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Georgia Department of Community Affairs (DCA)

Regional Economic Assistance Projects (REAP)

General Description The purpose of Regional Economic Assistance Projects (REAP) is to provide a mechanism for local and state governments and the private sector to cooperate on large-scale tourism-related projects with multiple uses that will crate jobs and enhance the local tax base. Regional Economic Assistance Projects will assist in producing growth and development, particularly in rural areas, resulting in additional local tax revenue and providing high-caliber employment opportunities in the tourism and hospitality industries. Additional benefits include sound project development, consistent governmental review and approval, responsible project implementation, and project monitoring and reporting. Upon meeting the requirements of the statute and the REAP Rules, including local government endorsement and certification by the Georgia Department of Community Affairs, a developer of a certified REAP project may apply to the Georgia Department of Revenue for a state license for the sale of malt beverages, wine or distilled spirits by the drink for consumption on the premises only. Eligibility Requirements In order to receive REAP certification, a project, in combination with any adjacent facility included by a reciprocal use agreement, must (a) be not less than 250 acres in size or located on or adjacent to a lake of not less than 2,500 acres in size, (b) where required, have zoning which is appropriate to the planned uses and plans which are consistent with other land use regulations, and (c) provide for at least three of the following criteria (a project that does not include an adjacent facility subject to a reciprocal-use agreement need only meet two of the criteria): (i) one or more regulation 18-hole golf courses, with a clubhouse providing food service, (ii) a commercial boat marina with at least 300 boat slips and a facility providing food service, (iii) a full-service restaurant with minimum seating for 75 or more persons, (iv) at least 100 residential units, (v) at least 200 rooms for overnight stays, (vi) conference facilities with capacity for 150 participants, or (vii) be located in a county in which a state-operated facility or authority provides services or products, or both, to the general public. The facilities of a REAP that meet the above criteria, excluding residential units, must have public access. Eligible Applicants Developers of projects that meet the REAP criteria are eligible to apply. Developer means an individual or organization that manages the development or maintenance of a project and is duly authorized to act as a representative of the project in a capacity such as a general partner, owner, or officer. Application Requirements In addition to the application requirements detailed in the REAP application package, an applicant for REAP certification must also provide (1) a resolution from the appropriate local government indicating that the project appears to meet the criteria set out in the Statute (specifically, O.C.G.A. section 50-8-191(c)) and approving the project and submission of the application to the Department for review and possible certification; and (2) a nonrefundable applications and processing fee of $5,000. Deadlines Developers may submit a REAP application at any time. It is strongly recommended that potential applicants contact DCA prior to submitting an application. Reporting Requirements Pursuant to the REAP Rules, developers are required to submit annual progress reports in the form prescribed by DCA.

For information on REAP contact:
Susan Arrington Brown
Georgia Department of Community Affairs
60 Executive Park South, NE
Atlanta, GA 30329-2231
(404) 327-6841
sarringt@dca.state.ga.us



Georgia Business Expansion and Support Act (BEST)

Job Tax Credits (See related map: Qualified Census Tracts) Provides for a statewide job tax credit for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries, but does not include retail businesses. If other requirements are met, job tax credits are available to businesses of any nature, including retail businesses, in counties recognized and designated as the 40 least developed counties. Counties and certain census tracts in the state are ranked and placed in economic tiers using the following factors: highest unemployment rate; lowest per capita income; and highest percentage of residents whose incomes are below the poverty level. The City of Atlanta is part of Fulton County, a Tier 2 county. Companies in the City of Atlanta creating 15 or more jobs may receive a $2,500 tax credit plus $500 from the Joint Authority’s participation. For Atlanta companies located in “less developed census tracts”, that create 5 or more jobs, may receive credits of $3,500 plus $500 from the Joint Authority participation are potentially available. The credit amounts listed above are applicable to new jobs created on or after January 1, 2001. Jobs created prior to January 1, 2001 are calculated at the credit amounts in place at the time the jobs were created. Note that average wages for the new jobs must be above the average wage of the county that has the lowest average wage of any county in the state. Also note that employers must make health insurance available to employees filling the new full-time jobs. Employers are not, however, required to pay all or part of the cost of such insurance unless this benefit is provided to existing employees. Credits are allowed for new full-time employee jobs for five years in years two through six after the creation of the jobs. In “less developed census tracts”, the total credit amount may offset up to 100% of a taxpayer’s state income tax liability for a taxable year. In other parts of the City, businesses are eligible for credits available as part of Fulton County - the total credit amount may offset up to 50% of a taxpayer’s state income tax liability for a taxable year. A credit claimed but not used in any taxable year may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established. The measurement of new full-time jobs and maintained jobs is based on average monthly employment. Georgia counties are re-ranked annually based on updated statistics. For further information on job tax credits contact: Steed Robinson Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, GA 30329-2231 (404) 679-4825 srobinso@dca.state.ga.us Also see: (404) 679-1585 www.dca.state.ga.us/economic/taxcredit.html

