We are frequently asked which entity can utilize the Georgia tax credits. This becomes confusing with mergers, acquisitions, tax structure changes, and other complexities. Here are some basic things to keep in mind:

• Operating entity: where is the company's operation? If it is a manufacturing company, which tax entity buys the raw materials and pays the employees and other related costs? For example, a real estate entity that leases land and buildings to a manufacturing entity cannot utilize the investment tax credit because it does not manufacture (even though both entities are owned by the same equity owners).
• C corporations: Georgia Form 600 allows the tax credits to be assigned to another "affiliated entity." This can only be done in the current year and NOT amended returns. Assigning tax credits does not apply to pass-through entities that file Form 600S or 700.
• Tax structure conversion (that is, change tax structure, but keep the same EIN)

1. From C to S: tax credits carried forward by a C corporation can be distributed to S corporation equity owners via K-1 after the conversion.
2. From S to C: tax credits carried forward by equity owners cannot be assigned to the C corporation after the conversion.

• Blockers, roll-ups, tuck-ins, investment vehicles, and other complexities: check with Pamela Goshay at DOR (click here).

Well, the Legislature wrapped it up last night, and your clients' tax credits stayed pretty much the same, with a few minor improvements for some of your clients.  Here's a summary: 

HB 868 (click here) -  With the House agreeing to Senate changes, legislation modifying job incentives and tax credit programs now heads to Governor Deal for his signature.    

• For the Job Tax Credits, expanded eligible industries to include biomedical manufacturing and alternative energy products.  Also reduced job creation threshold in Tier 1 counties from 5 to 2.
• For Quality Jobs Tax Credits, expanded use to include military contractors.
• For R&D Tax Credits, allows all companies that qualify for the credit to use the payroll withholding provision. 
• For the Port Tax Credit Bonus, allows the Bonus to be used in Less Developed Census Tracts, Military Zones and Opportunity Zones.    

HB 386 (click here) - Although not directly affecting tax credits, another bill included some more goals of the Governor's Competitiveness Initiative: 

• Elimination of the state sales tax on energy used for manufacturing, mining, and agriculture
• Discretion in granting sales tax exemptions for construction of regionally significant projects
• Clarification of Georgia's current on-line sales tax laws to include purchases from out-of-state companies, leveling the playing field for Georgia-based businesses 

So after all the meetings, committees, speeches, lobbying, arm-twisting, and smoke-generation -- NO FIRE!  We end up with a set of pretty minor tweaks to Georgia's economic development policies.  But your clients can feel some relief -- another session has ended with no harm done!      

Some important healthcare program deadlines have been delayed again -- here is a quick update:

HIPAA 5010: Was March 31,2012, now delayed until June 30, 2012 (click here)

ICD-10: Was October 1, 2013, now delayed until ??? "Health and Human Services will announce a new compliance date moving forward." (click here)

Meaningful Use: CMS and ONC intends to finalize the Stage 2 rules by midyear 2012. Stage 2 will begin in 2014 (click here )