Dougherty, Terrell, Baker remain Tier 1 for job tax credits

EDITOR’S NOTE: Second part of a continuing series.

LEESBURG — The Georgia Department of Community Affairs released its annual tiered ranking for tax credits recently.

These rankings are based on a variety of data points from the previous year’s American Community Survey. Data in the survey are used to determine job tax credits in a four-tiered ranking that is then used to identify less-developed census tracts and military zones. These rankings are in turn used to determine which credit incentives are available to encourage economic development in these communities.

As required by law, the commissioner of community affairs must use the data provided by the Department of Labor and United States Department of Commerce to rank all 159 counties in the state using the following weighted factors: the highest unemployment rate for the most recent 36-month period; the lowest per capita income for the most recent 36-month period, and the highest percentage of residents whose incomes are below the poverty level according to the most recent data available.

Counties that rank among the 75 least developed are recognized as Tier 1. Counties ranking as the 76th- through 106th-least developed are classified as Tier 2. Counties ranking between 107th through 141st are classified as Tier 3, and counties ranking between 142nd through the 159th are classified as Tier 4.

The ranking determines eligibility for job tax credits, “which may be used against Georgia income taxes for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, research and development industries, or services for the elderly or persons with disabilities that create and maintain sufficient numbers of new full-time jobs.” (In the 40 least developed counties, and certain specially designated areas, job tax credits are available to businesses of any nature, including retail businesses.)

This year, several Southwest Georgia counties are listed as Tier 1 including Dougherty (16), Terrell (36) and Baker (65). A ranking in Tier 1 requires at least two net new jobs to be eligible for a tax credit of $3,500 per job. Worth County (91) is in Tier 2, which requires at least 10 net new jobs to be eligible for a credit of $2,500 per job. A Tier 3 ranking requires 15 net new jobs to be eligible for a credit of $1,250 per job. Lee County’s ranking in Tier 4 requires at least 25 net new jobs to be eligible for a credit of $750 per job.

Acknowledging that a change in an annual ranking could impact the decision of a business to locate in a given county, an appendix of counties making a positive tier change or a county leaving the “Bottom 40” is provided. Businesses that are currently planning to locate in these communities may file a Notice of Intent prior to March 31. This allows them to preserve the 2020 job tax credit rating.

The designation of Military Zones, where one or more census tracts with pervasive poverty (15% or higher poverty rate) adjacent to a federal military installation with a garrison of at least 5,000 federal or military personnel combined with an industrial park operated by a governmental entity may be eligible for the job tax credits.

COVID-19 changes were considered under House Bill 846 signed into law by Gov. Brian Kemp on June 30, 2020, allowing, “businesses that were already claiming the JTC under any designation in tax year 2019 to apply their 2019 employee count for the tax years beginning 2020 or 2011 or choose to continue calculating their credit as in prior years based on the number of net new full-time employee jobs that the taxpayer added during tax year (for both 2020 and 2021).”

Further, the Bill also allows personal protective equipment (PPE) manufacturers an additional $1,250 in credit for jobs created as a supplement to the regular JTC claimed. Such term shall not include retail businesses that sell PPE. The PPE manufacturer must also claim the regular JTC under any designation (tier, Opportunity Zone, Less Developed Census Tract, and/or Military Zone) in order to claim the supplemental credit.

Special Photo: Nam Y. Huh