Retraining Tax Credit
The retraining tax credit allows some employers to claim certain costs of retraining employees to use new equipment, new technology, or new operating systems. The credit can be worth 50% of the direct costs of retraining full-time employees up to $500 per employee per approved retraining program per year. The credit cannot be more than 50% of the taxpayer’s total state income tax liability for a tax year. Credits claimed but not used may be carried forward for 10 years.
For further information on retraining tax credits contact:

Mike Grundmann
Georgia Department of Technical and Adult Education
75 Fifth Street, NW, Suite 400
Atlanta, Georgia 30308
(404) 253-2822

Headquarters Tax Credits
Companies establishing their headquarters or relocating their headquarters to Georgia may be entitled to a tax credit if the following criteria are met:

1. headquarters is defined as the principal central administrative offices of a company;
2. new jobs created at a new headquarters must be full-time (as defined by law and regulation) and must pay above the average wage for Tier 1 counties, at least 105% of the average wage for Tier 2 counties, at least 110% of the average wage for Tier 3 counties, and at least 115% of the average wage for Tier 4 counties;
3. within one year, a company must invest $1 million and create 50 jobs at a new headquarters facility; and
4. the company must elect not to take the job or investment tax credits. The credit is equal to $2,500 annually per new full-time job or $5,000 if the average wage of the new full-time jobs is 200% or more of the average wage of the county in which the new jobs are located. The credits apply for five years beginning with the year in which jobs are placed in service. The credit may be taken against Georgia income tax liability with any excess credit applied against a company’s withholding taxes. Credits may be carried forward for 10 years. Other requirements include:

• no new full-time jobs created after seven years from the close of the taxable year in which the taxpayer first becomes eligible for the credit may receive credits; and
• the number of new full-time jobs shall be determined by comparing the monthly average of full-time jobs subject to Georgia income tax withholding for the taxable year with the corresponding average for the prior taxable year.

Investment Tax Credits
A taxpayer must choose either the regular or optional investment tax credit. Once this election is made, it is irrevocable. A taxpayer that has operated an existing manufacturing or telecommunications facility or manufacturing or telecommunications support facility for the previous three years (36 months) may obtain a credit against income tax liability as follows.

• Companies expanding in Fulton County must invest $50,000 to receive a 1% credit. That credit increases to 3% for recycling, pollution control, and defense conversion activities.
• Taxpayers in the City of Atlanta qualifying for the investment tax credit may choose an optional 6% investment tax credit.

The credit may be claimed for 10 years, provided the qualifying property remains in service throughout that period.

The optional investment tax credit is calculated based upon a three-year tax liability average. The annual credits are then determined using this base year average. The credit available to the taxpayer in any given year is the lesser of the following amounts:

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

Generally, a taxpayer may not take both the job tax credits and the investment tax credit for the same project.


Child Care Credits
Employers who provide or sponsor child care for employees are eligible for a tax credit of up to 75% of the employers’ direct costs. The credit cannot be more than 50% of the taxpayer’s total state income tax liability for that taxable year. Any credit claimed but not used in any taxable year may be carried forward for five years from the close of the taxable year in which the cost of the operation was incurred. In addition, employers who purchase qualified child care property will receive a credit totaling 100% of the cost of such property. The credit is claimed at the rate of 10% a year for 10 years. The qualified property credit may be carried forward for three years from the close of the taxable year in which the qualified property is placed in service, and the limitation on the use of the credit in any one year is 50%. Recapture provisions apply if the property is transferred or committed to a use other than child care within 14 years after the property is placed in service. These two child care credits can be combined.

Research & Development Tax Credits
A tax credit is allowed for research expenses for research conducted within Georgia for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. The credit shall be 10% of the additional research expense over the “base amount,” 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. The credit may be carried forward 10 years but may not exceed 50% of the business’s remaining Georgia net income tax liability after all other credits have been applied for the current year. (Note that the base amount must contain positive Georgia taxable net income for all years.)

Small Business Growth Companies Tax Credits
A tax credit is granted for any business or the headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries having a Georgia net taxable income in the current year which is 20% or more above that of the preceding year if its net taxable income in each of the two preceding years was also 20% or more. The credit shall be the excess over 20% of the percentage growth and shall not exceed 50% of the business’s remaining Georgia net income tax liability after all other credits have been applied for the current year. The credit is available to companies whose total tax liability does not exceed $1.5 million.

