What is the Headquarters Tax Credit?
In an effort to bring more businesses to Georgia, the Georgia Department of Economic Affairs created the Headquarters Tax Credit to encourage companies to establish or relocate their companies here, and so far, their strategy has worked well. In recent years major companies like NCR, Mercedes Benz, and Porsche have moved to Georgia to take advantage of this and other tax credits. According to CNN Money NCR received around $60 million in tax incentives. Mercedes Benz received $23 million while Porsche took advantage of about $14 million in tax credits. NCR, Mercedes Benz, Porsche and other companies have brought thousands of jobs to Georgia while lowering their operating costs.
In order to qualify for this credit companies must:
- Create at least 50 jobs within their headquarters
- Spend at least $1 million in construction, renovation, leasing or other costs related to establishing or relocating within 1 year of the company’s first hire
- Pay a fixed percentage of the average county wage where the job is located. The fixed percentage of the average county wage depends on the county tier (please see Changes for Georgia Job Tax Credit for more on Tiers)
3 Major Benefits of the Headquarters Tax Credit:
- Companies can claim credit for jobs created in the first year throughout the 5th year of the company and continue to claim newly created jobs through the 7th year, plus the credits generated on each of those newly created jobs over a five year period.
- The credit is equal to $2,500 annually per new full-time job meeting the wage requirement of $5,000.
- Companies can offset 100% of their Georgia income tax liability in the taxable year. If the amount of credits exceeds the company’s tax liability, then that company can use the extra credits against quarterly or monthly withholding taxes.
If think your company qualifies for this tax credit or even if you’re not sure, call us at 855-On- TRACS or email us at email@example.com and we’ll talk it over with you.