News & Events
Reapplication Provision enacted for Georgia Clean Energy Property Credit (HB1069, 2010)
October 1, 2010
As enacted in 2008 by House Bill 670, the Georgia Clean Energy Property Credit allowed for up to $2.5 million in tax credit for each of the years 2008 through 2012 for certain types of investments in renewable energy and energy efficiency. the credit was available on a first come first served basis based on applications filed after the qualifying investment was installed.
Now in the third of five years, the credit was fully subscribed early in the year. This put taxpayers in a position of having to wait to install qualifying investments until after January 1 of the following year, or to forego the credit. Furthermore, with applications filed after installation, a taxpayer was not sure that the credit would be available when making the decision to invest.
House Bill 1069 helps to remedy these problems with a provision that allows taxpayers that filed applications after the credit was gone in one year (beginning in 2010), to reapply the subsequent year for the project and get priority. For example, if an application was denied a credit in 2010 because the credit was capped, the taxpayer can now reapply for the same project in January of 2011 and get priority for the 2011 credit. Preciously, the project was not eligible for 2011 credit because it was installed in 2010.
House Bill 1069 also enacts a new credit for energy and water efficient equipment that is limited based on federal funding becoming available. This credit equals 25% of qualifying costs up to $2,500.
Text of the legislation is available here: http://www.legis.state.ga.us/legis/2009_10/fulltext/hb1069.htm .
New Angel Investor Tax Credit enacted in Georgia (HB1069, 2010)
October 1, 2010
Georgia has a new tax credit for Angel Investments made in 2011, 2012 and 2013. The credit is available against Georgia individual income tax for 35% of a qualifying equity or subordinated debt investment up to a maximum credit of $50,000. However, the credit may not be claimed until 2 years after the year the investment is made. There is also an annual state wide cap on the credit of $10 million – if the credit is oversubscribed, credits will be reduced below 35% on a pro-rata basis to meet the cap. This credit is not refundable or transferable, but does carry forward for 5 years from when the investment was made.
To qualify for this credit, an investor must be an accredited investor under SEC guidelines. Individuals or certain flow through entities organized for investing may qualify.
In order to accept qualifying investments, a company must go through a registration process to verify that it is a “qualifying business”. The following are requirements to be a qualifying business:
- Must be a corporation, LLC, or partnership organized in the past 3 years headquartered in Georgia (and headquarters must be maintained in Georgia for the two years until the credit is claimed).
- Must have fewer than 20 employees, annual revenue of less than $500,000, and no more than $1 million in equity or debt raised (not counting certain commercial loans)
- Must be in one of the following qualifying industries:
- manufacturing,
- processing,
- online and digital warehousing,
- online and digital wholesaling,
- software development,
- information technology services,
- research and development, or
- a business providing services other than the following specifically excluded industries: (i) Retail sales;
(ii) Real estate or construction;
(iii) Professional services;
(iv) Gambling;
(v) Natural resource extraction;
(vi) Financial, brokerage, or investment activities or insurance; or
(vii) Entertainment, amusement, recreation, or athletic or fitness activity for which an admission or membership is charged. - Must not have utilized the Georgia Entertainment/Film Credit
Hiring Incentives to Restore Employment (HIRE) Act Signed
March 26, 2010
President Obama signed the HIRE Act into law last week. This Act provides tax incentives for employers that hire unemployed workers from February 3, 2010 through the end of the year. The hiring incentives come in two parts: a FICA tax exemption, and a retention credit.
FICA Exemption: Under the HIRE Act, an employer will be exempt from paying the employer's share of FICA (6.2% of wages up to $106,800) in 2010 for qualifying employees. Qualifying employees are those that are hired after February 3, 2010 and sign an affidavit stating that they have not worked more than 40 hours in the 60 days prior to being hired. The IRS has indicated that an affidavit form will be made available for this purpose.
For the second, third and fourth quarters of 2010, the exemption will be claimed on quarterly 941 forms. For the first quarter of 2010, 941 forms should be filed as though the exemption were not in place, and a credit will be provided for the amount of the exemption on the second quarter 941.
Retention Credit: The retention credit is an additional benefit employers can claim for employees that qualify for the FICA exemption, and that are subsequently retained for a full year from their hire date. The credit is up to $1000.
Feel free to contact us at 770-461-2308 if you have any questions about these new tax incentives. We will be contacting our WOTC processing clients to discuss integrating the affidavit process with WOTC screening.
GEFA Grant Awarded for Lighting Retrofits
February 12, 2010
Outlaw Consulting, Inc. was awarded a grant to administer lighting retrofits in convenience stores state wide in partnership with the Georgia Association of Convenience Stores (GACS) and Energy & Environment, LLP (E&E). Georgia Environmental Facilities Authority (GEFA) announced the 16 recipients of their Competitive Grants back in January. GEFA received more than 125 applications for funding derived from "Stimulus" funds of the American Recovery & Reinvestment Act (ARRA), which made the selection process very competitive.
Outlaw Consulting was one of only 16 grant recipients, and has chosen E&E as the contractor to deliver retrofit services. According to Ed Outlaw, President of Outlaw Consulting, "we chose E&E because they have the service capacity we need for this project, and they deliver high quality service that is competitively priced. Our experience is that E&E also thinks outside the box when approaching retrofits, making sure we get the best possible return on investment."
The award is a $450,000 grant which will finance lighting retrofit projects at convenience stores throughout the state. The retrofits will focused on rapid payback energy efficiency improvements such as lighting retrofits. Savings generated by the projects will go back into the fund, effectively establishing a revolving fund to finance projects chosen in an annual competitive process administered in partnership with GACS for at least three years. The program is expected to generate over $1 million in projects and even greater energy savings to small businesses in Georgia over the same period. This program is in-line with the President Obama's call for greater national energy efficiency and a partner program to the Governor's Energy Challenge. This project is slated to commence in late Spring 2010.