Ports Activity Job Tax & Investment Tax Credits
Businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development that have increased their port traffic tonnage through Georgia ports during the previous 12-month period by more than 10% over their 1997 base year port traffic, or by more than 10% over 75 net tons, five containers or 10 20-foot equivalent units (TEU’s) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. NOTE: Base year port traffic must be at least 75 net tons, five containers, or 10 TEU’s. If not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEU’s as the base. Companies must meet Business Expansion and Support Act (BEST) criteria for the county in which they are located.
The job tax and investment tax credits for Fulton County and the City of Atlanta is an additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit.

The additional job tax credits are limited to 50 percent of the taxpayer’s Georgia net income tax liability in the current year regardless of the tier in which the jobs are located. The investment tax credit taken under the port traffic provision is limited to 50 percent of the taxpayer’s net income tax liability. Any unused job or investment tax credit may be carried forward for ten years from the close of the taxable year in which the qualified jobs were established or the qualified property was placed in service. The optional investment tax credit taken under the port traffic provision shall be claimed for up to ten taxable years, provided the qualifying property remains in service throughout that period.

Companies that create 400 or more new jobs, invest $20 million or more in new and expanded facilities, and increase their port traffic by more than 20% above their base year port traffic may take both job tax credits and investment tax credits.

For further information on income tax credits related to headquarters, investment, child care, Research and Development small business and ports activity, contact:

Pamela Goshay
Georgia Department of Revenue
1800 Century Center Boulevard, Room 15318
Atlanta, Georgia 30345
(404) 417-2441
Pamela.Goshay@DOR.GA.GOV
Also see: www2.state.ga.us

Sales and Use Tax Exemption

Manufacturing Provides for an exemption from the sales and use tax for: Machinery used directly in the manufacture of tangible personal property when the machinery is bought to replace or upgrade machinery in a manufacturing plant presently existing in the state and machinery components which are purchased to upgrade machinery used directly in the manufacture of tangible personal property in a manufacturing plant; Machinery used directly in the manufacture of tangible personal property when the machinery is incorporated as additional machinery for the first time into a manufacturing plant presently existing in this state; Machinery which is used directly in the manufacture of tangible personal property when the machinery is incorporated for the first time into a new manufacturing plant located in this state; Machinery used directly in the remanufacture of aircraft engines, parts, and components on a factory basis; The sale or use of repair or replacement parts, machinery clothing or replacement machinery clothing, molds or replacement molds, dies or replacement dies, and tooling or replacement tooling for machinery used directly in the manufacture of tangible personal property in a manufacturing plant presently existing in this state. This exemption has been phased in over a 5-year period beginning on January 1, 2001 at 20% of the purchase price per year with a limitation of $150,000 per part; Overhead materials consumed in the performance of certain contracts between the Department of Defense or NASA and a contractor engaged in manufacturing (this exemption has been phased in at a 25% increment rate each year from January 1, 1997 to January 1, 2004); and The sale of machinery, equipment, and materials incorporated into and used in the construction or operation of a clean room of Class 100 or less in Georgia, provided that such clean room is used directly in the manufacture of tangible personal property. Computer Equipment The sale or lease of computer equipment to be used at a facility or facilities in this state to any high-technology company classified under certain NAICS Codes where such sale of computer equipment exceeds $15 million for any calendar year, or, where in the event of a lease of such computer equipment, the fair market value of such leased computer equipment exceeds $15 million for any calendar year. ^ back to top Primary Materials Handling Purchases of primary material handling equipment and racking systems that are used directly for the storage, handling, and moving of tangible personal property in a new or expanding warehouse or distribution facility when such new facility or expansion is valued at $5 million or more and does not have greater than 15% retail sales are exempt from sales and use taxes. ^ back to top Electricity Electricity purchased that interacts directly with a product being manufacture is exempt from sales taxes when the total cost of the electricity exceeds 50% of the cost of all materials used, including electricity, in making the product. This exemption requires a utility study to document the conditions of the exemption. For further information on sales and use tax exemptions, contact:

For further information on sales and use tax exemptions, contact:

Andrea Shepard
Georgia Department of Revenue
1800 Century Center Boulevard, Room 15310
Atlanta, Georgia 30345
(404) 417-6656
Andrea.Shepard@DOR.GA.GOV
Also see www2.state.ga.us

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Georgia Environmental Protection Division (EPD)

Brownfields Redevelopment
(See related map: Brownfield Sites)

EPD assists interested parties in the redevelopment of abandoned, or underutilized contaminated commercial and industrial sites throughout Georgia. With the passing of the Hazardous Site Reuse and Redevelopment Act, buyers of these types of properties are offered a limitation of liability for certain preexisting environmental conditions during redevelopment. Additional incentives and assistance are also available for brownfield redevelopment projects.

