Georgia Tax Credits

Georgia Tax Credits

Georgia Low Income Housing State Tax Credits

Georgia low income housing tax credits are a dollar-for-dollar credit against the Georgia individual, trust and corporate income tax, as well as Georgia insurance premium taxes and bank taxes. These credits are awarded to developers of low income housing projects. To acquire the credit from a developer, a purchaser must invest in a partnership or LLC taxable as a partnership that either directly or indirectly owns an interest in an eligible low income housing project. The credit is granted over a ten-year period.

MPC warehouses Georgia low income housing credits, offering them for sale to taxpayers in one-year increments. MPC pioneered an approach which allows investors to acquire these credits in single-year allocations from diversified funds of Georgia tax credits. By only acquiring credits for the current year through a diversified fund, taxpayers minimize economic, legislative, and recapture risks while maximizing returns. Most individuals prefer acquiring one-year streams of credits due to the difficulty of forecasting incomes, as well as in an effort to avoid making substantial capital outlays for Georgia tax credits.

Characteristics of Georgia Low Income Housing Credits:

  • Can be utilized by any entity subject to Georgia income tax.
  • Applicable against bank income and franchise taxes and the insurance premium tax.
  • Purchase of credits is deemed an estimated tax paid and is deemed to accrue ratably throughout the tax year like any internally generated tax credit.
  • Credits can be allocated to any partner of a partnership or member of an LLC in any manner.
  • No requirement to comply with federal allocation rules contained in IRC Section 704.

Credit Benefits:

  • Offer savings between 10% and 15% on state tax liabilities.
  • Can be carried forward for three years (credit not to exceed the taxpayer’s Georgia income tax liability).
  • Can be acquired in multi-year strips of credits anywhere in duration from 2 to 10 years.
  • Diversified fund approach greatly mitigates any recapture exposure.

Georgia Film/Entertainment State Tax Credits

Georgia offers film & TV credits ranging from 20-30% of qualified production expenditures, if they exceed $500,000 in a single year. The $500,000 threshold for commercials and videos may be met by combining the costs of more than one project incurred during the year by the production company. Activities qualifying for the credit include movies, television programming, commercials, music videos and digital media creation and some interactive gaming projects.

MPC is the exclusive Georgia film credit distributor for four of the “Big 8” film studios, and other well-recognized television networks, special studio productions and gaming companies. The firm is deeply connected in the film/entertainment business, and can guide any entity through purchasing credits or a production house through selling credits.

Characteristics of Georgia Film/Entertainment Credits:

  • Can be purchased by any entity to apply against corporate or individual income taxes.
  • Credits belonging to a pass-through entity having no income tax liability may be passed to its members, shareholders or partners based on the year ending profit/loss percentage.
  • Credits belonging to a pass-through entity having no income tax liability may be passed to its members, shareholders or partners based on the year ending profit/loss percentage.
  • Can only be transferred one time.
  • Purchase of credits is deemed an estimated tax paid.
  • Credit buyers receive federal taxes paid deduction for purchased film credits and must recognize a capital gain equal to the discount from face value of the credit.

Credit Benefits:

  • Unused credits can be carried forward up to five years if credits exceed liabilities.

Georgia Historic Rehabilitation State Tax Credits

GA’s state historic rehabilitation tax credit program is modeled after the federal one, and was intended to facilitate private investment in projects that were costlier, riskier, and harder to finance than new construction, but which were important to the history and economic revitalization of their surrounding communities. Completed projects have brought renewed life to deteriorated business and residential districts, created new jobs and new housing units, increased local and state revenues, and helped ensure the long-term preservation of irreplaceable cultural resources.

Characteristics of Georgia Historic Rehabilitation Credits:

  • Can be applied against corporate and individual income taxes, as well as any other tax imposed pursuant to Chapter 7 of Title 48 of OCGA.
  • Purchase of credits is deemed an estimated tax paid and is deemed to accrue ratably throughout the tax year like any internally generated tax credit.
  • Credits can be allocated to any partner of a partnership or member of an LLC in any manner.

Credit Benefits:

  • Unused credits can be carried forward for up to 10 years.