards of tangible personal property given to employees for length of service or for safety achievement. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Exclusion of employer contributions and earnings to pension plans includes Keoghs, defined benefit and defined contribution plans Federal Statute IRC Sections 401-407, 410-418E, and 457 Description: Employer contributions to qualified pension, profit-sharing, stock-bonus, and annuity plans on behalf of an employee are not taxable to the employee. Furthermore, the employee is generally not taxed on the benefits when they are distributed. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 779 1,006 1,164 (m) Denotes a value of less than $1 million 45 | P a g e 1.1.006 1.1.007 1.1.008 1.1.009 1.1.010 1.1.011 Exclusion of employer contributions for health care, health insurance premiums and long- term care insurance premiums Federal Statute IRC Sections 105,106, and 125 Description: Employees are allowed to exclude contributions by their employers for health care coverage for themselves and their dependents. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1,003 1,010 1,040 (m) Denotes a value of less than $1 million Exclusion of employer-paid accident and disability premiums Federal Statute IRC Sections 105 and 106 Description: Premiums paid by employers for employee accident and disability insurance plans are excluded from the taxable income of employees. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 28 29 30 (m) Denotes a value of less than $1 million Exclusion of employer contributions for premiums on group long-term life insurance Federal Statute IRC Section 79 Description: Premiums paid by the employer for qualified group-term life insurance plans for the employee are excluded from employee's taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 22 22 23 (m) Denotes a value of less than $1 million Exclusion of employer-paid transportation benefits and employer-provided transit and vanpool benefits Federal Statute IRC Section 132(f) Description: Employer provided qualified transportation benefits are excluded from employee taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 30 31 32 (m) Denotes a value of less than $1 million Exclusion of benefits provided through cafeteria plans Federal Statute IRC Section 125 Description: Qualified benefits offered through an employer's cafeteria plan are not included as taxable income to the employee. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 210 216 223 (m) Denotes a value of less than $1 million Exclusion of employer-provided adoption assistance Federal Statute IRC Section 137 Description: Benefits received from a qualified employer-sponsored adoption assistance program are excludable from taxable income for the employee. 46 | P a g e 1.1.012 1.1.013 1.1.014 1.1.015 1.1.016 State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 1 1 1 Exclusion of employer-provided education benefits (including education assistance and tuition reduction benefits) Federal Statute IRC Section 117(d) and Section 127 Description: Tuition reductions for employees of educational institutions may be excluded from taxable income. In addition, an employee may exclude amounts paid by the employer for qualified educational assistance programs. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 9 9 9 (m) Denotes a value of less than $1 million Exclusion of miscellaneous fringe benefits Federal Statute IRC Section 132 and 117(D) Description: Certain miscellaneous fringe benefits provided by employers, including services provided at no additional costs, employee discounts, working condition fringes, de minimis fringes and certain tuition reductions, can be excluded from the employee's taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 45 46 47 (m) Denotes a value of less than $1 million Exclusion of foreign earned income (including housing and salary) Federal Statute IRC Section 911 Description: U.S. taxpayers who live and work abroad are allowed a capped exclusion of their wage and salary income. In addition, qualified individuals can also exclude certain excess foreign housing costs. This provision does not apply to federal employees working abroad. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 44 44 46 (m) Denotes a value of less than $1 million Exclusion of certain allowances for federal employees abroad Federal Statute IRC Section 912 Description: U.S. federal civilian employees who work abroad are allowed to exclude from taxable income certain special allowances they receive that are generally linked to the cost of living. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 11 12 12 (m) Denotes a value of less than $1 million Exclusion of benefits and allowances to armed forces personnel (includes expenditure for military disability benefits) Federal Statute IRC Section 112, 134, 104(a)(4) or (5) and 104(b) Description: Military personnel are provided with a variety of in-kind benefits (or cash 47 | P a g e 1.1.017 1.1.018 1.1.019 1.1.020 payments in lieu of such benefits) that are not taxed. In addition, certain members of the armed forces are eligible for tax exclusion of disability pay. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 59 61 64 (m) Denotes a value of less than $1 million Medical care and Tricare Medical Insurance for military dependents and retirees Federal Statute IRC Section 134 Description: Military personnel are provided with a variety of in-kind benefits (or cash payments in lieu of such benefits) that are not taxed. In addition, certain members of the armed forces are eligible for tax exclusion of disability pay. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 25 26 27 (m) Denotes a value of less than $1 million Exclusion of veterans' benefits (includes veterans disability compensation, pensions, and readjustment benefits) Federal Statute 38 U.S.C. Section 5301 Description: All benefits administered by the U.S. Department of Veterans Affairs are exempt from income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 58 62 64 (m) Denotes a value of less than $1 million Exclusion of income attributable to the discharge of certain student loan debt and National Health Service Corp and certain state educational loan repayments Federal Statute IRC Section 108(f) Description: This section provides that in certain instances, student loan cancellation and student loan repayment assistance may be excluded from gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Exclusion of workers' compensation benefits (includes disability and survivor benefits and medical benefits, and exclusion of damages on account of personal physical injuries or physical sickness) Federal Statute IRC Section 104(a)(1)-(5) Description: Employees are not taxed on the value of insurance contributions for workers' compensation medical benefits made on their behalf by employers, or on the medical benefits or reimbursements they actually receive. Workers' compensation benefits to employees in cases of work-related injury and to survivors in cases of work-related death are not taxable. Damages paid, through either a court award or a settlement, to compensate for physical injury or sickness are not included in income of the recipient. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 51 51 52 (m) Denotes a value of less than $1 million 48 | P a g e 1.1.021 1.1.022 1.1.024 1.1.026 1.1.027 Exclusion of special benefits for disabled coal miners Federal Statute IRC Section 104(a)(1) Description: Cash and medical benefits to coal mine workers or their survivors for total disability or death resulting from coal workers' pneumoconiosis (black lung disease) paid under the Black Lung Benefits Act generally are not taxable. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of untaxed Social Security and railroad retirement benefits Federal Statute IRC Section 86 Description: In general, Social Security and railroad retirement benefits are not subject to tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 239 248 261 (m) Denotes a value of less than $1 million Exclusion of certain foster care payments Federal Statute IRC Section 131 Description: Qualified payments are excluded from the foster care provider's gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Exclusion of scholarship and fellowship income Federal Statute IRC Section 117 Description: Scholarships and fellowships can be excluded from the gross income of students and their families provided: (1) the students are pursuing degrees and (2) the amounts are used for tuition and fees required for enrollment or for books, supplies, and equipment required for courses at a qualified institution. Amounts used for room, board and incidental expenses are not excluded from gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 14 15 16 (m) Denotes a value of less than $1 million Exclusion of earnings of Coverdell education savings accounts and interest on educational savings bonds Federal Statute IRC Section 530 Description: Contributions to a Coverdell Education Savings Account are not deductible but the earnings grow on a tax deferred basis. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 49 | P a g e 1.1.028 1.1.029 1.1.030 1.1.031 1.1.032 1.1.033 Exclusion of earnings of qualified tuition programs (including prepaid tuition programs and savings account programs) Federal Statute IRC Section 529 Description: Contributions to qualified tuition programs are not deductible at the federal level but earnings accumulate on a tax-deferred basis. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 4 5 7 (m) Denotes a value of less than $1 million Exclusion for certain agricultural cost-sharing payments Federal Statute IRC Section 126 Description: Grants made for the purpose of conserving soil and water resources or protecting the environment are excluded from the recipient's taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of discharge of indebtedness for certain farmers Federal Statute Sections 108 and 1070(b)(4) Description: The provision allows farmers who are solvent to treat the income arising from the cancellation of certain indebtedness as if they were insolvent taxpayers. As such, income that would normally be subject to tax would be excluded from tax under qualifying conditions. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Exclusion of interest on state and local government private activity bonds Federal Statute Various Description: Interest earned on qualified private activity bonds is tax exempt. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of capital gains from sale of principal residences Federal Statute IRC Section 121 Description: A taxpayer may exclude from federal income tax up to $250,000 of capital gain ($500,000 in the case of married taxpayers filing joint returns) from the sale or exchange of their principal residence. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 191 212 234 (m) Denotes a value of less than $1 million Exclusion of capital gains at death Federal Statute IRC Sections 1001,1002,1014,1015,1023,1040,1221, and 1222 Description: A capital gain tax is not imposed on the increased value of an asset when ownership of the property is transferred as a result of the death of the 50 | P a g e 1.1.034 1.1.035 1.1.036 1.1.037 1.1.039 owner. State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 130 133 136 Exclusion of capital gains on gifts Federal Statute IRC Sections 1001,1002,1014,1015,1023,1040,1221, and 1222 Description: A capital gain tax is not imposed on the increased value of an asset when ownership of the property is transferred as a gift during the owner's lifetime. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure -9 21 43 (m) Denotes a value of less than $1 million Exemption from imputed interest rules Federal Statute IRC Sections 163(e), 483, 1274, and 1274A Description: Debt instruments for amounts not exceeding an inflation adjusted maximum, given in exchange for real property, may not have imputed to them an interest rate greater than 9 percent. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 3 3 (m) Denotes a value of less than $1 million Exclusion of combat pay Federal Statute IRC Section 112 Description: Compensation received by active members of the armed forces is excluded from gross income for any month the service member served in a combat zone or was hospitalized as a result of an injury or illness incurred while serving in a combat zone. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 22 23 24 (m) Denotes a value of less than $1 million Exclusion of energy conservation subsidies provided by public utilities Federal Statute IRC Section 136 Description: In general, this provision allows customers to exclude from their gross income the value of any subsidy provided by a public utility for the purchase or installation of any energy conservation measure. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of gain for certain small business stock Federal Statute IRC Sections 1202 and 303 Description: This provision allows non-corporate taxpayers to exclude from gross income 50 percent of any gain from the sale or exchange of qualified small business stock issued after August 10, 1993. When a shareholder in a closely held business dies there is no reported gain or loss on the partial redemption of 51 | P a g e 1.1.040 1.1.041 1.1.042 1.1.043 stock. State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 4 4 4 Exclusion of interest on public purpose state and local government bonds Federal Statute IRC Sections 103, 141 and 146 Description: Interest income of qualifying governmental bonds is excluded from taxable income (expenditure estimate has been adjusted to reflect GA law that only interest on GA bonds is excluded from income). State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 1 1 2 Exclusion of income earned by voluntary employees' beneficiary associations Federal Statute IRC Sections 501(a) and 501(c)(9) Description: Provided certain requirements are met, the income earned by a voluntary employee beneficiary association (VEBA) is exempt from federal income taxes. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 22 22 23 (m) Denotes a value of less than $1 million Exclusion of survivor annuities paid to families of public safety officers killed in the line of duty Federal Statute IRC Section 101(h) Description: The surviving spouse of a public safety officer killed in the line of duty can exclude from gross income a survivor annuity payment under a governmental pension plan. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of disaster mitigation payments Federal Statute IRC Section 139 Description: Payments made for disaster mitigation under the Robert T. Stafford Disaster Relief and Emergency Insurance Act or the National Flood Insurance Act is excluded from income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 52 | P a g e 1.2 Federal Deductions 1.2.001 1.2.002 1.2.003 1.2.004 1.2.005 Accelerated depreciation (MACRS) Federal Statute IRC Sections 167 and 168 Description: Under the Modified Accelerated Cost Recovery System (MACRS) the cost of tangible depreciation property of certain energy property is allowed a shorter depreciation period. Taxpayers are allowed to depreciate the costs of new rental housing and certain other buildings and equipment on an accelerated schedule. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 31 32 31 (m) Denotes a value of less than $1 million Deduction of expenditures on energy-efficient commercial building property Federal Statute IRC Section 179D Description: This provision provides a formula-based tax deduction for all or part of the cost of energy-efficient commercial building property placed in service after December 31, 2005 and before January 1, 2014. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Deduction of exploration and development costs of nonfuel minerals, includes excess of depreciation over cost depletion, nonfuel minerals Federal Statute IRC Sections 263, 291, 616-617,56,1254 Description: Firms engaged in mining are permitted to expense certain exploration and development costs. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Amortization of business startup costs Federal Statute IRC Section 195 Description: This provision allows a business taxpayer to deduct up to $10,000 in qualified start-up expenditures. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Expensing of research and development costs in lieu of the Research and Development tax credit Federal Statute IRC Section 174 Description: This provision allows a business taxpayer to deduct certain research expenditures that are paid or incurred in connection with the taxpayer's trade or business. 53 | P a g e 1.2.006 1.2.007 1.2.008 1.2.009 1.2.010 State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) (m) (m) Expensing of magazine circulation expenditures Federal Statute IRC Section 173 Description: In general, current federal tax law allows publishers of newspapers, magazines, and other periodicals to deduct their expenditures to maintain, establish, or increase circulation in the year in which they are made. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Deductions of oil and gas exploration and development costs Federal Statute IRC Sections 611, 612, 613, 613A and 291; 263(c), 616-617, 57(a)(2), 59(e) and 1254 Description: Firms that extract oil, gas or other minerals are permitted a deduction to recover their capital investment in a mineral reserve, which depreciates due to the physical and economic depletion or exhaustion as the mineral is recovered. Firms engaged in the exploration and development of oil, gas or geothermal properties have the option of expensing certain intangible drilling and development costs. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million Special treatment for expenses related to timber production Federal Statute IRC Sections 194, 263A(c)(5) Description: This provision allows expensing of production costs of growing timber. Taxpayers are also allowed different depreciation practices for qualified reforestation expenses. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Expensing under IRC section 179 of depreciable business property Federal Statute IRC Section 179 Description: Within certain limits, a taxpayer may elect to deduct as a current expense the cost of qualifying property in the tax year when it is placed in service. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 63 54 23 (m) Denotes a value of less than $1 million Exceptions for publicly traded partnerships with qualified income derived from certain energy-related activities Federal Statute IRC Section 7704 Description: This code section allows publicly traded partnerships to be treated as a 54 | P a g e 1.2.011 1.2.012 1.2.013 1.2.014 1.2.015 corporation for the purposes of the federal income tax under most situations. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 7 7 (m) Denotes a value of less than $1 million Treatment of income from exploration and mining as qualified income for publicly traded partnerships Federal Statute IRC Section 7704 Description: This code section allows publicly traded partnerships to be treated as a corporation for the purposes of the federal income tax under most situations. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Various agricultural expensing provisions Federal Statute IRC Sections 175, 180, 1231 Description: Taxpayers in the business of farming may choose to expense costs associated with soil and water conservation, soil conditioning and the costs associated with raising dairy and breeding cattle. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million Community and regional development incentives Federal Statute IRC Sections 38(b), 39(d), 45A, 280C(a), 1391-1397D Description: Communities designated as empowerment zones and renewable communities are eligible for special development incentives. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Expensing to remove architectural and transportation barriers to the handicapped and elderly Federal Statute IRC Section 190 Description: This provision allows taxpayers to deduct up to $15,000 of expenses incurred in a single year for removing physical barriers to handicap or elderly individuals in qualified facilities or public transportation vehicles owned or leased by the taxpayer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Inventory methods and valuation, (including last-in first-out, lower of cost or market, specific identification for homogenous products) Federal Statute IRC Sections 475, 491-492 55 | P a g e 1.2.017 1.2.018 1.2.019 1.2.020 1.2.021 Description: This provision allows taxpayers to use alternative inventory systems to determine cost of goods sold. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Health Savings Accounts Federal Statute IRC Section 223 Description: This provision allows taxpayers to exclude their health savings account contributions from their gross income in determining their taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 6 7 (m) Denotes a value of less than $1 million Deduction of property taxes on real property Federal Statute IRC Section 164 Description: Taxpayers may claim an itemized deduction for property taxes paid on owner-occupied residences. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 145 152 162 (m) Denotes a value of less than $1 million Deduction of nonbusiness state and local government income taxes, sales taxes and property taxes Federal Statute IRC Section 164 Description: State and local income, sales and personal property taxes paid by individuals are deductible from adjusted gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 366 390 409 (m) Denotes a value of less than $1 million Deduction of mortgage interest on owner-occupied residences Federal Statute IRC Section 163(h) Description: A taxpayer may claim an itemized deduction for qualified residence interest which includes interest paid on a mortgage secured by a principal residence and a second residence. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 493 529 576 (m) Denotes a value of less than $1 million Deduction of charitable contributions (includes deductions for health, education, and for purposes other than health and education) Federal Statute IRC Sections 170 and 642(c) Description: Subject to certain limitations, charitable contributions may be deducted by individuals. 56 | P a g e 1.2.022 1.2.023 1.2.024 1.2.025 1.2.026 1.2.027 State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 403 417 430 Deduction of casualty and theft losses Federal Statute IRC Sections 165(c)(3), 165(e), 165(h)-165(k) Description: An individual may claim an itemized deduction for unreimbursed personal casualty or theft losses up to a specified limit. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million Deduction of overnight expenses for National Guard and Reserve members Federal Statute IRC Sections 162(p) and 62(a)(2)(E) Description: An above-the-line deduction is available for unreimbursed overnight travel, meals, and lodging expenses of National Guard and Reserve members. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Deduction of premiums for qualified mortgage insurance Federal Statute IRC Section 163(h) Description: Qualified mortgage insurance premiums paid with respect to a qualified residence can be treated as tax deductible. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 0 0 (m) Denotes a value of less than $1 million Deduction of interest on student loans Federal Statute IRC Section 221 Description: Taxpayers may deduct interest paid on qualified education loans in determining their adjusted gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 10 11 12 (m) Denotes a value of less than $1 million Deduction of higher education expenses Federal Statute IRC Section 222 Description: Taxpayers may deduct qualified tuition and related expenses for postsecondary education from their adjusted gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 0 0 (m) Denotes a value of less than $1 million Deduction of teacher classroom expenses Federal Statute IRC Section 62 57 | P a g e 1.2.028 1.2.029 1.2.030 Description: An eligible employee of a public or private elementary or secondary school may claim a deduction for certain unreimbursed expenses. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) 0 0 (m) Denotes a value of less than $1 million Deduction of health insurance premiums and long-term care insurance premiums by the self-employed Federal Statute IRC Section 161(l) Description: Generally, a self-employed individual may deduct the entire amount paid for health insurance or long-term care insurance. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 28 27 27 (m) Denotes a value of less than $1 million Deduction of medical expenses and long-term care expenses Federal Statute IRC Section 213 Description: Most medical expenses that are paid by an individual but not reimbursed by an employer or insurance company may be deducted from taxable income to the extent they exceed 7.5 percent of adjusted gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 61 65 69 (m) Denotes a value of less than $1 million Deduction of IRA contributions (includes traditional IRAs and Roth IRAs) Federal Statute Section 219 and 408 and 408A Description: Individuals participating in a traditional or Roth IRA are allowed to deduct contributions in the case of traditional IRAs and distributions in the case of Roth IRAs. Both exemptions are phased out for higher-income individuals. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 127 129 118 (m) Denotes a value of less than $1 million 58 | P a g e 1.3 Special Federal Conformity Provisions 1.3.001 1.3.002 1.3.003 1.3.004 1.3.005 1.3.006 Like-kind exchanges Federal Statute IRC Section 1031 Description: When business or investment property is exchanged for property of a like kind, no gain or loss is recognized on the exchange and therefore no tax is paid at the time of the exchange. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 23 24 24 (m) Denotes a value of less than $1 million Special rules for magazine, paperback book, and record returns Federal Statute IRC Section 458 Description: Publishers and distributors of magazines, paperbacks, and records may elect to exclude from gross income for a tax year, the income from the sale of goods that are returned after the close of the tax year. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Five-year carryback for net operating losses attributable to farming Federal Statute IRC Section 172 Description: Current law provides a five-year carryback period for losses related to farming. The normal carryback period for losses is two years. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Special rules for mining reclamation reserves Federal Statute IRC Section 468 Description: Electing taxpayers may deduct the current value equivalent of certain estimated future reclamation and closing costs for mining and solid waste disposal sites. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Cash accounting, other than agriculture Federal Statute IRC Sections 446 and 448 Description: The cash method of accounting may be used by any business taxpayer that is not a tax shelter and falls into at least one of three specified categories. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 12 12 13 (m) Denotes a value of less than $1 million Deferral of gain on non-dealer installment sales Federal Statute IRC Sections 453 and 453A(b) 59 | P a g e 1.3.007 1.3.008 1.3.009 Description: Some taxpayers are allowed to report some sales using the installment method of accounting in which the gross profit from the sale is prorated over the years during which the payments are received. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 9 7 6 (m) Denotes a value of less than $1 million Completed contract rules Federal Statute IRC Section 460 Description: Some taxpayers with construction or manufacturing contracts extending for more than one tax year are allowed to report some or all of the profit on the contracts under special accounting rules rather than the normal rules of tax accounting. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain employee stock plans) Federal Statute IRC Sections 401(a)(28), 404(a)(9), 404(k), 415(c)(6), 1042, 497(e)(7), 4978, 4979A, 422-423 Description: Employer contributions may be deducted as a business expense. In addition, some contributions are subject to less restrictive limits than contributions to other employee benefit plans. Tax on qualified employee stock purchase plans are not taxed when granted or excised. Tax is deferred until stock is sold. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Income averaging for farmers and fishermen Federal Statute IRC Section 1301 Description: Beginning with tax years after 1997, taxpayers have the option to calculate their current year income tax by averaging over a prior three-year period, all or a portion of their income from farming and/or fishing. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) 1 1 (m) Denotes a value of less than $1 million 60 | P a g e 1.4 Georgia Exemptions 1.4.001 1.4.002 1.4.003 Personal Exemption Statute 48-7-26 Year Enacted 1987 Year Effective 1987 Data Source DOR data for 2013 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 3 in Appendix Description: For tax years 2012 and after, the personal exemption is $7,400 for married filing joint, $3,700 for married filing separately, and $2,700 for all other filers. In addition, $3,000 is excluded from income for each dependent claimed on the tax return. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1,006 1,018 1,031 (m) Denotes a value of less than $1 million Retirement Income Statute 48-7-27 Year Enacted 1971 Year Effective 1971 Data Source DOR data for 2009 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 4 in Appendix Description: For tax years beginning in 2012, individuals age 65 and above may exclude a maximum of $65,000 of retirement income. This income exclusion may include a maximum of $4,000 of earned income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 851 898 942 (m) Denotes a value of less than $1 million Exclusion of federally taxable Social Security benefits Statute 48-7-27 Year Enacted 1971 Year Effective 1971 Data Source DOR data for 2013 Estimate Reliability Class A Data Reliability Class A Note Description: Social Security and tier 1 railroad retirement benefits are excluded from state taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 151 158 165 (m) Denotes a value of less than $1 million 61 | P a g e 1.4.004 1.4.005 1.4.007 1.4.008 Georgia Higher Education Savings Plan Contributions Statute 48-7-27 Year Enacted NA Year Effective Taxable years beginning on or after January 1, 2002 Data Source DOR data for 2013 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 5 in Appendix Description: An exemption from income is allowed for contributions to a qualified higher education savings plan. The exemption is limited to $2,000 per qualified plan beneficiary. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 6 7 (m) Denotes a value of less than $1 million Interest on U.S. obligations Statute 48-7-27 Year Enacted 1971 Year Effective 1971 Data Source DOR data for 2013 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 6 in Appendix Description: Interest earned on U.S. government bonds and other obligations are not included as taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 6 7 (m) Denotes a value of less than $1 million Organ donation expenses Statute 48-7-27 Year Enacted 1981 Year Effective Taxable years beginning on or after January 1, 2005 Data Source United Network for Organ Sharing, 2014 Estimate Reliability Class B Data Reliability Class B Note 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) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Aged 65/Blind deduction Statute Year Enacted Year Effective Data Source 48-7-27 1971 1971 DOR data for 2013 62 | P a g e 1.4.010 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 7 in Appendix Description: Taxpayers aged 65 or older are allowed an annual deduction from income of $1,300 per taxpayer. Taxpayers who are blind are allowed an annual deduction from income of $1,300 per taxpayer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 6 6 6 (m) Denotes a value of less than $1 million Premiums for high-deductible health plans Statute 48-7-27 Year Enacted 1981 Year Effective Taxable years beginning on or after January 1, 2008 Data Source Kaiser-Health Research and Educational Trust and America's Health Insurance Plan, Center for Policy and Research Estimate Reliability Class C Data Reliability Class A Note Description: Taxpayers are allowed to exclude 100 percent of premiums paid for certain high-deductible health plans. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 63 | P a g e 1.5 Georgia Deductions 1.5.001 Standard Deduction Statute 48-7-27 Year Enacted 1971 Year Effective 1971 Data Source DOR data for 2013 Estimate Reliability Class A Data Reliability Class A Note For distributional analysis see Table 8 in Appendix Description: Taxpayers who do not itemize expenses on their federal return are allowed a standard deduction equal to $2,300 for head of household and single filers, $1,500 for married filing separately and $3,000 in the case of joint filers. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 189 199 209 (m) Denotes a value of less than $1 million 64 | P a g e 1.6 Georgia Credits 1.6.001 1.6.002 1.6.003 1.6.004 Rural Physician Credit Statute 48-7-29 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for certain physicians practicing in rural counties. The value of the credit is equal to the lessor of $5,000 or the taxpayer's income tax liability and may be claimed for five years. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 2 (m) Denotes a value of less than $1 million Disabled person's home purchase or retrofit credit Statute 48-7-29.1 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1999 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a $500 credit for the purchase of a new single-family home containing accessibility features or for the retrofit of an existing home. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Driver Education Credit Statute 48-7-29.5 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a credit against income tax for the lesser of $150 or the cost of a qualified driver education class. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Disaster Assistance Credit Statute 48-7-29.4 Year Enacted 2000 65 | P a g e 1.6.005 1.6.006 Year Effective Taxable years beginning on or after January 1, 2000 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for individuals receiving disaster relief payments from the Georgia Emergency Management Agency or from the Federal Emergency Management Agency. The credit amount is the actual amount of the disaster relief assistance or $500, whichever is less. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Qualified Caregiving Expense Credit Statute 48-7-29.2 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1999 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is for taxpayers with expenses related to the care of a qualifying family member. The value of the credit is equal to no more than 10 percent of the total amount expended for qualifying caregiving expenses. In no event shall the credit exceed $150 or the taxpayer's income tax liability, whichever is less. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Tax credit for life insurance for Georgia National Guard and Air National Guard Statute 48-7-29.9 Year Enacted 2005 Year Effective Taxable years beginning on or after January 1, 2005 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is available for active duty members of the Georgia National Guard and Air National Guard who are on active duty for more than 90 consecutive days and who purchase qualified life insurance through the Services' Group Life Insurance program administered by the U.S. Department of Veterans Affairs. The credit amount is equal to the cost of the premiums of the life insurance policy. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 66 | P a g e 1.6.007 1.6.008 1.6.009 1.6.010 Child and Dependent Care Credit Statute 48-7-29.10 Year Enacted 2006 Year Effective Taxable years beginning on or after January 1, 2006 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit is equal to 30 percent of the federal credit claimed for qualified expenses related to the care of children and dependents. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 35 36 36 (m) Denotes a value of less than $1 million Adoption of Foster Child Credit Statute 48-7-29.15 Year Enacted 2008 Year Effective Tax years beginning on or after January 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides an annual tax credit for taxpayers adopting qualified foster children. The value of the credit is $2,000 per child annually until the child attains the age of 18 and applies to adoptions occurring in taxable years beginning on or after January 1, 2008. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million Low-Income Credit Statute 48-7A -3 Year Enacted 1991 Year Effective Taxable years beginning on or after January 1, 1992 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: This credit provides a tax credit to low-income individuals. The credit is based on the taxpayer's AGI. The maximum value of the credit is $26 per dependent. For tax years beginning on January 1, 2010 and after, the credit is nonrefundable. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 8 9 9 (m) Denotes a value of less than $1 million Credit for taxes paid to another state Statute 48-7-28 Year Enacted 1931 67 | P a g e 1.6.012 1.6.013 Year Effective 1931 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: A resident individual with income taxed by another state is allowed a credit for such tax. The maximum value of this credit is equal to the amount that would be due if the income were taxed by Georgia. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 235 254 275 (m) Denotes a value of less than $1 million Georgia Job Tax Credit Statute 48-7-40 and 48-7-40.1 Year Enacted 48-7-40: 1989; 48-7-40.1: 1993 Year Effective 48-7-40: Taxable years beginning on or after January 1, 1990; 48-7-40.1: Taxable years beginning on or after January 1, 1994 Data Source DOR data for 2015 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section and the insurance premium tax section, see 2.6.001 and 5.00200 Description: The credit provides a statewide job tax credit to any business or headquarters engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development. Retail establishments are only allowed the credit if located in one of the 40 least-developed counties of the state. Average wages must be greater than the average wage of the county in the state with the lowest average wage. To be eligible, employers must offer health insurance to all new employees. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 8 8 8 Corporate Income Tax Expenditure 60 62 62 Insurance Premium Tax Expenditure 2 2 3 State Tax Expenditure 70 71 73 (m) Denotes a value of less than $1 million; may not sum due to rounding Quality Jobs Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability Note 48-7-40.17 2009 Taxable years beginning on or after January 1, 2009 DOR data for 2015 Class A Class A The same estimate is provided in the corporate income tax section, see 2.6.002 68 | P a g e 1.6.014 1.6.016 Description: This credit is for employers creating new high-wage jobs or relocating high- wage jobs into the state. A quality job or high-wage job has 30 hours a week of regular work; is not already located in Georgia; and pays at or above 110 percent of the average wage of the county in which it is located. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) 1 Corporate Income Tax Expenditure 30 34 37 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 30 35 38 (m) Denotes a value of less than $1 million; may not sum due to rounding New Facilities Jobs Credit Statute 48-7-40.24 Year Enacted 2003 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.003 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 4,500 jobs. For business enterprises that first qualify in a taxable year beginning on or after January 1, 2009, the business enterprise must meet the job creation requirement of 1,800 eligible 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) 2015 2016 2017 Income Tax Expenditure Estimate included Corporate Income Tax Expenditure in 1.6.012 Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Manufacturer's Investment Tax Credit Statute 48-7-40.2, 48-7-40.3, and 48-7-40.4 Year Enacted 1994 Year Effective Taxable years beginning on or after January 1, 1994 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.005 69 | P a g e 1.6.017 1.6.018 Description: Taxpayer must invest a minimum of $50,000 per project per location during the tax year to receive credit. Eligible taxpayers must be in operation for the immediately preceding three years. Leased property for a period of five years or longer is eligible for the credit. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 13 14 14 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 15 15 16 (m) Denotes a value of less than $1 million; may not sum due to rounding Optional Investment Tax Credit Statute 48-7-40.7, 48-7-40.8, and 48-7-40.9 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.006 Description: An alternative investment tax credit available for investments in manufacturing or telecommunications facilities or support facilities that have been operating for the three immediately preceding years. The credit is available for investments in excess of $5 million and placed in service no earlier than January 1, 1996 for tier 1 counties. The investment threshold is $10 million for tier 2 counties and is $20 million for tier 3 and 4 counties. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 1 1 1 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Port Activity Tax Credit Statute 48-7-40.15 Year Enacted 1998 Year Effective Latest modifications apply to taxable years beginning on or after January 1, 2010 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.007 Description: For taxable years beginning before January 1, 2010, businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development that have increased shipments out of Georgia ports during the previous 12-month period by more than 10 percent over their 1997 base year port traffic, or by more 70 | P a g e 1.6.019 1.6.020 than 10 percent over 75 net tons, five containers or 10 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. For taxable years beginning on or after January 1, 2010, the increase is based on a comparison of the previous 12-month period to the second preceding 12- month period. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 6 6 6 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 6 6 6 (m) Denotes a value of less than $1 million Alternate Port Activity Tax Credit Statute 48-7-40.15A Year Enacted 2009 Year Effective 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.008 Description: Credit is allowed to any business enterprise located in a tier 2 or 3 county or in a less developed area and which qualifies and receives the Jobs Tax Credit and which 1. Consists of a distribution facility of greater than 650,000 square feet in operation in this state prior to December 31, 2008; 2. Distributes product to retail stores owned by the same legal entity or its subsidiaries as such distribution facility; and 3. Has a minimum of eight retail stores in this state in the first year of operations. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure Estimate included Corporate Income Tax Expenditure in 1.6.018 Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Film Tax Credit Statute Year Enacted Year Effective Data Source Estimate Reliability Data Reliability Note 48-7-40.26 2005 Taxable years beginning on or after January 1, 2005 DOR data for 2015 Class A Class A The same estimate is provided in the corporate income tax section, see 2.6.009. Tax credit provisions applicable to qualified interactive entertainment production companies were modified in 2015. 71 | P a g e 1.6.021 1.6.022 Description: Production companies which have at least $500,000 of qualified expenditures in a state-certified production may claim this credit. Certification must be approved through the Georgia Department of Economic Development. There are special provisions relating to the tax credits awarded to interactive entertainment companies. Under the 2015 modifications to this provision, interactive entertainment companies are eligible to claim this credit for tax years before January 1, 2019. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 148 166 187 Corporate Income Tax Expenditure 95 107 121 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 243 272 308 (m) Denotes a value of less than $1 million; may not sum due to rounding Research Tax Credit Statute 48-7-40.12 Year Enacted 1997 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.010 Description: This credit is for expenses resulting from research conducted in Georgia by businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. A tax credit is allowed provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 33 21 22 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 34 22 23 (m) Denotes a value of less than $1 million Seed-Capital Fund Credit Statute 48-7-40.27 & 40.28 Year Enacted 2008 Year Effective Applicable to investments made on or after July 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.011 Description: This provides a tax credit for certain qualified investments made on or after July 1, 2008 in a research fund, the purpose of which is to provide early- stage financing for businesses formed as a result of research conducted in Georgia's research universities. 72 | P a g e 1.6.023 1.6.025 Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) (m) (m) (m) (m) (m) 0 0 0 (m) (m) (m) Qualified Health Insurance Expense Credit Statute 48-7-29.13 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.012 Description: Employer credit for the premiums paid for a high-deductible health plan. Employers must employ 50 or fewer persons for whom the employer provides high-deductible health plans as defined by Section 223 of the Internal Revenue Code and in which such employees are enrolled. The qualified health insurance must be made available to all employees and compensated individuals of the employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The qualified health insurance premium expense must equal at least $250 annually. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Qualified Transportation Credit Statute 48-7-29.3 Year Enacted 1999 Year Effective Taxable years beginning on or after January 1, 2001 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.014 Description: A tax credit provided to employers for the cost of providing any federally qualified transportation benefit to an employee. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 73 | P a g e 1.6.026 1.6.027 1.6.028 Business Enterprise Vehicle Credit Statute 48-7-40.22 Year Enacted 2001 Year Effective Taxable years beginning on or after January 1, 2002. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.015 Description: This is a credit given to a business enterprise for the purchase of a motor vehicle that is used exclusively to provide transportation for its employees. In order to qualify, a business enterprise must certify that each vehicle carries an average daily ridership of not less than four employees for an entire taxable year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Employer's credit for providing or sponsoring child care for employees and employer's credit for purchasing child care property Statute 48-7-40.6 Year Enacted 1994 & 1999 Year Effective Credit for cost of operation: taxable years beginning on or after January 1, 1994; Credit for Cost of Qualified Child Care Property: taxable years beginning on or after January 1, 2000. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.016 Description: Employer's Credit for Providing or Sponsoring Child Care for Employees. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 3 3 4 Corporate Income Tax Expenditure 7 7 7 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 10 10 10 (m) Denotes a value of less than $1 million; may not sum due to rounding Low-Income Housing Credit Statute 48-7-29.6 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A 74 | P a g e 1.6.029 1.6.030 Note The same estimate is provided in the corporate income tax section and the insurance premium tax section, see 2.6.017 and 5.00700 Description: This is a credit against Georgia income taxes for taxpayers owning developments which receive the federal Low-Income Housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 60 64 69 Corporate Income Tax Expenditure 25 27 29 Insurance Premium Tax Expenditure 105 112 120 State Tax Expenditure 190 203 218 (m) Denotes a value of less than $1 million Historic Rehabilitation Credit Statute 48-7-29.8 Year Enacted 2002 Year Effective Taxable years beginning on or after January 1, 2004 Data Source DOR data for 2015 and Fiscal Note for H.B. 308 for 2015 Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the corporate income tax section, see 2.6.018 Description: A credit for the certified rehabilitation of a certified structure or historic home. Standards set by the Georgia Department of Natural Resources must be met. This credit was modified in 2015 to allow unused credits to be assigned or sold to other taxpayers. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 2 2 28 Corporate Income Tax Expenditure 0 0 4 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 2 2 32 (m) Denotes a value of less than $1 million Diesel Particulate Emission Reduction Technology Equipment Credit Statute 48-7-40.19 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.019 Description: This is a credit given to any person who installs diesel particulate emission reduction equipment at any truck stop, depot, or other facility. For purposes of this credit, diesel particulate emission reduction technology equipment is any equipment that provides heat, air conditioning, light, or communications for the driver's compartment of a commercial motor vehicle parked at a truck stop, depot, or other facility, the use of which results in the engine being turned off with a corresponding reduction of 75 | P a g e 1.6.031 1.6.032 particulate emissions from such vehicle's diesel engine. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 0 0 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Low- & Zero-emission Vehicle Credit & Electric Vehicle Charger Credit Statute 48-7-40.16 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.020. This credit has been repealed for all vehicle purchases or leases occurring on or after July 1, 2015. The credit for electric vehicle chargers and conversions remain applicable. Description: This is a credit for the purchase or lease of a new zero- or low-emission vehicle that is registered in the state of Georgia. The credit also applies to the conversion of a standard vehicle to a zero- or low-emission vehicle. In addition, the credit applies to the purchase of an electric vehicle charger. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 36 28 3 Corporate Income Tax Expenditure (m) (m) 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 36 28 3 (m) Denotes a value of less than $1 million Land Conservation Credit Statute 48-7-29.12 Year Enacted 2006 Year Effective Taxable years beginning on or after January 1, 2006 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.021 Description: This provides for an income tax credit for the qualified donation of real property that qualifies as conservation land pursuant to Chapter 22 of Title 36. This credit was modified in 2015 such that the aggregate value of credits awarded under this provision cannot exceed $30 million per year and no new credit applications will be accepted after December 31, 2016. 76 | P a g e 1.6.033 1.6.034 State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 24 34 15 Corporate Income Tax Expenditure 1 1 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 24 35 15 (m) Denotes a value of less than $1 million; may not sum due to rounding Clean Energy Property and Wood Residuals Credit Statute 48-7-29.14 Year Enacted 2008 Year Effective July 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.022 Description: The Georgia Clean Energy Property and Wood Residuals tax credit includes two general types of income tax credits: 1) investments in the construction, purchase or lease of clean energy property, and 2) the value of wood residuals delivered to a qualified renewable biomass facility. The clean energy property tax credits apply to solar, wind and energy efficiency projects, geothermal heat pumps, and certain biomass equipment for making electricity. The clean energy property tax credit expired on December 31, 2014. For the purposes of the Wood Residuals tax credit, wood residuals include urban wood waste, land clearing residues, and pellets, but not wood from a U.S. national forest. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 1 1 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 2 2 1 (m) Denotes a value of less than $1 million Georgia Employer GED Tax Credit (previously known as the Employer's Credit for Basic Skills Education) Statute 48-7-41 Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for H.B. 63 for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.023. The 2015 provision replaces the previous provision. The 2015 provision is capped at $1 million in aggregate credits annually. Description: Allows an employer a tax credit against their income tax liability for the employer incurred expenses associated with GED attainment of employees. 77 | P a g e 1.6.035 1.6.036 Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) (m) 1 (m) (m) (m) 0 0 0 (m) (m) 1 Employer's Credit for Approved Employee Retraining Statute 48-7-40.5 Year Enacted 1994 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.024 Description: The tax credit reimburses employers for the cost of providing retraining services to their employees. As of January 1, 2009, retraining programs shall not include any retraining on commercially, mass produced software packages for word processing, 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. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 12 13 13 Corporate Income Tax Expenditure 18 19 20 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 31 32 33 (m) Denotes a value of less than $1 million; may not sum due to rounding Qualified Education Expense Credit Statute 48-7-29.16 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.025 Description: This provides a tax credit for donations made by taxpayers to a student scholarship organization which are used for tuition and fees for a qualified school or program. 78 | P a g e 1.6.037 1.6.038 State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 34 33 33 Corporate Income Tax Expenditure 11 11 11 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 45 45 45 (m) Denotes a value of less than $1 million; may not sum due to rounding Qualified Investor Tax Credit Statute 48-7-40.30 Year Enacted 2010 Year Effective January 1, 2011; legislation modified in 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.026 Description: This credit provides a 35 percent tax credit for amounts invested in certain Georgia-headquartered small businesses. The credit was modified in 2015 and is now available for qualified investments made in years 2011- 2018. The aggregate value of credits awarded under this provision cannot exceed $5 million per year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 0 0 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Energy-efficient or water-efficient equipment credit Statute 48-7-40.29 Year Enacted 2010 Year Effective January 1 of the year following the year in which federal funds for this program are made available and received by the state Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.027 Description: This tax credit applies to taxpayers who purchase energy-efficient and water conservation equipment. The value of the credit is equal to 25 percent of the cost of the qualified equipment or $2,500, whichever is less. The credit is only available for those tax years in which federal funds are made available to the state for this purpose. 79 | P a g e 1.6.041 1.6.042 Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 0 0 0 0 0 0 0 0 0 0 0 0 Tax credit for existing business enterprises undergoing qualified business expansion Statute 48-7-40.21 Year Enacted 2001 Year Effective Latest modifications are applicable to tax years beginning on or after January 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.030 Description: This credit applies to businesses that create at least 500 new full-time jobs within a taxable year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure Estimate included Corporate Income Tax Expenditure in 1.6.013 Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Tax credit for purchase of alternative fuel heavy-duty or medium-duty vehicle Statute 48-7-29.18 Year Enacted 2014 Year Effective Taxable years beginning on or after 2015 Data Source Fiscal Note for H.B. 404 for 2012 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.031 Description: Provides a tax credit for the purchase of an alternative fuel heavy-duty vehicle not to exceed $20,000 or $12,000 in the case of an alternative fuel medium-duty vehicle. The aggregate value of the credit is limited to $2.5 million in each fiscal year beginning with fiscal year 2016 and ending with fiscal year 2017. The credit is applicable to purchases made on or after July 1, 2015 and before July 30, 2017. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 0 (m) (m) Corporate Income Tax Expenditure 0 1 1 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 0 1 2 (m) Denotes a value of less than $1 million; may not sum due to rounding 80 | P a g e 1.6.043 Bank Tax Credit Statute 48-7-29.7 Year Enacted 2000 Year Effective 2001 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the corporate income tax section, see 2.6.032 Description: Depository financial institutions are allowed a credit against their state income tax liability equal to the sum of the amount of business licenses taxes paid to local governments and any special state occupation tax paid to the state. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 9 10 10 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 10 11 11 (m) Denotes a value of less than $1 million 81 | P a g e Income tax expenditures for which an estimate is not currently available Expenditure Statute Summary 1.4.006 48-7-27 Certain military income 1.4.009 48-7-27 Certain dependent's unearned income 1.4.011 48-7-27 Salaries and wages reduced from Federal taxable income because of the Federal Jobs Tax Credit 1.4.012 48-7-27 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 1.4.013 48-7-27 Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986 1.4.014 48-7-27 Income from any fund, program or system which is exempted by federal law or treaty 1.4.015 48-7-27 Certain income in which the Sub-S election is not recognized by Georgia or another state in order to avoid double taxation 1.4.016 48-7-27 Adjustment for certain teachers retired from the Teachers Retirement System of Georgia 1.4.017 48-7-27 Amount claimed by certain employers in food and beverage establishments 1.4.018 48-7-27 Adjustment of certain payments to minority subcontractors 1.4.019 48-7-27 Adjustments to federal AGI for certain Georgia resident partners 1.4.020 48-2-100 Exemption for certain disaster relief firms 1.6.015 48-7-40.25 New Manufacturing Facilities Property Credit 1.6.039 48-7-40.10 Tax credit for water conservation facilities and qualified water conservation investment property 1.6.040 48-7-40.11 Tax credit for shift from groundwater usage 82 | P a g e 2. Corporate Income Tax The corporate income tax was first levied in Georgia in 1929. While originally levied at a rate equal to one-third of the federal corporate tax rate, the rate was changed to 4 percent in 1931. The tax has gone through several rate changes since its introduction, including in 1949 when it was temporarily increased to 7.5 percent. The 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. Corporate tax collections for FY 2014 were $885 million or 5 percent of total state tax revenues. Approximately 274,000 corporate returns were filed for CY 2014. All revenue collected from this tax is deposited into the State General Fund. The starting point for the construction of the tax base is federal taxable income of a corporation. Several adjustments are made in order to determine Georgia business income. For example, although corporations are allowed certain special depreciation deductions at the federal level, some of these deductions are not allowed at the state level. Firms taking these deductions on their federal return must add these deductions back to their tax base when determining their state taxable income. In addition, firms operating in multiple states must apportion their corporate income to each of the states in which they have a legal obligation to pay the tax. Since 2008, firms with multistate income determine the portion of their total income associated with Georgia by computing their total Georgia receipts relative to their total receipts. Prior to 2008, Georgia firms were required to use a three-factor apportionment formula. It is important to keep in mind that tax expenditure estimates may differ from revenue estimates presented in fiscal notes. Estimates included in fiscal notes incorporate behavioral effects that are not considered when estimating tax expenditure provisions. Whereas the purpose of a tax expenditure estimate is to convey the cost that would be necessary if the item were offered as a direct budgetary expenditure instead of a reduction in the tax liability. A second caveat concerns the estimates associated with the state corporate credit provisions. Forecasting the value of the revenue loss stemming from the use of these credits is problematic because of the presence of extensive carry forwards in the case of some credits. Because of past credit carry forwards, firms may claim credits on current or future year tax returns that were created in prior years. Therefore, the estimates provided in this report should be interpreted as the expected revenue loss stemming from the use of currently created or previously created credits and not an estimate of the value of credits created in a given year. 83 | P a g e 2.1 Federal Corporate Exclusions 2.1.001 2.1.002 2.1.003 2.1.004 2.1.005 2.1.006 Exemption from imputed interest rules Federal Statute IRC Sections 163(e), 483, 1274, and 1274(A) Description: Debt instruments for amounts not exceeding an inflation adjusted maximum, given in exchange for real property, may not have imputed to them an interest rate greater than 9 percent. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of interest on state and local government private activity bonds Federal Statute IRC Section 103,141,142 and 146 Description: Interest earned on qualified private activity bonds is tax exempt. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of contributions in aid of construction for water and sewer utilities Federal Statute IRC Section 118(c) Description: Qualifying contributions in aid of construction received by regulated water and sewage disposal utilities are not included in the utility's gross income under certain conditions. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of earnings of certain environmental settlement funds Federal Statute IRC Section 468B Description: Under certain conditions environmental settlement funds are exempt from tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of certain agricultural cost-sharing payments Federal Statute IRC Section 126 Description: Grants made for the purpose of conserving soil and water resources or protecting the environment are excluded from the recipient's gross income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of gain or loss on sale or exchange for brownfield property Federal Statute IRC Section 512 and 514 Description: Qualifying brownfield property that is acquired from an unrelated party, subject to remediation, and sold to another unrelated party is exempt from 84 | P a g e 2.1.008 2.1.009 2.1.010 unrelated business income tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of disaster mitigation payments Federal Statute IRC Section 139 Description: Payments made for disaster mitigation under the Robert T. Stafford Disaster Relief and Emergency Insurance Act or the National Flood Insurance Act is excluded from income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exclusion of interest on public purpose state and local government bonds Federal Statute IRC Sections 103, 141 and 146 Description: Interest income of qualifying governmental bonds is excluded from taxable income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Various foreign provisions including inventory property sales source rule exception, interest expense allocation, deferral of active income of controlled foreign corporations, deferral of active financing income Federal Statute IRC Sections 861-863, 865, 953-954, 864 Description: These provisions provide certain exceptions to the general treatment of foreign sourced income. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 273 300 317 (m) Denotes a value of less than $1 million 85 | P a g e 2.2 Federal Corporate Deductions 2.2.001 2.2.002 2.2.003 2.2.004 2.2.005 Accelerated depreciation (MACRS) Federal Statute IRC Sections 167 and 168 Description: Under the Modified Accelerated Cost Recovery System (MACRS), the cost of tangible depreciation property of certain energy property is allowed a shorter depreciation period. Taxpayers are allowed to depreciate the costs of new rental housing and certain other buildings and equipment on an accelerated schedule. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 5 5 (m) Denotes a value of less than $1 million Deduction of expenditures on energy-efficient commercial building property Federal Statute IRC Section 179D Description: This provision provides a formula-based tax deduction for all or part of the cost of energy-efficient commercial building property placed in service after December 31, 2005 and before January 1, 2014. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Deduction of exploration and development costs of nonfuel minerals Federal Statute IRC Sections 263, 291, 616-617,56,1254 Description: Firms engaged in mining are permitted to expense certain exploration and development costs. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Amortization of business start-up costs Federal Statute IRC Section 195 Description: This provision allows a business taxpayer to deduct up to $10,000 in qualified start-up expenditures. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Expensing of research and development costs in lieu of the R&D tax credit Federal Statute IRC Section 174 and 59e Description: This provision allows a business taxpayer to deduct certain research expenditures that are paid or incurred in connection with the taxpayer's trade or business. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 8 8 (m) Denotes a value of less than $1 million 86 | P a g e 2.2.006 2.2.007 2.2.008 2.2.009 2.2.011 Expensing of magazine circulation expenditures Federal Statute IRC Section 173 Description: In general, current federal tax law allows publishers of newspapers, magazines, and other periodicals to deduct their expenditures to maintain, establish, or increase circulation in the year in which they are made. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Deductions of oil and gas exploration and development costs Federal Statute IRC Sections 611, 612, 613, 613A and 291; 263(c), 616-617, 57(a)(2), 59(e) and 1254 Description: Firms that extract oil, gas, or other minerals are permitted a deduction to recover their capital investment in a mineral reserve, which depreciates due to the physical and economic depletion or exhaustion as the mineral is recovered. Firms engaged in the exploration and development of oil, gas or geothermal properties have the option of expensing certain intangible drilling and development costs. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million Special treatment of expenses related to timber production Federal Statute IRC Sections 194, 263A(c)(5) Description: This provision allows expensing of production costs of growing timber. Taxpayers are also allowed different depreciation practices for qualified reforestation expenses. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 4 (m) Denotes a value of less than $1 million Deduction of charitable contributions (includes deductions for health, education, and for purposes other than health and education) Federal Statute IRC Sections 170 and 642(c) Description: Subject to certain limitations, charitable contributions may be deducted by taxpayers. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 14 15 15 (m) Denotes a value of less than $1 million Expensing under IRC section 179 of depreciable business property Federal Statute IRC Section 179 Description: Within certain limits, a taxpayer may elect to deduct, as a current expense, the cost of qualifying property in the tax year when it is placed in service. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 (m) (m) (m) Denotes a value of less than $1 million 87 | P a g e 2.2.012 2.2.014 2.2.015 2.2.016 2.2.017 Amortization of air pollution control facilities Federal Statute IRC Section 169(d)(5) Description: This provision allows plants placed in service after January 1, 1976 the option of amortizing investments in pollution control equipment for coal- fired electric generation plants. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 1 (m) Denotes a value of less than $1 million Various agricultural expensing provisions Federal Statute IRC Section 175, 180, 1231 Description: Taxpayers in the business of farming may choose to expense costs associated with soil and water conservation, soil conditioning, and the costs associated with raising dairy and breeding cattle. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Community and regional development incentives Federal Statute IRC Sections 38(b), 39(d), 45A, 280C(a), 1391-1397D and 1400F,H,I and J Description: Communities designated as empowerment zones and renewable communities are eligible for special development incentives. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Expensing to remove architectural and transportation barriers to the handicapped and elderly Federal Statute IRC Section 190 Description: This provision allows taxpayers to deduct up to $15,000 of expenses incurred in a single year for removing physical barriers to handicap or elderly individuals in qualified facilities or public transportation vehicles owned or leased by the taxpayer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Inventory methods and valuation Federal Statute IRC Section 475, 491-492 Description: This provision allows taxpayers to use alternative inventory systems to determine the cost of goods sold. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 5 5 (m) Denotes a value of less than $1 million 88 | P a g e 2.2.018 Limits on deductible compensation and disallowance of deduction for excess parachute payments Federal Statute IRC Sections 280G, 4999, and 162(m) Description: Excess parachute payments are not allowable deductions against the corporate income tax. In the case of publicly held corporations, only executive compensation of $1 million or less is deductible against the corporate income tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure -3 -3 -3 (m) Denotes a value of less than $1 million 89 | P a g e 2.3 Special Federal Corporate Conformity Provisions 2.3.001 2.3.002 2.3.003 2.3.004 2.3.005 2.3.006 Like-kind exchanges Federal Statute IRC Section 1031 Description: When business or investment property is exchanged for property of a like kind no gain or loss is recognized on the exchange and therefore no tax is paid at the time of the exchange. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 22 21 22 (m) Denotes a value of less than $1 million Special rules for magazine, paperback book, and record returns Federal Statute IRC Section 458 Description: Publishers and distributors of magazines, paperbacks, and records may elect to exclude from gross income for a tax year, the income from the sale of goods that are returned after the close of the tax year. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Five-year carryback for net operating losses attributable to farming Federal Statute IRC Section 172 Description: Current law provides a five-year carryback period for losses related to farming. The normal carryback period for losses is two years. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Special rules for mining reclamation reserves Federal Statute IRC Section 468 Description: Electing taxpayers may deduct the current value equivalent of certain estimated future reclamation and closing costs for mining and solid waste disposal sites. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Cash accounting, other than agriculture Federal Statute IRC Sections 446 and 448 Description: The cash method of accounting may be used by any business taxpayer that is not a tax shelter and falls into at least one of three specified categories. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Deferral of gain on non-dealer installment sales Federal Statute IRC Sections 453 and 453A(b) 90 | P a g e 2.3.007 2.3.008 2.3.009 Description: Some taxpayers are allowed to report some sales using the installment method of accounting in which the gross profit from the sale is prorated over the years during which the payments are received. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 14 13 13 (m) Denotes a value of less than $1 million Completed contract rules Federal Statute IRC Section 460 Description: Some taxpayers with construction or manufacturing contracts extending for more than one tax year are allowed to report some or all of the profit on the contracts under special accounting rules rather than the normal rules of tax accounting. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million Special treatment of employee stock ownership plans (ESOPs) (includes deferral of tax on certain employee stock plans) Federal Statute IRC Sections 401(a)(28), 404(a)(9), 404(k), 415(c)(6),1042,497(e)(7), 4978,4979A, 422-423 Description: ESOPs are provided special tax treatment. Employer contributions may be deducted as a business expense. In addition, some contributions are subject to less restrictive limits than contributions to other employee benefit plans. Tax on qualified employee stock purchase plans are not taxed when granted or excised. Tax is deferred until stock is sold. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Deferral of capital construction costs of shipping companies Federal Statute IRC Section 7518 Description: U.S. operators of vessels in foreign, or domestic commerce of the U.S., or in U.S. fisheries, may establish a capital construction fund into which they may make certain tax deductible deposits. In addition, the earnings on the deposits are tax deferred. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 91 | P a g e 2.4 Corporate Apportionment Discussed below are three issues relating to corporate apportionment that can be considered tax expenditures because they are deviations from the traditional formula of corporate apportionment and result in a benefit to some taxpayers. No estimate of the value of these expenditures is available at this time. 2.4.001 Single-Factor Apportionment Corporate income earned in Georgia is apportioned using a single-factor apportionment formula. With single-factor apportionment, firms determine state tax liability based solely on the ratio of Georgia receipts to total receipts. The traditional apportionment formula involves the use of three Georgia-total ratios: property, payroll, and receipts. With the three-factor formula, the firm applies a weight of 33.33 percent to each ratio. The single-factor formula benefits firms that have manufacturing presence in one state but significant sales outside of the state. Firms that are located and operate in a single state are not affected by the apportionment formula. 2.4.002 Throwback Rule Under a throwback rule, out-of-state sales from a corporation are taxed by the state of origin if the corporation has no nexus in the destination state. At least 25 states have a throwback rule. Georgia, North Carolina, Florida, Tennessee, South Carolina, and Virginia do not, but Alabama does. An alternative rule is the "throwout rule", which eliminates sales to non-nexus states from both the numerator and denominator of the apportionment formula of a corporation. Georgia does not have a throwout rule. 2.4.003 Corporate Receipts Sourcing Georgia is among 16 states that apportions multistate corporate income based only on gross receipts, (i.e. a 100-percent sales factor). This creates a destination-based corporate income tax system. Under this approach, corporations pay taxes based on the state in which their products are sold, not where production takes place. This rule applies to the sale of tangible property. When considering apportionment for services provided across state lines, Georgia employs a market-based sourcing rule. At the present, there is no consensus among the states on how to define a "market" for the purpose of implementing this rule but, in general, it means that services will be taxed based on the state in which the customer receives the benefit. The rule is meant to apply a consistent destination-based treatment to services when compared to tangible goods. 92 | P a g e Corporate apportionment expenditures for which an estimate is not currently available Expenditure Statute Summary 2.4.001 N/A Single-factor Apportionment 2.4.002 N/A Throwback Rule 2.4.003 N/A Corporate Receipts Sourcing 93 | P a g e 2.5 Georgia Deductions Corporate income tax expenditures for which an estimate is not currently available Expenditure Statute Summary 2.5.001 48-7-21 Interest on obligations of United States 2.5.002 48-7-21 Exception to intangible expenses and related interest cost 2.5.003 48-2-100 Exemption for certain disaster relief firms 94 | P a g e 2.6 Georgia Credits 2.6.001 2.6.002 Georgia Job Tax Credit Statute 48-7-40 and 48-7-40.1 Year Enacted 48-7-40: 1989; 48-7-40.1: 1993 Year Effective 48-7-40: Taxable years beginning on or after January 1, 1990; 48-7-40.1: Taxable years beginning on or after January 1, 1994. Data Source DOR data for 2015 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Estimate includes the tax credit for expanding business (2.6.030) and the new facilities job credit (2.6.003). The same estimate is provided in the income tax section and the insurance premium tax section, see 1.6.012 and 5.00200 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) 2015 2016 2017 Income Tax Expenditure 8 8 8 Corporate Income Tax Expenditure 60 62 62 Insurance Premium Tax Expenditure 2 2 3 State Tax Expenditure 70 71 73 (m) Denotes a value of less than $1 million; may not sum due to rounding Quality Jobs Tax Credit Statute 48-7-40.17 Year Enacted 2009 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.013. Description: This credit is for employers creating new high-wage jobs or relocating high- wage jobs into the state. A quality job or high-wage job has 30 hours a week of regular work; a job that is not already located in Georgia; and pays at or above 110 percent of the average wage of the county in which it is located. 95 | P a g e 2.6.003 2.6.005 State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) 1 Corporate Income Tax Expenditure 30 34 37 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 30 35 38 (m) Denotes a value of less than $1 million; may not sum due to rounding New Facilities Jobs Credit Statute 48-7-40.24 Year Enacted 2003 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.014 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 4,500 jobs. For business enterprises that first qualify in a taxable year beginning on or after January 1, 2009, the business enterprise must meet the job creation requirement of 1,800 eligible 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) 2015 2016 2017 Income Tax Expenditure Estimate included Corporate Income Tax Expenditure in 2.6.001 Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Manufacturer's Investment Tax Credit Statute 48-7-40.2, 48-7-40.3, and 48-7-40.4 Year Enacted 1994 Year Effective Taxable years beginning on or after January 1, 1994 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.016 Description: Taxpayer must invest a minimum of $50,000 per project per location during the tax year to receive credit. Eligible taxpayers must be in operation for the immediately preceding three years. Leased property for a period of five years or longer is eligible for the credit. 96 | P a g e 2.6.006 2.6.007 State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 13 14 14 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 15 15 16 (m) Denotes a value of less than $1 million; may not sum due to rounding Optional Investment Tax Credit Statute 48-7-40.7, 48-7-40.8, and 48-7-40.9 Year Enacted 1995 Year Effective Taxable years beginning on or after January 1, 1996. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.017 Description: An alternative investment tax credit available for investments in manufacturing or telecommunications facilities or support facilities that have been operating for the three immediately preceding years. The credit is available for investments in excess of $5 million and placed in service no earlier than January 1, 1996 for tier 1 counties. The investment threshold is $10 million for tier 2 counties and is $20 million for tier 3 and 4 counties. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 1 1 1 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Port Activity Tax Credit Statute 48-7-40.15 Year Enacted 1998 Year Effective Latest modifications apply to taxable years beginning on or after January 1, 2010 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Estimate combined with 2.6.008. The same estimate is provided in the income tax section, see 1.6.018. Description: For taxable years beginning before January 1, 2010, businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development that have increased shipments out of Georgia ports during the previous 12-month period by more than 10 percent over their 1997 base year port traffic, or by more than 10 percent over 75 net tons, five containers or 10 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. For taxable years beginning on or after January 1, 2010, the increase is based on a 97 | P a g e 2.6.008 2.6.009 comparison of the previous 12-month period to the second preceding 12- month period. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 6 6 6 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 6 6 6 (m) Denotes a value of less than $1 million Alternative Port Activity Tax Credit Statute 48-7-40.15A Year Enacted 2009 Year Effective 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Estimate combined with 2.6.007. The same estimate is provided in the income tax section, see 1.6.019. Description: Credit is allowed to any business enterprise located in a tier 2 or 3 county or in a less developed area and which qualifies and receives the Jobs Tax Credit and which 1. Consists of a distribution facility of greater than 650,000 square feet in operation in this state prior to December 31, 2008; 2. Distributes product to retail stores owned by the same legal entity or its subsidiaries as such distribution facility; and 3. Has a minimum of eight retail stores in this state in the first year of operations. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure Estimate included Corporate Income Tax Expenditure in 2.6.007 Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Film Tax Credit Statute 48-7-40.26 Year Enacted 2005 Year Effective Taxable years beginning on or after January 1, 2005 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.020. Tax credit provisions applicable to qualified interactive entertainment production companies were modified in 2015. Description: Production companies which have at least $500,000 of qualified expenditures in a state-certified production may claim this credit. Certification must be approved through the Georgia Department of Economic Development. There are special provisions relating to the tax 98 | P a g e 2.6.010 2.6.011 credits awarded to interactive entertainment companies. Under the 2015 modifications to this provision, interactive entertainment companies are eligible to claim this credit for tax years before January 1, 2019. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 148 166 187 Corporate Income Tax Expenditure 95 107 121 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 243 272 308 (m) Denotes a value of less than $1 million; may not sum due to rounding Research Tax Credit Statute 48-7-40.12 Year Enacted 1997 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.021 Description: This credit is for expenses resulting from research conducted in Georgia by businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. A tax credit is allowed provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 33 21 22 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 34 22 23 (m) Denotes a value of less than $1 million Seed-Capital Fund Credit Statute 48-7-40.27 & 40.28 Year Enacted 2008 Year Effective Applicable to investments made on or after July 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.022 Description: This provides a tax credit for certain qualified investments made on or after July 1, 2008 in a research fund, the purpose of which is to provide early- stage financing for businesses formed as a result of research conducted in Georgia's research universities. 99 | P a g e 2.6.012 2.6.014 Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) (m) (m) (m) (m) (m) 0 0 0 (m) (m) (m) Qualified Health Insurance Expense Credit Statute 48-7-29.13 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.023 Description: Employer credit for the premiums paid for a high-deductible health plan. Employers must employ 50 or fewer persons for whom the employer provides high-deductible health plans as defined by Section 223 of the Internal Revenue Code and in which such employees are enrolled. The qualified health insurance must be made available to all employees and compensated individuals of the employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The qualified health insurance premium expense must equal at least $250 annually. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Qualified Transportation Credit Statute 48-7-29.3 Year Enacted 1999 Year Effective Taxable years beginning on or after January 1, 2001 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.025 Description: A tax credit provided to employers for the cost of providing any federally qualified transportation benefit to an employee. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 100 | P a g e 2.6.015 2.6.016 2.6.017 Business Enterprise Vehicle Credit Statute 48-7-40.22 Year Enacted 2001 Year Effective Taxable years beginning on or after January 1, 2002. Data Source DOR data for 2015 Estimate Reliability Class C Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.026 Description: This is a credit given to a business enterprise for the purchase of a motor vehicle that is used exclusively to provide transportation for its employees. In order to qualify, a business enterprise must certify that each vehicle carries an average daily ridership of not less than four employees for an entire taxable year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure (m) (m) (m) Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Employer's Credit for providing or sponsoring child care for employees and employer's credit for purchasing child care property Statute 48-7-40.6 Year Enacted 1994 & 1999 Year Effective Credit for cost of operation: taxable years beginning on or after January 1, 1994; Credit for Cost of Qualified Child Care Property: taxable years beginning on or after January 1, 2000. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.027 Description: Tax credit for expenses related to an employer who purchases qualified child care property; and a tax credit for employers who provide or sponsor child care for employees. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 3 3 4 Corporate Income Tax Expenditure 7 7 7 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 10 10 10 (m) Denotes a value of less than $1 million; may not sum due to rounding Low-Income Housing Credit Statute 48-7-29.6 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data for 2015 101 | P a g e 2.6.018 2.6.019 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section and the insurance premium tax section, see 1.6.028 and 5.00700 Description: This is a credit against Georgia income taxes for taxpayers owning developments which receive the federal Low-Income Housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 60 64 69 Corporate Income Tax Expenditure 25 27 29 Insurance Premium Tax Expenditure 105 112 120 State Tax Expenditure 190 203 218 (m) Denotes a value of less than $1 million Historic Rehabilitation Credit Statute 48-7-29.8 Year Enacted 2002 Year Effective Taxable years beginning on or after January 1, 2004 Data Source DOR data for 2015 and Fiscal Note for H.B. 308 for 2015 Estimate Reliability Class B Data Reliability Class B Note The same estimate is provided in the income tax section, see 1.6.029. Description: A credit for the certified rehabilitation of a certified structure or historic home. Standards set by the Georgia Department of Natural Resources must be met. This credit was modified in 2015 to allow unused credits to be assigned or sold to other taxpayers. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 2 2 28 Corporate Income Tax Expenditure 0 0 4 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 2 2 32 (m) Denotes a value of less than $1 million Diesel Particulate Emission Reduction Technology Equipment Credit Statute 48-7-40.19 Year Enacted 2000 Year Effective Taxable years beginning on or after January 1, 2001. Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.030 Description: This is a credit given to any person who installs diesel particulate emission reduction equipment at any truck stop, depot, or other facility. For purposes of this credit, diesel particulate emission reduction technology equipment is any equipment that provides for heat, air conditioning, light, or communications for the driver's compartment of a commercial motor vehicle parked at a truck stop, depot, or other facility, the use of which 102 | P a g e 2.6.020 2.6.021 results in the engine being turned off with a corresponding reduction of particulate emissions from such vehicle's diesel engine. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 0 0 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Low- & Zero-emission Vehicle Credit & Electric Vehicle Charger Credit Statute 48-7-40.16 Year Enacted 1998 Year Effective Taxable years beginning on or after January 1, 1998 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.031. This credit has been repealed for all vehicle purchases or leases occurring on or after July 1, 2015. Description: This is a credit for the purchase or lease of a new zero- or low-emission vehicle that is registered in the state of Georgia. The credit also applies to the conversion of a standard vehicle to a zero- or low-emission vehicle. In addition, the credit applies to the purchase of an electric vehicle charger. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 36 28 3 Corporate Income Tax Expenditure (m) (m) 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 36 28 3 (m) Denotes a value of less than $1 million Land Conservation Credit Statute 48-7-29.12 Year Enacted 2006 Year Effective Taxable years beginning on or after January 1, 2006 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.032 Description: This is an income tax credit for the qualified donation of real property that qualifies as conservation land pursuant to Chapter 22 of Title 36. This credit was modified in 2015 such that the aggregate value of credits awarded under this provision cannot exceed $30 million per year and no new credit applications will be accepted after December 31, 2016. 103 | P a g e 2.6.022 2.6.023 State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 24 34 15 Corporate Income Tax Expenditure 1 1 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 24 35 15 (m) Denotes a value of less than $1 million; may not sum due to rounding Clean Energy Property & Wood Residuals Credit Statute 48-7-29.14 Year Enacted 2008 Year Effective July 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.033 Description: The Georgia Clean Energy Property and Wood Residuals tax credit includes two general types of income tax credits: 1) investments in the construction, purchase or lease of clean energy property, and 2) the value of wood residuals delivered to a qualified renewable biomass facility. The clean energy property tax credits apply to solar, wind and energy efficiency projects, geothermal heat pumps, and certain biomass equipment for making electricity. The clean property tax credit expired on December 31, 2014. For the purposes of the wood residuals tax credit, wood residuals include urban wood waste, land clearing residues, and pellets, but not wood from a U.S. national forest. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 1 1 1 Corporate Income Tax Expenditure 1 1 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 2 2 1 (m) Denotes a value of less than $1 million Georgia Employer GED Tax Credit (previously known as the Employer's Credit for Basic Skills Education) Statute 48-7-41 Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for H.B. 63 for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.034. The 2015 provision replaces the previous provision. The 2015 provision is capped at $1 million in aggregate credits annually. Description: Allows an employer a tax credit against their income tax liability for the employer incurred expenses associated with GED attainment of employees. 104 | P a g e 2.6.024 2.6.025 Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) (m) 1 (m) (m) (m) 0 0 0 (m) (m) 1 Employer's Credit for Approved Employee Retraining Statute 48-7-40.5 Year Enacted 1994 Year Effective Latest modifications are effective for taxable years beginning on or after January 1, 2009 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.035 Description: The tax credit reimburses employers for the cost of providing retraining services to their employees. As of January 1, 2009, retraining programs shall not include any retraining on commercially mass-produced software packages for word processing, data base management, presentations, spreadsheets, e-mail, personal information management, or computer operating systems except a retraining tax credit shall be allowable for those providing support or training on such software. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 12 13 13 Corporate Income Tax Expenditure 18 19 20 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 31 32 33 (m) Denotes a value of less than $1 million; may not sum due to rounding Qualified Education Expense Credit Statute 48-7-29.16 Year Enacted 2008 Year Effective Taxable years beginning on or after January 1, 2008 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.036 Description: This provides a tax credit for donations made by taxpayers to a student scholarship organization which are used for tuition and fees for a qualified school or program. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 34 33 33 Corporate Income Tax Expenditure 11 11 11 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 45 45 45 (m) Denotes a value of less than $1 million; may not sum due to rounding 105 | P a g e 2.6.026 2.6.027 2.6.030 Qualified Investor's Tax Credit Statute 48-7-40.30 Year Enacted 2010 Year Effective January 1, 2011; legislation modified in 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.037 Description: This credit provides a 35 percent tax credit for amounts invested in certain Georgia headquartered small businesses. The credit was modified in 2015 and is now available for qualified investments made in years 2011- 2018. The aggregate value of credits awarded under this provision cannot exceed $5 million per year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure (m) (m) (m) Corporate Income Tax Expenditure 0 0 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Energy-Efficient or Water-Efficient Equipment Credit Statute 48-7-40.29 Year Enacted 2010 Year Effective January 1 of the year following the year in which federal funds for this program are made available and received by the state Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.038 Description: This tax credit applies to taxpayers who purchase energy-efficient and water-conservation equipment. The value of the credit is equal to 25 percent of the cost of the qualified equipment or $2,500, whichever is less. The credit is only available for those tax years in which federal funds are made available to the state for this purpose. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 0 0 0 Corporate Income Tax Expenditure 0 0 0 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million Tax credit for existing business enterprises undergoing qualified business expansion Statute 48-7-40.21 Year Enacted 2001 Year Effective Latest modifications are applicable to tax years beginning on or after January 1, 2008 106 | P a g e 2.6.031 2.6.032 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.041 Description: This credit applies to businesses that create at least 500 new full-time jobs within a taxable year. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure Estimate included in Provision 2.6.002. Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million Tax credit for purchases of alternative fuel heavy-duty or medium-duty vehicle Statute 48-7-29.18 Year Enacted 2014 Year Effective Taxable year beginning on or after 2015 Data Source Fiscal Note for H.B. 404 for 2012 Estimate Reliability Class B Data Reliability Class A Note The same estimate is provided in the individual income tax section, see 1.6.042 Description: Provides a tax credit for the purchase of an alternative fuel heavy-duty vehicle not to exceed $20,000 or $12,000 in the case of an alternative fuel medium-duty vehicle. The aggregate value of the credit is limited to $2.5 million in each fiscal year beginning with fiscal year 2016 and ending with fiscal year 2017. The credit is applicable to purchases made on or after July 1, 2015 and before July 30, 2017. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 0 (m) (m) Corporate Income Tax Expenditure 0 1 1 Insurance Premium Tax Expenditure 0 0 0 State Tax Expenditure 0 1 2 (m) Denotes a value of less than $1 million; may not sum due to rounding Bank Tax Credit Statute 48-7-29.7 Year Enacted 2000 Year Effective 2001 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the income tax section, see 1.6.043 Description: Depository financial institutions are allowed a credit against their state income tax liability equal to the sum of the amount of business licenses taxes paid to local governments and any special state occupation tax paid to the state. 107 | P a g e Income Tax Expenditure Corporate Income Tax Expenditure Insurance Premium Tax Expenditure State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 1 1 1 9 10 10 0 0 0 10 11 11 108 | P a g e Corporate income tax credits for which an estimate is not currently available Expenditure 2.6.004 2.6.028 2.6.029 Statute 48-7-40.25 48-7-40.10 48-7-40.11 Summary New Manufacturing Facilities Property Credit Tax credit for water conservation facilities and qualified water conservation investment property Tax credit for shift from groundwater usage 109 | P a g e 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 totaled $40 million in FY 2014. All revenues from this tax are deposited into the State General Fund. 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. Corporate net worth tax expenditures for which an estimate is not currently available Expenditure Statute Summary 3.001 48-13-72 Exemption for nonprofit corporations 3.002 48-13-72 Exemptions from the Net Worth Tax 110 | P a g e 4. Sales and Use Tax The sales and use tax was first enacted in Georgia in 1951 at a rate of 3 percent. The rate was increased to its current rate of 4 percent in 1989. In FY 2014 the state sales and use tax generated $5.1 billion and accounted for approximately 29 percent of state tax revenues. All proceeds from the state sales and use tax net of the vendor commission are deposited into the State General Fund. The sales tax base consists of retail sales, leases, rentals, use or consumption of tangible personal property. In addition to the state sales tax, local governments are authorized to impose 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 another 1 percent sales tax to cover expenses related to sewer repairs and two counties levy a Homestead Option Sales Tax (HOST). Lastly, 46 counties implemented a 1 percent Transportation Sales Tax (TSPLOST) beginning January 1, 2013. In general, the local tax base is consistent with the state sales tax base; the major exception being food for home consumption which is included in the local sales tax base, but not in the state base. The sales tax is remitted to the Georgia DOR by the retailer. The use tax is remitted by the consumer in cases where the retailer does not collect and remit sales tax. For purposes of this report, the base of taxation for the sales and use tax 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, all or most services are also excluded from the state and local tax base. This report provides estimates of some services that are indirectly exempt from the sales tax. Lastly, this report identifies each sales tax expenditure used as a business input. This designation allows the reader to distinguish between tax expenditures that are provided for reasons of reducing economic distortions and those provided on the basis of more societal reasons, while still providing a comprehensive list of all statutory exemptions. 4.00400 Sales of transportation furnished by a county or municipal public transit system or public transit authorities Statute 48-8-3(4) Year Enacted 1968 Year Effective 1968 Data Source National Transit Database 111 | P a g e Estimate Reliability Class B Data Reliability Class A Note Estimate Combined with 4.00500 Description: Sales by counties and municipalities arising out of their operation of any public transit facility and sales by public transit authorities or charges by counties, municipalities, or public transit authorities for the transportation of passengers upon their conveyances. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 9 9 10 Local Tax Expenditure 6 6 7 (m) Denotes a value of less than $1 million 4.00500 Sales of transportation furnished by an approved and authorized urban transit system Statute 48-8-3(5) Year Enacted 1970 Year Effective 1970 Data Source National Transit Database Estimate Reliability Class A Data Reliability Class A Note Estimate Combined With 4.00400 Description: Fares and charges, except charges for charter or sightseeing service, collected by an urban transit system for the transportation of passengers. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure Estimate Combined Local Tax Expenditure with 4.00400 (m) Denotes a value of less than $1 million 4.00600 Sales to any Hospital Authority created by Georgia law Statute 48-8-3(6) Year Enacted 1976 Year Effective 1976 Data Source Georgia Office of Planning and Budget and IRS Form 990 Data Estimate Reliability Class B Data Reliability Class B Note Estimate Combined with 4.00700 Description: Sales to any hospital authority created by Article of Chapter 7 of Title 31. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure Estimate Combined Local Tax Expenditure with 4.00700 (m) Denotes a value of less than $1 million 4.00610 Sales to any Housing Authority created by Georgia law Statute 48-8-3(6.1) Year Enacted 1999 Year Effective 1999 Data Source Georgia Department of Community Affairs and the 112 | P a g e American Community Survey Estimate Reliability Class C Data Reliability Class A Note Description: Sales to any housing authority created by Article 1 of Chapter 3 of Title 8. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 2 (m) Denotes a value of less than $1 million 4.00620 Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and related facilities Statute 48-8-3(6.2) Year Enacted 2002 Year Effective 2002 Data Source Georgia Department of Community Affairs Estimate Reliability Class B Data Reliability Class B Note Description: Sales to local government authorities created on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and related facilities. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.00630 Sales to any agricultural commission created by the Department of Agriculture Statute 48-8-3(6.3) Year Enacted 2002 Year Effective 2002 Data Source Georgia Department of Agriculture and the Georgia Office of Planning and Budget Estimate Reliability Class C Data Reliability Class C Note Description: Sales to any agricultural commission created by the Department of Agriculture. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.00700 Sales of tangible personal property and services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function Statute 48-8-3(7) Year Enacted 1971 Year Effective 1971 113 | P a g e Data Source DOR data for 2009 and IRS Form 990 data Estimate Reliability Class B Data Reliability Class B Note Estimate Combined with 4.00600 Description: Sales of tangible personal property and services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 93 97 101 Local Tax Expenditure 70 73 76 (m) Denotes a value of less than $1 million 4.00705 Sales of tangible personal property to a non-profit health center established and receiving funds pursuant to the U.S. Public Health Service Act Statute 48-8-3(7.05) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 426/2015 LC 34 4527 Estimate Reliability Class C Data Reliability Class B Note This exemption was eliminated in 2010 and reinstated in 2015. This provision is scheduled to expire on June 30, 2018. Description: Sales of tangible personal property to a non-profit health center established and receiving funds pursuant to the U.S. Public Health Service Act. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure (m) (m) 1 (m) Denotes a value of less than $1 million 4.00710 Sales of tangible personal property and services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities Statute 48-8-3(7.1) Year Enacted 2001 Year Effective 2002 Data Source U.S. Economic Census and American Community Survey Estimate Reliability Class C Data Reliability Class A Note Description: Sales of tangible personal property and services to a nonprofit organization, the primary function of which is the provision of services to persons with intellectual disabilities, when such organization is a tax exempt organization under the Internal Revenue Code and obtains an exemption determination letter from the State Revenue Commissioner. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 114 | P a g e 4.00720 Sales to Georgia Society of the Daughters of the American Revolution Statute 48-8-3(7.2) Year Enacted 2002 Year Effective 2002 Data Source IRS 990 Form Data Estimate Reliability Class C Data Reliability Class C Note Description: Sales of tangible personal property or services to any chapter of the Georgia State Society of the Daughters of the American Revolution which is tax exempt under IRS Code Section 501(c)(3) and obtains an exemption determination letter from the State Revenue Commissioner. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.00730 Sales of tangible property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level Statute 48-8-3(7.3) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 426/2015 LC 34 4527 Estimate Reliability Class C Data Reliability Class C Note This exemption was eliminated in 2010 and reinstated in 2015. This provision is scheduled to expire on June 30, 2018. Description: Sales of tangible personal property and services to a nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) 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 48-8-3(8) Year Enacted 1963 Year Effective 1963 Data Source University System of Georgia Annual Financial Report Estimate Reliability Class B Data Reliability Class A Note Description: Sales of tangible personal property and services to the University System of Georgia and its educational units. 115 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 35 36 37 24 25 26 4.01000 Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school Statute 48-8-3(10) Year Enacted 1968 Year Effective 1968 Data Source The National Center for Education Statistics and the Georgia Department of Education Estimate Reliability Class C Data Reliability Class C Note Description: Sales of tangible personal property and services used exclusively in the educational function of an approved private elementary or secondary school. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.01100 Sale of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute Statute 48-8-3(11) Year Enacted 1968 Year Effective 1968 Data Source Comprehensive Bill for HB 445/2015 LC 34 4571S Estimate Reliability Class A Data Reliability Class A Note Description: Sales of tangible personal property or services to, and the purchase of tangible personal property or services by, any educational or cultural institute which: (A) Is tax exempt under Section 501(c)(3) of the Internal Revenue Code; (B) Furnishes at least 50 percent of its programs through universities and other institutions of higher education in support of their educational programs; (C) Is paid for by government funds of a foreign country; and (D) Is an instrumentality, agency, department, or branch of a foreign government operating through a permanent location in this state. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01200 School lunches sold and served to pupils and employees of public schools Statute 48-8-3(12) Year Enacted 1953 Year Effective 1953 116 | P a g e Data Source Georgia School Nutrition Association and the Georgia Department of Education Estimate Reliability Class B Data Reliability Class B Note Description: School lunches sold and served to pupils and employees of public schools. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 7 6 Local Tax Expenditure 5 5 4 (m) Denotes a value of less than $1 million 4.01300 School lunches sold and served to pupils and employees of approved private schools Statute 48-8-3(13) Year Enacted 1967 Year Effective 1967 Data Source Georgia School Nutrition Association and the National Center of Education Statistics Estimate Reliability Class B Data Reliability Class B Note Description: School lunches sold and served to pupils and employees of approved private schools. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01400 Sales of art and other artifacts for display or exhibition to museums Statute 48-8-3(14) Year Enacted 1973 Year Effective 1973 Data Source U.S. Economic Census and IRS Form 990 data Estimate Reliability Class C Data Reliability Class B Note Description: Sales of art and anthropological, archeological, geological, horticultural, or zoological objects or artifacts and other similar tangible personal property to or for the use by any museum or organization which is tax exempt under section 501(c)(3) of the Internal Revenue Code of such tangible personal property for display or exhibition in a museum within this state. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01500 Specific fundraising sales by any religious institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious institution Statute 48-8-3(15B) 117 | P a g e Year Enacted 1953 Year Effective 1953 Data Source The National Center for Charitable Statistics Estimate Reliability Class C Data Reliability Class B Note Description: Sales of any religious paper in this state when the paper is owned and operated by religious institutions or denominations and no part of the net profit from the operation of the institution or denomination inures to the benefit of any private person when the number of days upon which the fundraising activity occurs does not exceed 30 in any calendar year. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01510 Sales of pipe organs or steeple bells to any church qualifying as a nonprofit Statute 48-8-3(15.1) Year Enacted 2001 Year Effective 2001 Data Source The Atlanta Chapter for The American Guild of Organists Estimate Reliability Class C Data Reliability Class C Note Description: Sales of pipe organs or steeple bells to any church qualifying as a nonprofit. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.01700 Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce Statute 48-8-3(17) Year Enacted 1951 Year Effective 1951 Data Source U.S. Energy Information Administration, U.S. Department of Energy Estimate Reliability Class B Data Reliability Class A Note Description: Sales of fuel or consumable supplies used by ships engaged in inter-coastal or foreign commerce. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 24 21 18 Local Tax Expenditure 16 14 13 (m) Denotes a value of less than $1 million 4.02000 Water delivered through water mains, lines, or pipes Statute 48-8-3(20) 118 | P a g e Year Enacted 1966 Year Effective 1966 Data Source The Bureau of Labor Statistics Consumer Expenditure Survey Estimate Reliability Class C Data Reliability Class C Note Description: The sale of water delivered to consumers through water mains, lines, or pipes. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure See estimate for Residential Local Tax Expenditure Utilities Service (4.5009) (m) Denotes a value of less than $1 million 4.02200 Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made Statute 48-8-3(22) Year Enacted 1951 Year Effective 1951 Data Source US Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no separate charge is made. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure See expenditure estimates for Local Tax Expenditure services (4.50003, 4.50010, 4.50011) (m) Denotes a value of less than $1 million 4.02300 Repair services when a separate charge is made to the customer Statute 48-8-3(23) Year Enacted 1951 Year Effective 1951 Data Source US Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Repair services when a separate charge is made to the customer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure See expenditure estimates for Local Tax Expenditure Services (4.50003, 4.50010, 4.50011) (m) Denotes a value of less than $1 million 4.03000 Vehicles purchased by service-connected disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase the specially adapted vehicle Statute 48-8-3(30) Year Enacted 1972 Year Effective 1972 119 | P a g e Data Source The American Community Survey and Fiscal Note for HB 259/2011 LC 5481 Estimate Reliability Class B Data Reliability Class B Note Description: The sale of a vehicle to a service-connected disabled veteran when the veteran received a grant from the United States Department of Veterans Affairs to purchase and specially adapt the vehicle to the veteran's disability. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03310 Partial sales tax exemption for jet fuel sold to or used by a qualifying airline at a qualifying airport Statute 48-8-3(33.1); 48-9-3 Year Enacted 2011 Year Effective 2011 Data Source Fiscal Note for HB 386 LC 34 3474S Estimate Reliability Class A Data Reliability Class A Note Exemption has been eliminated as of June 30, 2015. Description: Partial sales tax exemption for jet fuel sold to or used by a qualifying airline at a qualifying airport. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 21 0 0 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 4.03420 Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine parts Statute 48-8-3(34.2) Year Enacted 1996 Year Effective 1996 Data Source U.S. Economic Census and The Federal Trade Commission Estimate Reliability Class B Data Reliability Class A Note Description: Machinery and equipment used directly to remanufacture certain aircraft engines or aircraft engine parts. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.03600 Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water pollution Statute 48-8-3(36) 120 | P a g e Year Enacted 1972 Year Effective 1972 Data Source Fiscal Note for HB 445 LC 40 4571S Estimate Reliability Class A Data Reliability Class A Note Description: Machinery and equipment used in a facility for the primary purpose of reducing or eliminating air and water pollution State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03800 Sale of tangible personal property and fees and charges for services by the Rock Eagle 4- H center Statute 48-8-3(38) Year Enacted 1976 Year Effective 1976 Data Source Comprehensive Bill for HB 445/2015 LC 34 4571S Estimate Reliability Class C Data Reliability Class C Note Description: Sale of tangible personal property and fees and charges for services by the Rock Eagle 4-H center. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.03900 Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions Statute 48-8-3(39) Year Enacted 1994 Year Effective 1994 Data Source Georgia Department of Education, IRS Form 990 data, and the National High School Athletic Association Estimate Reliability Class C Data Reliability Class C Note Description: Sales by any public or private school containing any combination of grades kindergarten through 12 of tangible property, concessions, or tickets for admission to a school event or function, provided that the net proceeds from such sales are used solely for the benefit of such school or its students. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 121 | P a g e 4.04000 Sale of major components or repair parts installed in military aircraft, vehicles, or missiles Statute 48-8-3(40) Year Enacted 1965 Year Effective 1965 Data Source USASpending.gov and the U.S. Economic Census Estimate Reliability Class C Data Reliability Class B Note Description: Sale of major components or repair parts installed in military aircraft, vehicles, or missiles. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 31 31 24 Local Tax Expenditure 22 21 16 (m) Denotes a value of less than $1 million 4.04100 Sale of tangible personal property and services to a nonprofit child-caring institution, child-placing agency, or maternity home Statute 48-8-3(41) Year Enacted 2004 Year Effective 2004 Data Source U.S. Economic Census Estimate Reliability Class B Data Reliability Class B Note Description: Sales of tangible personal property and services to a child-caring institution as defined in paragraph (1) of Code Section 49-5-3; a child-placing agency as defined in paragraph (2) of Code Section 49-5-3, or maternity home as defined in paragraph (14) of Code Section 49-5-3, when such institution, agency, or home is engaged primarily in providing child services and is a non-profit, tax-exempt organization under Section 501(c)(3) of the IRS revenue code. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.04300 Revenues from coin-operated amusement machines for which individual permits are required Statute 48-8-3(43) Year Enacted 1992 Year Effective 1993 Data Source U.S. Economic Census and DOR Estimate Reliability Class C Data Reliability Class B Note Description: Gross revenue generated from all bona fide coin-operated amusement machines which vend or dispense music or are operated for skill, amusement, entertainment, or pleasure. 122 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 3 3 3 2 2 2 4.04600 Sale of tangible personal property or taxable services to nonprofit blood banks Statute 48-8-3(46) Year Enacted 1980 Year Effective 1980 Data Source U.S. Economic Census and IRS 990 Form Data Estimate Reliability Class C Data Reliability Class B Note Description: Sale to certain blood banks having a nonprofit status according to Section 501(c)(3) of the IRS revenue code. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.04700 Sale of drugs dispensed by prescription, prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or dangerous drugs Statute 48-8-3(47) Year Enacted 1984 Year Effective 1985 Data Source State Health Expenditures from the Centers for Medicare and Medicaid Services Estimate Reliability Class B Data Reliability Class B Note Description: Sale or use of drugs that are lawfully dispensable only by prescription for the treatment of natural persons; prescription eyeglasses and contact lenses; prescription contact lens samples; drugs dispensable by prescription for the treatment of natural persons without charge to physicians, hospitals, etc. by pharmaceutical manufacturers or distributors; drugs and durable medical equipment dispensed or distributed without charge solely for the purposes of a clinical trial approved by the FDA or an institutional review board. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 430 452 475 Local Tax Expenditure 297 312 328 (m) Denotes a value of less than $1 million 4.04800 Sale of crab bait to licensed commercial fishermen Statute 48-8-3(48) Year Enacted 1985 Year Effective 1985 Data Source Georgia Department of Natural Resources and the U.S. Economic Census Estimate Reliability Class C 123 | P a g e 4.05000 4.05100 4.05200 Data Reliability Class C Note Description: Sale of crab bait to licensed commercial fisherman. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Sales of insulin syringes and blood glucose level measuring strips dispensed without a prescription Statute 48-8-3(50) Year Enacted 1986 Year Effective 1986 Data Source The Centers for Disease Control and Prevention and the Medical Expenditures Panel Survey Estimate Reliability Class C Data Reliability Class C Note This estimate differs from the previous years report due to new data Description: Sale of blood measuring devices, monitoring equipment, or insulin delivery systems used exclusively by diabetics; insulin, insulin syringes and blood glucose monitoring strips when dispensed without a prescription. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 21 22 23 Local Tax Expenditure 15 15 16 (m) Denotes a value of less than $1 million Sale of oxygen when prescribed by a licensed physician Statute 48-8-3(51) Year Enacted 1986 Year Effective 1986 Data Source U.S. Economic Census and the Medical Expenditure Panel Survey Estimate Reliability Class C Data Reliability Class A Note Description: Sale of oxygen when prescribed by a licensed physician. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Sale or use of hearing aids Statute 48-8-3(52) Year Enacted 1986 Year Effective 1986 Data Source Fiscal Note for LC 25 4850/2007 and the Kaiser Family Foundation Estimate Reliability Class A 124 | P a g e Data Reliability Class B Note Description: Exempts the sale of approved hearing aids from sales and use tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 4 4 4 Local Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 4.05300 Transactions where food stamps or WIC coupons are used as the method of payment Statute 48-8-3(53) Year Enacted 1986 Year Effective 1987 Data Source U.S. Food and Nutrition Service and the U.S. Department of Agriculture Estimate Reliability Class B Data Reliability Class A Note Description: Sales tax is not applied on items purchased using food stamps or WIC coupons. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 114 113 113 Local Tax Expenditure 86 84 84 (m) Denotes a value of less than $1 million 4.05400 Sale or use of any durable medical equipment or prosthetic device prescribed by a physician Statute 48-8-3(54) Year Enacted 1992 Year Effective 1993 Data Source U.S. Census of National Health Expenditures and the Medical Expenditure Panel Survey Estimate Reliability Class B Data Reliability Class A Note Description: Sale or use of any durable medical equipment or prosthetic device prescribed by a physician. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 39 41 42 Local Tax Expenditure 27 28 29 (m) Denotes a value of less than $1 million 4.05500 Sale of Georgia lottery tickets Statute 48-8-3(55) Year Enacted 1992 Year Effective 1992 Data Source Georgia Lottery Commission Annual Report Estimate Reliability Class A Data Reliability Class A Note 125 | P a g e Description: Sale of lottery tickets authorized by Chapter 27 of Title 50. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 163 166 169 Local Tax Expenditure 112 113 117 (m) Denotes a value of less than $1 million 4.05600 Sale by any qualified nonprofit parent-teacher organization Statute 48-8-3(56) Year Enacted 1995 Year Effective 1995 Data Source Georgia Parent Teacher Association and IRS Form 990 data Estimate Reliability Class C Data Reliability Class B Note Description: Sale by any qualified nonprofit parent-teacher organization. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.05700 Food purchased for off-premises consumption Statute 48-8-3(57) Year Enacted 1996 Year Effective 1998 Data Source U.S. Consumer Expenditure Survey Estimate Reliability Class B Data Reliability Class B Note Description: Exemption applies to food items consumed off-premises, including meat, poultry, bread, milk, candy, canned soft drinks. It does not apply to alcoholic beverages, tobacco, immediate consumption items, vitamins, and minerals. This exemption does not apply to the local option sales tax but does not apply to special purpose and educational option sales taxes levied at the local level. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 469 486 499 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 4.05710 Sales of food and beverages to a qualified food bank (expires June 30, 2016) Statute 48-8-3(57.1) Year Enacted 2006 Year Effective 2006 Data Source Fiscal Note for HB 389/2014 LC 34 4513-EC Estimate Reliability Class B Data Reliability Class B Note Exemption was established in 2006 and expired June 30, 2010. Current exemption applies for sales between July 1, 2014 and June 30, 2016 126 | P a g e Description: Sales of food and beverages to a qualified food bank. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 3 0 Local Tax Expenditure 2 2 0 (m) Denotes a value of less than $1 million 4.05720 Exemption for prepared food and food ingredients that are donated to a qualified nonprofit agency and used for hunger relief purposes Statute 48-8-3(57.2) Year Enacted 2015 Year Effective 2015 Data Source Fiscal Note for HB 389/2015 LC 34 4513-ER Estimate Reliability Class A Data Reliability Class A Note This exemption was eliminated in 2011 and reinstated in 2015. This provision is scheduled to expire on June 30, 2020. Description: Exemption for persons donating prepared food and beverages to a qualified nonprofit agency to be used for hunger relief. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.05730 Exemption for prepared food and food ingredients that are donated following a natural disaster and used for disaster relief Statute 48-8-3(57.3) Year Enacted 2015 Year Effective 2015 Data Source Comprehensive Bill for HB 445/2015 LC 34 4571S Estimate Reliability Class C Data Reliability Class B Note This provision is scheduled to expire on June 30, 2020 Description: Exemption for prepared food and beverages that are donated following a natural disaster and used for disaster relief. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.05900 Sale of eligible food and beverages by any Girl or Boy Scout council Statute 48-8-3(59) Year Enacted 1996 Year Effective 1996 Data Source The American Community Survey, IRS Form 990 data, and Girl Scouts of America annual report Estimate Reliability Class B Data Reliability Class B Note 127 | P a g e Description: Sales of food or food ingredients to and by member councils of the Girl Scouts or Boy Scouts of America. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.06000 Sale of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less Statute 48-8-3(60) Year Enacted 2000 Year Effective 2001 Data Source Comprehensive Bill for HB 445/2015 LC 34 4571S Estimate Reliability Class C Data Reliability Class C Note Description: Sales of certain machinery and equipment used to improve air quality in a clean room of Class 100,000 or less. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06200 Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member of the producer Statute 48-8-3(62) Year Enacted 1998 Year Effective 1998 Data Source U.S. Census of Agriculture, the U.S. Economic Census, and the annual Survey of Sod Producers Estimate Reliability Class B Data Reliability Class A Note Description: Sod grass sold in the original state of production by the sod producer, employee of the producer, or family member of the producer. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.06300 Funeral merchandise when paid with funds from the Georgia Crime Victims' Emergency Fund Statute 48-8-3(63) Year Enacted 1998 Year Effective 1998 Data Source The Uniform Crime Report and the National Office for Victims of Crime Estimate Reliability Class C Data Reliability Class C 128 | P a g e Note Description: The sale or use of funeral merchandise, outer burial containers, and cemetery markers as defined in Code Section 43-18-1, which are purchased with funds received from the Georgia Crime Victims' Emergency Fund under Chapter 15 of Title 17. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06500 Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen Statute 48-8-3(65) Year Enacted NA Year Effective NA Data Source The Georgia Department of Natural Resources and the U.S. Economic Census Estimate Reliability Class C Data Reliability Class C Note Description: Sale of dyed diesel fuel used exclusively for operations of vessels or boats by licensed commercial fishermen. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.06700 Sale of coins or currency Statute 48-8-3(67) Year Enacted 2000 Year Effective 2000 Data Source US Mint annual report 2014 Estimate Reliability Class C Data Reliability Class C Note Description: Sale of coins or currency. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 4 4 4 Local Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million 4.06900 Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less Statute 48-8-3(69) Year Enacted 2000 Year Effective 2001 Data Source Comprehensive Bill for HB 445/2015 LC 34 4571S Estimate Reliability Class C Data Reliability Class C 129 | P a g e Note Description: Sales of machinery and equipment and material incorporated and used in a clean room of Class 100 or less. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.07000 Sale of natural gas used directly in the manufacture of electricity Statute 48-8-3(70) Year Enacted 1999 Year Effective 2000 Data Source U.S. Energy Information Administration Estimate Reliability Class B Data Reliability Class A Note Description: Sale of natural gas used directly in the manufacture of electricity which is subsequently sold. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 54 54 51 Local Tax Expenditure 0 0 0 (m) Denotes a value of less than $1 million 4.07100 Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries Statute 48-8-3(71) Year Enacted 1999 Year Effective 2000 Data Source National Center for Charitable Statistics Estimate Reliability Class B Data Reliability Class B Note Description: Sale to or by an organization whose primary purpose is to raise funds for books, materials, and programs for public libraries. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.07200 Sale of wheelchairs and attachments for wheelchairs when sold to permanently disabled individuals Statute 48-8-3(72) Year Enacted 1999 Year Effective 2000 Data Source State Health Expenditures from the Centers for Medicare and Medicaid Services and the Medical Expenditure Panel Survey Estimate Reliability Class B Data Reliability Class B 130 | P a g e Note Description: Sale of wheelchairs and attachments for wheelchairs when sold to permanently disabled individuals. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 4.07500 Sales tax holiday for back to school items (expired August 1, 2015) Statute 48-8-3(75) Year Enacted 2012 Year Effective 2013 Data Source Fiscal Note for HB 958/2014 LC 34 4112-EC Estimate Reliability Class A Data Reliability Class A Note Sales tax holidays for school supplies have been utilized beginning in 2002 Description: Commencing at 12:01 A.M. on August 1, 2014, and concluding at 12:00 Midnight on August 2, 2014; and Commencing at 12:01 A.M. on July 31, 2015, and concluding at 12:00 Midnight on August 1, 2015. The sale of articles of clothing and footwear; the single purchase of certain personal computers including non-recreational software; and purchases of general school supplies to be utilized in the classroom. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 40 42 0 Local Tax Expenditure 30 31 0 (m) Denotes a value of less than $1 million 4.07600 Exemption for personal property used in the renovation or expansion of an aquarium Statute 48-8-3(76) Year Enacted Year Effective Data Source Fiscal Note for HB 238/2015 LC 28 7425 Estimate Reliability Class A Data Reliability Class A Note Description: The subject bill provides an exemption from the state sales tax of tangible personal property used for the renovation and expansion of an aquarium owned or operated by an organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. This bill amends a similar 2003- 2007 exemption in Code Section 48-8-3(76) that applied only to sales of tangible personal property used for construction of an aquarium, rather than its renovation or expansion. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 0 1 1 Local Tax Expenditure 0 (m) (m) (m) Denotes a value of less than $1 million 131 | P a g e 4.08100 The purchase of food and nonalcoholic beverages provided at no charge aboard a qualified airline Statute 48-8-3(81) Year Enacted 2005 Year Effective 2005 Data Source Bureau of Transportation Statistics and the Air Transport Association Estimate Reliability Class B Data Reliability Class B Note Description: The purchase of food and nonalcoholic beverages provided at no charge aboard a qualified airline not including alcohol or tobacco. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 4 4 4 Local Tax Expenditure 3 3 3 (m) Denotes a value of less than $1 million 4.08200 Sales tax holiday for water-efficient and energy-efficient purchases (expired October 4, 2015) Statute 48-8-3(82) Year Enacted 2012 Year Effective 2013 Data Source Fiscal Note for HB 958/2014 LC 34 4112-EC Estimate Reliability Class B Data Reliability Class B Note Sales tax holidays for energy-efficient products have been utilized beginning in 2005 Description: Commencing at 12:01 A.M. on October 3, 2014, and concluding at 12:00 Midnight on October 5, 2014; and Commencing at 12:01 A.M. on October 2, 2015, and concluding at 12:00 Midnight on October 4, 2015. Purchase of energy-efficient products or water-efficient products with a sales price of $1,500 or less per product purchased for noncommercial home or personal use. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 0 Local Tax Expenditure 1 1 0 (m) Denotes a value of less than $1 million 4.08300 Sale of biomass materials used to produce electricity or steam or used to produce electricity or steam intended for sale Statute 48-8-3(83) Year Enacted 2006 Year Effective 2006 Data Source Fiscal Note for HB 1018/2009 LC 18 4936 and the U.S. Energy Information Administration Estimate Reliability Class B Data Reliability Class A Note 132 | P a g e Description: The sale or use of biomass material, including pellets or other fuels derived from compressed, chipped, or shredded biomass material, utilized in the production of energy, including without limitation, the production of electricity and/or steam. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) 1 1 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 4.08600 Sales of engines, parts, equipment and other tangible personal property used in the maintenance or repair of certain aircraft Statute 48-8-3(86) Year Enacted 2009 Year Effective 2009 Data Source Fiscal Note for HB 933/2014 LC 40 0540 Estimate Reliability Class C Data Reliability Class C Note Description: The sale or use of engines, parts, equipment, and other tangible personal property used in the maintenance or repair of aircraft when such engines, parts, equipment, and other tangible personal property are installed on such aircraft that is being repaired or maintained in this state so long as such aircraft is not registered in this State. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 20 20 20 Local Tax Expenditure 15 15 15 (m) Denotes a value of less than $1 million 4.08700 Sales of tangible personal property used to renovate or expand a zoological institution (expires June 30, 2018) Statute 48-8-3(87) Year Enacted 2009 Year Effective 2009 Data Source Fiscal Note for HB 428/2015 LC 40 0827 Estimate Reliability Class C Data Reliability Class C Note Description: Sales of tangible personal property used to renovate or expand a zoological institution. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 0 0 (m) Local Tax Expenditure 0 0 (m) (m) Denotes a value of less than $1 million 4.08800 Sale of tangible personal property used in the construction of a qualified civil rights museum (expired July 30, 2015) Statute 48-8-3(88) Year Enacted 2009 Year Effective 2009 133 | P a g e Data Source Fiscal Note for HB 364/2009 LC 18 7942 Estimate Reliability Class A Data Reliability Class A Note Description: Sales of tangible personal property used in the construction of a qualified civil rights museum. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) 0 0 Local Tax Expenditure (m) 0 0 (m) Denotes a value of less than $1 million 4.09300 Sale of tangible personal property used for and in the construction of a competitive project of regional significance, for the period commencing January 1, 2012, until June 30, 2016 Statute 48-8-3(93) Year Enacted 2012 Year Effective 2012 Data Source Fiscal Note for HB 958/2014 LC 34 4112-EC Estimate Reliability Class B Data Reliability Class B Note Description: For the period commencing January 1, 2012, until June 30, 2016, sales of tangible personal property used for and in the construction of a competitive project of regional significance. (B) The exemption provided in subparagraph (A) of this paragraph shall apply to purchases made during the entire time of construction of the competitive project of regional significance so long as such project meets the definition of a "competitive project of regional significance" within the period commencing January 1, 2012, until June 30, 2016. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 21 21 0 Local Tax Expenditure 15 15 0 (m) Denotes a value of less than $1 million 4.09600 Exemption for sales or use of construction materials used for or in the construction of buildings at a private college Statute 48-8-3(96) Year Enacted 2015 Year Effective 2015 Data Source Not Applicable Estimate Reliability Class A Data Reliability Class A Note Provision is effective for purchases made on or after July 1, 2015 and before July 1, 2016 and is limited in value to $350,000. Description: Allows an exemption for sales or use of construction materials used for or In the construction of buildings at a private college. 134 | P a g e State Tax Expenditure Local Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 0 (m) 0 0 (m) 0 135 | P a g e 4.3.2 4.3.3 Exemptions for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing Statute 48-8-3.2 Year Enacted 2012 Year Effective 2013 Data Source Fiscal Note for HB 386S LC 34 3477S Estimate Reliability Class A Data Reliability Class A Note Description: Exemptions for energy, machinery or equipment, industrial material, and consumable supplies used in manufacturing. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3,374 3,481 3,579 Local Tax Expenditure 2,352 2,410 2,469 (m) Denotes a value of less than $1 million Sale and use by a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment Statute 48-8-3.3 Year Enacted 2012 Year Effective 2013 Data Source Fiscal Note for HB 386S LC 34 3477S Estimate Reliability Class B Data Reliability Class A Note Description: Sale to, or use by, a qualified agriculture producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 178 183 187 Local Tax Expenditure 123 126 130 (m) Denotes a value of less than $1 million 136 | P a g e 4.5 Sales and Use Tax for Services 4.50000 Admissions and Amusements Description: Admission to school and college sports events; rental of films and tapes by theaters; cable tv and direct satellite tv; coin-operated video games (includes pinball and other mechanical amusements); membership fees in private clubs; overnight trailer parks. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 157 159 165 Local Tax Expenditure 118 119 123 (m) Denotes a value of less than $1 million 4.50001 Agricultural Services Description: Veterinary services (both large and small animal); landscaping services (including lawn care); pet grooming. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 145 147 153 Local Tax Expenditure 109 110 114 (m) Denotes a value of less than $1 million 4.50002 Automotive Services Description: Automotive road service and towing services; automotive painting and lube; parking lots and garages; automotive washing and waxing; automotive rustproofing and undercoating; labor charges on repairs to motor vehicles. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 132 134 130 Local Tax Expenditure 99 100 104 (m) Denotes a value of less than $1 million 4.50003 Business Services Description: Billboards; test laboratories (excluding medical); interior design and decorating; commercial art and graphic design; advertising agency fees (not ad placement); sign construction and installation; employment agencies; temporary help agencies; check and debt collection; credit information and credit bureaus; exterminating (includes termite services); maintenance and janitorial services; window cleaning; bail bond fees; telephone answering service; telemarketing services on contract; secretarial and court reporting services; security services (includes private investigation (detective) services; armored car services. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 664 673 698 Local Tax Expenditure 498 505 523 (m) Denotes a value of less than $1 million 4.50004 Computer and Online Services Description: Online data processing services; downloaded software, books, music, movies and video content, other electronic goods; internet service 137 | P a g e providers dial-up; internet service providers DSL or other broadband; mainframe computer access and processing service; information services; software custom programs and professional services. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 358 362 376 Local Tax Expenditure 268 272 282 (m) Denotes a value of less than $1 million 4.50005 Construction Labor Description: Labor for the construction of buildings; heavy and civil engineering construction labor; labor of specialty trade contractors. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1,485 1,504 1,559 Local Tax Expenditure 1,114 1,128 1,170 (m) Denotes a value of less than $1 million 4.50006 Fabrication, Installation, and Repair Services Description: Labor charges for repairs for other tangible property; tv/radio repairs and other electronic equipment; repair charges generally; labor charges on repair of aircraft; repairs to interstate vessels; repairs to railroad rolling stock; repairs or remodeling of real property; service contracts sold at the time of sale of tangible personal property; installation charges by persons selling property; installation charges by persons other than the seller of the property. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 220 222 231 Local Tax Expenditure 165 167 173 (m) Denotes a value of less than $1 million 4.50007 Finance, Insurance, and Real Estate Description: Service charges of banking institutions includes loan broker fees; insurance services; property sales agents (real estate or personal); real estate management fees (rental agents); investment counseling; real estate title abstract services. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1,021 1,034 1,072 Local Tax Expenditure 765 775 804 (m) Denotes a value of less than $1 million 4.50008 Industrial and Mining Services Description: Seismograph and geophysical services; metal and nonmetal and coal mining services; typesetting services; platemaking for the print trade. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 10 11 11 Local Tax Expenditure 8 8 8 (m) Denotes a value of less than $1 million 138 | P a g e 4.50009 4.50010 4.50011 4.50012 4.50013 Residential Utility Service Description: Interstate telephone (including local, long distance, and cellular service) and telegraph; water; sewer and refuse. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 81 82 85 Local Tax Expenditure 61 62 64 (m) Denotes a value of less than $1 million Personal Services Description: Carpet and upholstery cleaning; swimming pool cleaning and maintenance; water softening and conditioning; shoe repair; garment services (altering and repairing); health clubs, tanning parlors, and reducing salons; laundry and dry cleaning services coin-operated; laundry and dry cleaning services not coin-operated; massage services (includes dating services); tax return preparation; sports and recreation instruction; barber shops; beauty parlors; travel agent services. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 277 281 291 Local Tax Expenditure 208 211 218 (m) Denotes a value of less than $1 million Professional Services Description: Attorneys; accounting and bookkeeping; physicians; dentists; medical test laboratories; architects; engineers; land surveying; nursing services out of the hospital. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1,949 1,974 2,046 Local Tax Expenditure 1,462 1,480 1,535 (m) Denotes a value of less than $1 million Storage Description: Marine towing services (includes tugboats); household goods storage; cold storage (includes fur storage); food storage; mini-storage; marina service (docking, storage, cleaning, repair); packing and crating (includes bus services); other warehousing and storage (including automotive storage). State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 69 70 72 Local Tax Expenditure 52 52 54 (m) Denotes a value of less than $1 million Transportation Services Description: Intrastate courier service. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 139 | P a g e 4.7 Vendor Compensation 4.70000 Compensation of dealers for reporting and collecting tax Statute 48-8-50 Year Enacted 1964 Year Effective 1964 Data Source DOR Statistical Report for 2012 Estimate Reliability Class A Data Reliability Class A Note Description: Georgia allows a vendor collection fee of 3 percent for the first $3,000 and then 0.5 percent for amounts above $3,000 but does not impose a maximum limitation per vendor. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 60 60 63 (m) Denotes a value of less than $1 million 140 | P a g e 4.9 Casual Sales 4.90000 Sales tax exemption for casual sales Statute DOR administrative rule Year Enacted NA Year Effective NA Data Source DOR data for 2013 Estimate Reliability Class B Data Reliability Class A Note Sales of all motor vehicles will be exempt from state and local sales tax beginning March 1st, 2013 but taxed under the Alternative Ad Valorem Tax on Motor Vehicles, see section 11 of the report. Provision listed as 4.30000 in reports prior to FY 2014. Description: Purchases of boats, planes and other tangible goods sold by persons not in the business of selling such items are not subject to sales tax. (Prior to the implementation of the Alternative Ad Valorem Tax on Motor Vehicles this estimate included casual sale of motor vehicles.) State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 Local Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million 141 | P a g e Sales and use tax expenditures for which an estimate is not currently available Expenditure Statute Summary 4.00100 48-8-3(1) Sales to Federal Government, State of Georgia or a county or municipality in Georgia or any agency of such governments 4.00200 48-8-3(2) Tangible personal property furnished by the Federal Government or any county or municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system 4.00300 48-8-3(3) Federal retailer's excise tax if separately itemized to the consumer and Georgia motor fuel tax imposed on the sale of motor fuel 4.00900 48-8-3(9) Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia 4.01800 48-8-3(18) Charges for transportation of tangible personal property made in connection with interstate or intrastate transportation 4.01900 48-8-3(19) All tangible personal property purchased outside this state by a nonresident when the property is brought into Georgia upon the nonresident becoming a resident 4.02100 48-8-3(21) Sales, transfers or exchanges of tangible personal property resulting from business reorganization when the owners, partners, or stockholders maintain the same proportionate interest or share in the newly formed business 4.02400 48-8-3(24) Rental of videotape or film to persons charging admission to view the tape or film 4.03100 48-8-3(31) Sale of tangible personal property manufactured or assembled in Georgia for export when delivery is taken outside of Georgia 4.03200 48-8-3(32) Aircraft, watercraft, motor vehicles, and other transportation equipment manufactured or assembled in this State for exclusive use outside Georgia 4.03300 48-8-3(33) Common or common and contract carriers 4.03410 48-8-3(34.1) Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities 4.03610 48-8-3(36.1) Machinery and equipment used for water conservation and incorporated into a qualified water conservation facility 4.03910 48-8-3(39.1) Cargo containers and related chassis used for storage or shipping by persons engaged in international shipment of tangible personal property 4.04200 48-8-3(42) Use or lease of tangible personal property when the lessor and lessee are under 100 percent common ownership and where the person who furnishes, leases, or rents the property has paid sales or use tax on the property 4.04400 48-8-3(44) Sale of motor vehicles to nonresident purchasers when vehicles are immediately removed from Georgia and titled in another state 4.04500 48-8-3(45) The sale or use of paper stock when used to print catalogs for distribution outside Georgia 4.06100 48-8-3(61) Advertising inserts that are used in newspapers for resale 4.06600 48-8-3(66) Sale of gold, silver, or platinum bullion 142 | P a g e 4.06800 4.09100 4.09400 48-8-3(68) 48-8-3(91) 48-8-3(94) Sale of certain computer equipment when the total qualifying purchases by a high technology company exceed $15 million The sale of prewritten software which has been delivered to the purchaser electronically or by means of load and leave The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale 143 | P a g e 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. Counties levy a 1 percent on gross direct premiums. Municipalities may levy a tax of up to 1 percent and counties and municipalities may levy rates of up to 2.5 percent on insurance premiums for policies other than life insurance policies. In FY 2014, state revenues from this tax equaled $372 million and local revenues equaled $470 million. This tax is administered by the State Insurance Commissioner. The state proceeds of the tax are deposited into the State General Fund. 5.00100 5.00200 Deduction of retaliatory taxes paid to other states Statute 33-8-7 Year Enacted 1960 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level Description: Property and casualty insurance companies domiciled in Georgia are able to deduct from their Georgia tax liability taxes paid to other states on policies written in those states. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Insurance premium tax credits - Georgia Job Tax Credit Statute 33-8-4.1; 33-1-18; 48-7-29.14(b)(1) Year Enacted 1960 Year Effective 2009, 2002, 2008 Data Source DOR data for 2015 and Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the individual income tax section and the corporate tax section, see 1.6.012 and 2.6.001 Description: The credit provides a statewide job tax credit to any business or headquarters engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, or research and development. Retail establishments are only allowed the credit if located in one of the 40 least-developed counties of the state. Average wages must be greater than the average wage of the county in the state with the lowest average wage. To be eligible, employers must offer health insurance to all new employees. 144 | P a g e State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 8 8 8 Corporate Income Tax Expenditure 60 62 62 Insurance Premium Tax Expenditure 2 2 3 State Tax Expenditure 70 71 73 (m) Denotes a value of less than $1 million; may not sum due to rounding 5.00300 Exemption for premiums of high-deductible health plans Statute 33-8-4 Year Enacted 2008 Year Effective 2009 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The local exemption expired on December 31, 2014. Description: Insurance companies are allowed to exempt from their insurance premium tax liability any premiums paid by Georgia residents for high-deductible health plans as defined by Section 233 of the Internal Revenue Code. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 6 8 8 (m) Denotes a value of less than $1 million 5.00400 Exemption for insurance companies that only insure places of worship Statute 33-8-13 Year Enacted 1996 Year Effective 1996 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level Description: Insurance companies that only insure the risks of places of worship are exempt from the state premium tax. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 5.00500 Insurance abatements Statute 33-8-5 Year Enacted 1996 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level Description: Georgia imposes a reduced state rate of 1.25 percent on insurance companies that invest at least 25 percent of their assets in qualified Georgia assets. If the amount invested in qualified Georgia assets is greater than 75 percent, the rate is reduced to 0.50 percent. 145 | P a g e State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 135 138 141 5.00600 5.00700 Special deductions for life insurance companies Statute 33-8-4, 33-8-8, 33-8-8.1 Year Enacted 1981 Year Effective Prior to 2000 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note Not applicable at the local level Description: Life insurance companies are permitted to deduct contributions to state guarantee funds, license fees paid to local governments, local premium taxes from premium taxes otherwise payable to the State. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 141 144 147 (m) Denotes a value of less than $1 million Insurance premium tax credit Low-Income Housing Credit Statute 33-8-4.1; 33-1-18; 48-7-29.14(b)(1) Year Enacted 1960 Year Effective 2009, 2002, 2008 Data Source Office of Insurance and Safety Fire Commissioner Estimate Reliability Class A Data Reliability Class A Note The same estimate is provided in the individual income tax section and the corporate income tax section, see 1.6.028 and 2.6.017 Description: This is a credit against Georgia income taxes for taxpayers owning developments which receive the federal Low-Income Housing tax credit and that are placed in service on or after January 1, 2001. State Fiscal Years ($ in Millions) 2015 2016 2017 Income Tax Expenditure 60 64 69 Corporate Income Tax Expenditure 25 27 29 Insurance Premium Tax Expenditure 105 112 120 State Tax Expenditure 190 203 218 (m) Denotes a value of less than $1 million 146 | P a g e 6. Motor Fuel Tax The tax on motor fuels was substantially modified in 2015. Under the new law, the tax on motor fuels other than diesel fuel is 26 cents per gallon. The tax on diesel fuel is 29 cents per gallon. The base of the motor fuel tax is imposed on any source of energy that can be used for propulsion of a motor vehicle on the public highways, including, but not limited to: gasoline, fuel oils, compressed petroleum gas and special fuels. The tax is administered by the Georgia DOR. 6.00200 6.00300 6.00400 Sale of fuel to mass transit vehicles Statute 48-9-3 Year Enacted 1978 Year Effective Latest modification 2010 Data Source Energy Information Administration and the U.S. Department of Energy Estimate Reliability Class B Data Reliability Class A Note Combined with 6.00300 Description: Fuel sold for use in vehicles operated by a public campus transportation system or fuel sold for use in public mass transit vehicles is exempt from tax. This provision expired June 30, 2015. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 0 0 (m) Denotes a value of less than $1 million Sale of fuel to campus transportation vehicles Statute 48-9-3 Year Enacted 2010 Year Effective 2010 Data Source Estimate included in 6.00200 Estimate Reliability Class B Data Reliability Class A Note This exemption expired June 30, 2015 Description: Sale of fuel to campus transportation vehicles. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure Estimate included in 6.00200 (m) Denotes a value of less than $1 million Motor fuel tax exemption for aviation fuel Statute 48-9-3 Year Enacted 1978 Year Effective 1978 Data Source DOR Statistical Report for 2010 Estimate Reliability Class A Data Reliability Class A Note Description: Exemption for aviation fuel. 147 | P a g e 6.00500 6.00600 State Tax Expenditure (m) Denotes a value of less than $1 million State Fiscal Years ($ in Millions) 2015 2016 2017 (m) 1 1 Motor fuel tax vendor compensation Statute 48-9-3,14; see also 48-8-50(3) & (4) Year Enacted 1992 Year Effective 1992 Data Source Fiscal Note for HB 170 LC 34 4630S Estimate Reliability Class A Data Reliability Class A Note Description: Motor fuel dealers are allowed to retain 3 percent of total amounts collected as reimbursement for the cost of collection. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 9 12 (m) Denotes a value of less than $1 million Motor fuel tax exemption for public school buses Statute 48-9-3 Year Enacted 2013 Year Effective 2014 Data Source Fiscal Note for HB 211 LC 33 4918 Estimate Reliability Class B Data Reliability Class A Note Description: Sale of motor fuel to public school systems for the exclusive purpose of the school system operating school buses when the motor fuel is purchased by the school system is exempt from motor fuel tax. This provision expired June 30, 2015. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 0 0 (m) Denotes a value of less than $1 million Motor fuel tax expenditures for which an estimate is not currently available Expenditure Statute Summary 6.00100 48-9-10 Motor fuel tax refunds for agricultural purposes 148 | P a g e 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 $10 per container up to 31 gallons with a proportionate tax on fractional parts of 31 gallons for draft malt beverages. The tax rate is four and one-half cents per 12 ounces for bottles and cans with proportionate rates on fractional parts of other sizes. Wine is taxed at a rate of 11 cents per liter and an import tax of 29 cents per liter is imposed on table wines with proportional rates for fractional parts of a liter. An excise tax of 27 cents per liter with an import tax of 40 cents per liter is imposed on dessert wines with proportional rates for fractional parts of a liter. An excise tax of 50 cents per liter and an import tax of 70 cents per liter are levied on distilled spirits. 7.00300 7.00400 7.00500 200 gallons annually of homebrew per household Statute 3-5-61, 3-6-70 Year Enacted 1977 Year Effective 1977 Data Source American Homebrewers' Association Estimate Reliability Class B Data Reliability Class C Note Description: Allows an exemption for up to 200 gallons annually of homebrew per household. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 1 1 1 (m) Denotes a value of less than $1 million Sales to and use by religious organizations for sacramental purposes Statute 3-5-61, 3-6-70 Year Enacted 1977 Year Effective 1977 Data Source National Center for Charitable Statistics and Catholic.org Estimate Reliability Class B Data Reliability Class C Note Description: Sales to and use by religious organizations for sacramental purposes. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Exemption for ethyl alcohol used for certain purposes Statute 3-5-61, 3-6-70 Year Enacted 1980 Year Effective 1980 Data Source U.S. Economic Census Estimate Reliability Class B Data Reliability Class A 149 | P a g e 7.00600 Note Description: An exemption is allowed for purchases of ethyl alcohol intended for use or used for the following purposes: scientific, chemical, mechanical, industrial, medicinal, and culinary. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Malt beverages containing less than 0.5 percent alcohol by volume Statute 3-5-90 Year Enacted 1987 Year Effective 1987 Data Source U.S. Economic Census and averagebeerprices.com Estimate Reliability Class B Data Reliability Class B Note Description: Malt beverages which contain less than 0.5 percent alcohol by volume shall not be subject to any tax levied under this title or any tax levied pursuant to authority granted by this title. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Alcoholic beverages tax expenditures for which an estimate is not currently available Expenditure Statute Summary 7.00100 3-5-61 Sales to persons outside the state for resale or consumption outside the state 7.00200 3-5-61, 3-6-70 Sales to stores or canteens in U.S. military reservations 150 | P a g e 8. Cigar and Cigarette Excise Tax This 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 three pounds per thousand are taxed at a rate of 2.5 mills each ($2.50 per 1000). All other cigars are taxed at 23 percent of the wholesale cost price, exclusive of any trade, cash, of other discounts or any promotion, advertising, display or other similar allowances. Loose or smokeless tobacco is taxed at a rate of 10 percent of the wholesale cost price. The tax is administered by the Georgia DOR. In FY 2014 the tax totaled $217 million. The proceeds of the tax are deposited into the State General Fund. 8.00100 Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Georgia War Veterans Nursing Home Statute 48-11-2 Year Enacted 1955 Year Effective Latest Modification 2003 Data Source Georgia Department of Veteran Services Estimate Reliability Class B Data Reliability Class C Note Description: Exemption for purchases for use exclusively by patients at the Georgia War Veterans Home and the Georgia War Veterans Nursing Home. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Cigar and cigarette excise tax expenditures for which an estimate is not currently available Expenditure Statute Summary 8.00200 48-11-3 De minimis amount brought into the state by one person 8.00300 48-11-3 Cigars and cigarettes stored in a public warehouse 8.00400 48-11-3 Certain cigars and cigarettes held by licensed dealers 151 | P a g e 9. Financial Institutions Special State Occupation Tax This is a special state occupation tax imposed on the adjusted gross receipts of each depository financial institution that does business or owns property in the state. The state tax rate is levied at a rate of 0.25 percent. In addition to the state tax, counties and municipalities may levy a rate not to exceed 0.25 percent of gross receipts. Any amount paid under the special state occupation tax by a financial institution reduces the institution's state income tax liability by an equal amount. The tax is administered by the Georgia DOR. The revenues from this tax in FY 2014 equaled $19 million. The proceeds of the tax are deposited into the State General Fund. 9.00100 Deduction for interest paid Statute 48-6-95 Year Enacted 1975 Year Effective 1975 Data Source FDIC Statistics on Depository Institutions Estimate Reliability Class B Data Reliability Class A Note Description: Financial institutions are allowed to deduct from gross receipts interest paid on all liabilities. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 2 2 2 (m) Denotes a value of less than $1 million Financial institutions tax expenditures for which an estimate is not currently available Expenditure Statute 9.00200 48-6-95 9.00300 48-6-95 Summary Deductions for income from authorized activities of a domestic international banking facility Deduction for income from banking business with persons or entities outside the U.S. 152 | P a g e 10. Special Assessment of Forest Land Conservation Use Property Real property devoted to qualified conservation use is assessed at 40 percent of its current use value. This tax treatment is designed to reduce the property tax burden on landowners in an effort to discourage the conversion of land to residential or commercial use. The property must be maintained in a qualifying conservation use for a period of 10 years. Because the state offsets the loss of local government property tax revenue stemming from this exemption, this exemption represents a reduction in state tax revenues. 10.00000 Special assessment of forest land conservation use property Statute 48-5A-2 Year Enacted 2008 Year Effective 2008 Data Source Office of Planning and Budget; and the Georgia Department of Revenue Estimate Reliability Class B Data Reliability Class A Note Description: Grants made available by the Georgia General Assembly through annual appropriations and awarded to counties, municipalities and county or independent school districts for purposes of the Special Assessment of Forest Land Conservation Use Property program. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 29 35 35 (m) Denotes a value of less than $1 million 153 | P a g e 11. Alternative Ad Valorem Tax on Motor Vehicles As of March 1, 2013 motor vehicles titled in Georgia are subject to a title ad valorem fee, otherwise referred to as the Motor Vehicle Title Fee. Vehicles purchased on or after January 1, 2012 and before March 1, 2013 may opt-into the title fee system. This legislation was passed in the 2012 session of the General Assembly and was substantially amended in the 2013 session. As part of the legislation, sales and use tax on the sale of motor vehicles was eliminated for purchases or leases occurring on or after March 1, 2013. The title fee rate in CY 2013 was 6.5 percent and increased to 6.75 percent in CY 2014 and to 7 percent in CY 2015. This fee generated $758 million to the State General Fund in FY 2014 and $611 million in local government receipts. 11.001 11.002 Reduced rate for related family transfers Statute 48-5C-1(d)(1)-(2) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: A reduced rate of 0.25 percent applies to transfers for a vehicle transferred between immediate family members or a transfer occurring as a result of the death of an immediate family member. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 6 5 Local Tax Expenditure 4 4 5 (m) Denotes a value of less than $1 million Disabled veteran exemption Statute 48-5C-1(d)(7) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Exemption from the title fee of the sale of a vehicle to a service-connected disabled veteran when the veteran received a grant from the U.S. Department of Veterans Affairs to purchase and specifically adapt the vehicle to his or her disability. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 154 | P a g e 11.003 11.004 11.005 Reduced rate for rental vehicles Statute 48-5C-1(d)(11)(A) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Rental vehicles are subject to a reduced state title fee rate of 0.625 percent of the fair market value and a local title fee rate of 0.625 percent of the fair market value. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 56 65 57 Local Tax Expenditure 44 47 51 (m) Denotes a value of less than $1 million Reduced rate for vehicles manufactured in years 1963 through 1985 Statute 48-5C-1(d)(17) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class B Note Description: Vehicles manufactured in years 1963 through 1985 are subject to a reduced state title fee rate of 0.5 percent and reduced local title fee rate of 0.5 percent of the fair market value of the vehicle. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Reduced rate for salvage vehicles Statute 48-5C-1(b)(2) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Salvage vehicles are subject to a state title fee rate of 1 percent and are not subject to the local title fee. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 23 28 25 Local Tax Expenditure 26 29 32 (m) Denotes a value of less than $1 million 155 | P a g e 11.006 11.007 11.008 11.009 Dealer loaner vehicle exemption Statute 48-5C-1(d)(12) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class A Note Description: Dealer loaner vehicles are exempt from the state and local title fee for a period of 366 days. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 7 5 3 Local Tax Expenditure 6 4 2 (m) Denotes a value of less than $1 million Reduced rate for donated vehicles Statute 48-5C-1(d)(13) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Vehicles donated to nonprofit organizations for the purpose of being transferred to another person are subject to a reduced state title fee rate of 1 percent of the fair market value of the vehicle. No local title fee applies. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million Extended payment period for out-of-state vehicles Statute 48-5C-1(d)(3) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class B Note Description: Vehicles registered by individuals moving from out of state are allowed to pay the title fee in two equal installments over a 12-month period. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 5 2 -2 Local Tax Expenditure 4 0 0 (m) Denotes a value of less than $1 million Trade-in exemption (including rebates and cash discounts) Statute 48-5C-1(a)(1) Year Enacted 2012 156 | P a g e 11.010 11.011 11.012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Both the state and local title fee is imposed on the fair market value of a vehicle net of the trade-in value of another motor vehicle, rebates or cash discounts. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 338 345 303 Local Tax Expenditure 283 266 290 (m) Denotes a value of less than $1 million Special assessment for used vehicles Statute 48-5C-1(a)(1)(C) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class C Note Description: Under certain conditions, used vehicles may be valued based on bill of sale, odometer reading, and values from alternative pricing guides. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 20 21 18 Local Tax Expenditure 16 16 17 (m) Denotes a value of less than $1 million Special assessment for new vehicles Statute 48-5C-1(a)(1)(D) Year Enacted 2012 Year Effective 2013 Data Source DOR data for 2015 Estimate Reliability Class B Data Reliability Class B Note Description: The title fee is applied to the greater of the retail selling price or the average of the current fair market value and the current wholesale value. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure -46 -56 -49 Local Tax Expenditure -41 -42 -46 (m) Denotes a value of less than $1 million Buy here pay here transactions Statute 48-5C-1(b)(1)(B)(xv) Year Enacted 2013 Year Effective 2014 Data Source DOR data for 2015 Estimate Reliability Class A 157 | P a g e Data Reliability Class A Note Description: Seller financed used car transactions are subject to a title fee rate that is 2.5 percentage points below the standard title fee rate. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure 3 6 6 Local Tax Expenditure 3 4 3 (m) Denotes a value of less than $1 million 11.013 Exemption from TAVT for leased vehicles qualifying for Manufacturing Headquarters Statute 48-5C-1 Year Enacted 2015 Year Effective 2015 Data Source DOR data for 2015 Estimate Reliability Class A Data Reliability Class A Note Description: Creates the plate category of "Manufacturing HQ" and included in the rights and qualifications of that plate is an exemption from the TAVT. State Fiscal Years ($ in Millions) 2015 2016 2017 State Tax Expenditure (m) (m) (m) Local Tax Expenditure (m) (m) (m) (m) Denotes a value of less than $1 million 158 | P a g e 12. Special Excise Tax on Consumer Fireworks An excise tax of 5 percent is levied in addition to any state and local taxes imposed by law. The proceeds from this excise tax are deposited into the State General Fund. This provision became effective for fiscal years beginning on July 1, 2015. At this time, there are no exemptions allowed against this provision. 159 | P a g e Appendix of Tables Expenditure 1.6.024 1.6.031 1.6.033 2.6.013 2.6.033 4.02500 4.02600 4.02700 4.02800 4.02900 4.02910 4.03310 4.03400 4.03430 4.03440 Table 1: Summary of expired provisions Summary Tax Teleworking Credit Low- & Zero-Emission Vehicle Credit & Electric Vehicle Charger Credit Clean Energy Property and Wood Residuals Credit Teleworking Credit Cigarette export tax credit 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 Partial sales tax exemption for jet fuel sold to or used by a qualifying airline at a qualifying airport Certain machinery used in the manufacturing of tangible personal property The sale or use of repair or replacement parts, machinery clothing, molds, dies, waxes or tooling for machinery Sale of tangible personal property to or used in or for the construction of a new alternative fuel facility primarily dedicated to the production and State Individual Income Tax Total State Credit Total State Credit Corporate Income Tax Corporate Income Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Expiration Date 12/31/2011 6/30/2015 12/31/2014 12/31/2011 6/30/2010 1/1/2013 1/1/2013 1/1/2013 1/1/2013 1/1/2013 1/1/2013 1/1/2013 1/1/2013 1/1/2013 6/30/2012 160 | P a g e 4.03500 4.03700 4.04900 4.04910 4.05800 4.06400 4.07010 4.07300 4.07400 4.07500 4.07700 4.07800 4.07900 4.08200 4.08800 4.08900 4.09000 processing of ethanol, biodiesel, butanol or their by-products Certain materials used in industrial packaging Machinery and equipment used in combating air and water pollution and any industrial material used in a burning or recycling process 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 Graduated exemption for the sale of overhead materials used in government contracts Sale of electricity or fuels used exclusively for the operation of an irrigation system on a farm for crop irrigation 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 Sale of certain production equipment to film producers and film production companies Sale or use of digital broadcast equipment sold to, leased to, or used by a federally licensed commercial or public radio or television broadcast station, a cable network, or a cable distributor Sales tax holiday for back to school items Liquefied gases and other fuels used in structures where plants, floral products, seedlings, and nursery stock are grown for sale Materials used to construct a new symphony hall costing in excess of $200 million that is owned and operated by a nonprofit organization Ice used to chill poultry or vegetables during processing or shipment Sales tax holiday for water-efficient and energyefficient purchases Sale of tangible personal property used in the construction of a qualified civil rights museum The sale of an airplane flight simulation training device. The sale of electricity to a manufacturer located in this state used directly in the manufacture of a product. Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax Sales and Use Tax 1/1/2013 12/31/2012 1/1/2013 6/30/2010 1/1/2011 1/1/2013 12/31/2010 1/1/2013 11/1/2008 8/1/2015 1/1/2013 9/1/2011 1/1/2013 10/4/2015 7/30/2015 6/30/2011 1/1/2013 161 | P a g e 4.09200 6.00200 6.00300 6.00600 Sale to an organization defined by the Internal Revenue Service as an instrumentality of the states relating to the holding of an annual meeting in this state for the period commencing July 1, 2012, and ending on December 31, 2013 Sale of fuel to mass transit vehicles Sale of fuel to campus transportation vehicles Motor fuel tax exemption for public school buses Sales and 12/31/2013 Use Tax Motor Fuel Tax Motor Fuel Tax Motor Fuel Tax 6/30/2015 6/30/2015 6/30/2015 162 | P a g e Table 2: Sales and use tax expenditures by type Expenditure Summary Sales Tax Exemption for a Business Input4 State FY State FY State FY 2015 2016 2017 4.01700 Sales of fuel or consumable supplies used by 24 21 18 ships engaged in inter-coastal or foreign commerce 4.03410 Machinery and equipment used to handle, move, or store tangible personal property in certain distribution facilities Estimate not available at this time 4.03420 Machinery and equipment used directly to 1 1 1 remanufacture certain aircraft engines or aircraft engine parts 4.03910 Cargo containers and related chassis used for Estimate not available at this storage or shipping by persons engaged in time international shipment of tangible personal property 4.04500 The sale or use of paper stock when used to Estimate not available at this print catalogs for distribution outside time Georgia. 4.04800 Sale of crab bait to licensed commercial (m) (m) (m) fishermen 4.06000 Sale of certain machinery and equipment (m) (m) (m) used to improve air quality in a clean room of Class 100,000 or less 4.06500 Sale of dyed diesel fuel used exclusively for (m) (m) (m) operations of vessels or boats by licensed commercial fishermen 4.06800 Sale of certain computer equipment when the Estimate not available at this total qualifying purchases by a high time technology company exceed $15 million 4.06900 Sales of machinery and equipment and (m) (m) (m) material incorporated and used in a clean room of Class 100 or less 4.07000 Sale of natural gas used directly in the manufacture of electricity 54 54 51 4.08100 The purchase of food and nonalcoholic 4 4 4 beverages provided at no charge aboard a qualified airline 4.08300 Sale of biomass materials used to produce (m) 1 1 electricity or steam or used to produce electricity or steam intended for sale 4 Sales tax exemptions which are defined primarily as an exemption for a profit making business. 163 | P a g e Table 2: Sales and use tax expenditures by type Expenditure Summary 4.09400 The sale, use, consumption, or storage of State FY State FY State FY 2015 2016 2017 Estimate not available at this materials, containers, labels, sacks, or bags time used for packaging tangible personal property for shipment or sale 4.3.2 Exemptions for energy, machinery or 3,374 3,481 3,579 equipment, industrial material, and consumable supplies used in manufacturing 4.3.3 Sale and use by a qualified agriculture 178 183 187 producer of agricultural production inputs, energy used in agriculture, and agricultural machinery and equipment Sales Tax Exemption for a Specific Item5 4.00300 Federal retailer's excise tax if separately Estimate not available at this itemized to the consumer and Georgia motor time fuel tax imposed on the sale of motor fuel 4.00400 Sales of transportation furnished by a county 9 9 10 or municipal public transit system or public transit authorities 4.00500 Sales of transportation furnished by an Estimate Combined With approved and authorized urban transit system 4.00400 4.01200 School lunches sold and served to pupils and 7 7 6 employees of public schools 4.01300 School lunches sold and served to pupils and 1 1 1 employees of approved private schools 4.01800 Charges for transportation of tangible personal property made in connection with Estimate not available at this time interstate or intrastate transportation 4.02000 Water delivered through water mains, lines, See expenditure estimate for or pipes Residential Utilities (4.5009) 4.02200 Professional, insurance or personal service transactions which involve sales as inconsequential elements for which no See expenditure estimates for services (4.50003, 4.50010, 4.50011) separate charge is made 4.02300 Repair services when a separate charge is made to the customer See expenditure estimates for Services (4.50003, 4.50010, 4.50011) 4.02400 Rental of videotape or film to persons charging admission to view the tape or film Estimate not available at this time 5 Sales tax exemptions which are defined primarily by the item being purchased and not defined, or only generally defined, by the seller or purchaser. 164 | P a g e Expenditure 4.03300 4.04200 4.04300 4.04700 4.05000 4.05100 4.05200 4.05400 4.05500 4.05700 4.05730 4.06100 4.06200 4.06600 4.06700 4.07500 Table 2: Sales and use tax expenditures by type Summary Common or common and contract carriers State FY State FY State FY 2015 2016 2017 Estimate not available at this time 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 Estimate not available at this time Revenues from coin-operated amusement 3 3 3 machines for which individual permits are required Sale of drugs dispensed by prescription, 430 452 475 prescription glasses, contact lenses, contact lens samples and sales or use of certain controlled substances or dangerous drugs Sales of insulin syringes and blood glucose 21 22 23 level measuring strips dispensed without a prescription Sale of oxygen when prescribed by a (m) (m) (m) licensed physician Sale or use of hearing aids 4 4 4 Sale or use of any durable medical 39 41 42 equipment or prosthetic device prescribed by a physician Sale of Georgia lottery tickets 163 166 169 Food purchased for off-premises 469 486 499 consumption Exemption for prepared food and food (m) (m) (m) ingredients that are donated following a natural disaster and used for disaster relief Advertising inserts that are used in newspapers for resale Estimate not available at this time Sod grass sold in the original state of 2 2 2 production by the sod producer, employee of the producer, or family member of the producer Sale of gold, silver, or platinum bullion Estimate not available at this time Sale of coins or currency 4 4 4 Sales tax holiday for back to school items 40 42 0 (expired August 1, 2015) 165 | P a g e Table 2: Sales and use tax expenditures by type Expenditure Summary 4.08200 Sales tax holiday for water-efficient and State FY State FY State FY 2015 2016 2017 1 1 0 energy-efficient purchases (expired October 4, 2015) 4.09100 The sale of prewritten software which has Estimate not available at this been delivered to the purchaser time electronically or by means of load and leave. Sales Tax Exemption for a Specific Purchaser6 4.00100 Sales to Federal Government, State of Estimate not available at this Georgia or a county or municipality in time Georgia or any agency of such governments 4.00600 Sales to any Hospital Authority created by Georgia law Estimate Combined with 4.00700 4.00610 Sales to any Housing Authority created by 2 2 2 Georgia law 4.00620 Sales to local government authorities created 2 2 2 on or after January 1, 1980 for the principal purpose of constructing, owning, or operating a coliseum and related facilities 4.00630 Sales to any agricultural commission created (m) (m) (m) by the Department of Agriculture 4.00700 Sales of tangible personal property and 93 97 101 services to an approved nursing home, inpatient hospice, general hospital or mental hospital when used specifically in the treatment function. 4.00705 Sales of tangible personal property to a non- 1 1 1 profit health center established and receiving funds pursuant to the U.S. Public Health Service Act 4.00710 Sales of tangible personal property and 2 2 2 services to a nonprofit organization whose primary function is to provide services to persons with intellectual disabilities 4.00720 Sales to Georgia Society of the Daughters of (m) (m) (m) the American Revolution 4.00730 Sales of tangible property and services to a 1 1 1 nonprofit volunteer health clinic primarily treating patients with incomes below 200 percent of the poverty level 6 Sales tax exemptions which are defined primarily by the purchaser and not defined, or only generally defined, by the seller or the item being purchased. 166 | P a g e Expenditure 4.00800 4.00900 4.01000 4.01100 4.01900 4.02100 4.03100 4.03600 4.03610 4.04000 Table 2: Sales and use tax expenditures by type Summary Sales of tangible personal property and services to the University System of Georgia and its educational units State FY 2015 35 State FY 2016 36 State FY 2017 37 Sale of tangible personal property and services used exclusively in the educational function of an approved private college or university located in Georgia in which the credits are accepted by the University System of Georgia Estimate not available at this time Sales of tangible personal property and 2 2 2 services used exclusively in the educational function of an approved private elementary or secondary school Sale of tangible personal property or services (m) (m) (m) to, and the purchase of tangible personal property or services by, any educational or cultural institute All tangible personal property purchased outside this state by a nonresident when the property is brought into Georgia upon the nonresident becoming a resident Estimate not available at this time Sales, transfers or exchanges of tangible Estimate not available at this personal property resulting from business time reorganization when the owners, partners, or stockholders maintain the same proportionate interest or share in the newly formed business Sale of tangible personal property Estimate not available at this manufactured or assembled in Georgia for time export when delivery is taken outside of Georgia Machinery and equipment used in a facility (m) (m) (m) for the primary purpose of reducing or eliminating air and water pollution Machinery and equipment used for water Estimate not available at this conservation and incorporated into a time qualified water conservation facility. Sale of major components or repair parts installed in military aircraft, vehicles, or missiles 31 31 24 167 | P a g e Table 2: Sales and use tax expenditures by type Expenditure Summary 4.04100 Sale of tangible personal property and State FY 2015 1 services to a nonprofit child-caring institution, child-placing agency, or maternity home 4.04600 Sale of tangible personal property or taxable 1 services to nonprofit blood banks 4.05720 Exemption for prepared food and food 1 ingredients that are donated to a qualified nonprofit agency and used for hunger relief purposes 4.07100 Sale to or by an organization whose primary (m) purpose is to raise funds for books, materials, and programs for public libraries 4.07600 Exemption for personal property used in the 0 renovation or expansion of an aquarium 4.08700 Sales of tangible personal property used to 0 renovate or expand a zoological institution (expires June 30, 2018) 4.08800 Sale of tangible personal property used in the (m) construction of a qualified civil rights museum (expired July 30, 2015) 4.09300 Sale of tangible personal property used for 21 and in the construction of a competitive project of regional significance, for the period commencing January 1, 2012, until June 30, 2016 4.09600 Exemption for sales or use of construction 0 materials used for or in the construction of buildings at a private college Sales Tax Exemption for a Specific Purchaser of a Specific Item7 4.01400 Sales of art and other artifacts for display or (m) exhibition to museums 4.01510 Sales of pipe organs or steeple bells to any (m) church qualifying as a nonprofit 4.03000 Vehicles purchased by service-connected (m) disabled veterans when the U.S. Dept. of Veterans Affairs supplies a grant to purchase the specially adapted vehicle State FY 2016 1 1 1 (m) 1 0 0 21 (m) (m) (m) (m) State FY 2017 1 1 1 (m) 1 (m) 0 0 0 (m) (m) (m) 7 Sales tax exemptions which are specifically defined by the purchaser as well as the item being purchased. 168 | P a g e Table 2: Sales and use tax expenditures by type Expenditure Summary 4.03200 Aircraft, watercraft, motor vehicles, and State FY State FY State FY 2015 2016 2017 Estimate not available at this other transportation equipment manufactured time or assembled in this State for exclusive use outside Georgia 4.03310 Partial sales tax exemption for jet fuel sold to 21 0 0 or used by a qualifying airline at a qualifying airport 4.04400 Sale of motor vehicles to nonresident Estimate not available at this purchasers when vehicles are immediately time removed from Georgia and titled in another state. 4.05300 Transactions where food stamps or WIC 114 113 113 coupons are used as the method of payment of payment 4.05710 Sales of food and beverages to a qualified 3 3 0 food bank (expires June 30, 2016) 4.06300 Funeral merchandise when paid with funds (m) (m) (m) from the Georgia Crime Victims' Emergency Fund 4.07200 Sale of wheelchairs and attachments for (m) (m) (m) wheelchairs when sold to permanently disabled individuals 4.08600 Sales of engines, parts, equipment and other 20 20 20 tangible personal property used in the maintenance or repair of certain aircraft Sales Tax Exemption for a Specific Seller8 4.00200 Tangible personal property furnished by the Estimate not available at this Federal Government or any county or time municipality used by a contractor in the installation, repair, or extension of any public water, gas, or sewer system. 4.01500 Specific fundraising sales by any religious (m) (m) (m) institution lasting no more than 30 days in a calendar year and sales of religious paper when the paper is owned and operated by the religious institution 4.03800 Sale of tangible personal property and fees (m) (m) (m) and charges for services by the Rock Eagle 4-H center 8 Sales tax exemptions which are defined primarily by the seller and not defined, or only generally defined, by the purchaser of the item being purchased. 169 | P a g e Expenditure 4.03900 4.05600 4.05900 4.90000 Table 2: Sales and use tax expenditures by type Summary Certain sales by a public or private school of tangible personal property, concessions, and tickets for admission to school functions State FY 2015 2 Sale by any qualified nonprofit parent- 1 teacher organization Sale of eligible food and beverages by any 1 Girl or Boy Scout council Sales tax exemption for casual sales 2 State FY 2016 2 1 1 2 State FY 2017 2 1 1 2 170 | P a g e Tables 3-8: Distributional tables of selected provisions Tables 3 through 8 provide information on the distribution across Georgia AGI for several exemptions and deductions from the state individual income tax. Due to a lack of data and for reasons of confidentiality, these tables cannot be produced for other provisions. The data used to produce the tables is from the state individual income tax files for 2013. It has not been adjusted for inflation nor does it reflect any legislative changes that may have occurred since 2013. Column 1 of each table provides the categories of Georgia AGI. Column 2 (Number of Returns) provides the number of returns for each AGI category. Column 3 (Average Value) gives the average value of the tax exemption or deduction taken by filers in each AGI category. Column 4 (Total) provides the total value of the deduction or exemption associated with each AGI category and column 5 (Percent of Total) provides the percent of the total value of the deduction or exemption that falls into that AGI category. Georgia AGI - 2013 GA AGI0 Table 3: Total Personal Exemptions Number of Average Value Total Returns 723,603 $2,303 $1,666,155,600 0$1,000,000 6,380 $10,568 $67,423,000 Total 4,221,125 $26,941,445,500 The percent of total column may not sum to 100 percent due to rounding. Percent of Total 6.2% 33.6% 22.6% 20.6% 16.2% 0.6% 0.3% Table 4: Retirement Exemptions Georgia AGI - 2013 Number of Average Value Total Returns GA AGI0 328,689 $28,148 $9,251,812,016 0$1,000,000 1,378 $71,473 $98,489,328 Total 708,255 $19,658,146,018 The percent of total column may not sum to 100 percent due to rounding. Percent of Total 47.1% 22.5% 10.6% 9.9% 8.7% 0.8% 0.5% 171 | P a g e Table 5: Georgia Higher Education Savings Deduction Georgia AGI - 2013 Number of Average Value Total Returns GA AGI0 1,607 $2,171 $3,488,491 0$1,000,000 275 $4,313 $1,186,123 Total 33,163 $82,242,337 The percent of total column may not sum to 100 percent due to rounding. Percent of Total 4.2% 3.4% 4.2% 14.0% 67.9% 4.7% 1.4% Table 6: Interest on U.S. Obligations Georgia AGI - 2013 Number of Average Value Total Returns GA AGI0 20,121 $12,756 $256,669,261 0$1,000,000 1,020 $6,482 $6,611,464 Total 53,733 $314,590,517 The percent of total column may not sum to 100 percent due to rounding. Percent of Total 81.6% 3.9% 2.5% 3.8% 5.3% 0.9% 2.1% Table 7: Blind and Age 65 Deduction Georgia AGI - 2013 Number of Average Value Total Returns GA AGI0 184,464 $1,843 $340,005,900 0$1,000,000 38 $1,916 $72,800 Total 316,012 $570,150,100 The percent of total column may not sum to 100 percent due to rounding. Percent of Total 59.6% 27.3% 8.2% 4.1% 0.8% 0.0% 0.0% 172 | P a g e Table 8: Standard Deduction Georgia AGI - 2013 Number of Average Value Returns GA AGI0 229,619 $2,581 0$1,000,000 119 $2,863 Total 2,466,465 The percent of total column may not sum to 100 percent due to rounding. Total $592,539,400 $3,283,680,200 $1,445,880,500 $678,835,600 $95,095,500 $468,800 $340,700 $6,096,840,700 Percent of Total 9.7% 53.9% 23.7% 11.1% 1.6% 0.0% 0.0% 173 | P a g e