For further information on these unique economic development opportunities, contact:

Madeleine Kellam, Georgia EPD
(404) 657-8645/(888) 373-5947
www.dnr.state.ga.us./dnr/environ
or
Mac Brown, University of Georgia
(706) 583-8284

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Georgia Department of Natural Resources

State Historic Preservation Tax Incentives
This incentive program is designed to encourage rehabilitation of both residential and commercial historic buildings that might otherwise be neglected. These rehabilitated buildings not only increase property values for owners, but eventually increase tax revenues for local governments.

Rehabilitated Historic Property Tax Assessment Freeze:
The law provides an owner of historic property which has undergone substantial rehabilitation on an eight-year freeze on property tax assessments. For the ninth year, the assessment increases by 50% of the difference between the recorded first year value and the current fair market value. In the tenth and following years the tax assessment will then be based on the current market value.

The preferential assessment and classification of rehabilitated historic property include the rehabilitated building, and not more than two acres of real property surrounding the building.

To Be Eligible:

The property must be listed or qualify for listing in the Georgia Register of Historic Places or the National Register of Historic Places, either individually, or as a contributing building within a historic district. Work must meet rehabilitation standards and be completed within two years.

Requirements for Preferential Assessment:

The rehabilitation project must meet a substantial rehabilitation test. The county tax assessor makes this determination.

If the property is:

Residential: (owner-occupied residential property) – rehabilitation must increase the fair market value of this building by at least 50%. Mixed-use: (primarily residential and partially income-producing property) – rehabilitation must increase the fair market value of the building by at least 75%. Commercial and Profession Use: (income producing property) – rehabilitation must increase the fair market value of the building by at least 100%.

The property owner must obtain preliminary and final certification on the project from the Historic Preservation Division (HPD) of the Georgia Department of National Resources (DNR). Rehabilitation must be in accordance with DNR’s Standards for Rehabilitation.

Certification Process:
This incentive program is carried out by the Historic Preservation Division of the Georgia Department of Natural Resources and by your county tax assessor. The application process has two parts. Part A (preliminary certification) documents that the building is historic property and that the proposed work meets DNR standards. Part A preferably should be filed before the work begins. Part B (final certification) documents the finished work.

The DNR-approved Part A application must be filed with the county tax assessor to begin the assessment freeze period. From that filing date, an applicant has 24 months to complete the work and file DNR-approved Part B application with the county tax assessor to continue the property assessment freeze.

HPD can provide technical assistance and encourages communication with our office. Additional information, tax application forms, and instructions are available from HPD upon request.

The Historic Preservation Division of DNR serves as the state historic preservation office. Working in a partnership with the U.S. Department of the Interior, the state preservation office carries out the mandates of Georgia law and the National Historic Preservation Act, as amended, and works with local communities to preserve the historic, architectural and archaeological resources of Georgia.

For more information on Georgia’s historic preservation programs, contact the Historic Preservation Division (HPD) at (404) 656-2840 or on the web at www.gashpo.org

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Foundation: Our mission is to assist cities in their efforts to revitalize and enhance downtown areas by serving as a partner and facilitator in the funding of capital projects throughout Georgia.

The Georgia Cities Foundation (GCF) is a non-profit subsidiary of the Georgia Municipal Association (GMA). Its purpose is to serve as a partner and facilitator in the funding of downtown capital projects throughout Georgia.

The Foundation Board Members: Members of the Board are appointed by the GMA Board of Directors. The Foundation's Board is comprised of key leaders who share a commitment to promoting sustainable development in downtown areas throughout Georgia.

Revolving Loan Fund Program

Application and Selection Process Applications may be submitted at anytime to the Foundation. GMA and Foundation staff will review applications to determine if the project tits the overall objectives of the Foundation and economic impact on the community. Applications will be evaluated based on leadership, accountability, long-term sustain- ability and potential for private investment. Projects should encourage spin-off development, add jobs, promote downtown housing or add to the cultural enrichment of the community.

Loan Amount and Terms:

Loan amounts will not exceed $250,000 per project Interest Rate: Below Market Rate Repayment Period: Generally not to exceed 15 years. Security: Project collateral.

Eligibility
A loan from the Foundation to the municipality's Downtown Development Authority (DDA) or similar entity.

Eligible Projects
Funds may be used for such activities as real estate acquisition, building rehab, construction, green space, parks and historic downtown city halls and courthouses.

Ineligible Uses of Funds
Operating expenses and administration, local revolving loan funds, public infrastructure projects streetscapes, facade projects and certain governmental buildings including public safety and public works facilities.

Application
For an application, contact the Foundation at 404-688-0472 or toll free at (888) 488-4462.
Visit us at: www.georgiacitiesfoundation.org

For information, contact:

201 Pryor Street SW
Atlanta, GA 30303
Phone 404 688 0472
Fax: 678 686 6289
www.georgiacitiesfoundation.org or www.gmanet.com

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