Last month the Fiscal Research Center (FRC) completed four tax preference evaluations for the State of Georgia. These analyses were requested by the Senate Finance Committee and the House Ways and Means Committee to examine the financial and economic impacts of several major tax preferences in Georgia to see if they work as lawmakers intended—stemming from 2021 legislation that allows the tax-writing committees to request evaluations as a way to ensure more fiscal accountability. Since then, the General Assembly has selected up to 10 preferences for review each year.
FRC’s recent evaluations can be found on the website of the Georgia Department of Audits and Accounts:
The Film Tax Credit (O.C.G.A. §48-7-40.26) was enacted in 2005 to promote investment in film, television, and digital media projects. Currently, the credit is available to production companies with a minimum of $500,000 in qualified spending in Georgia. Companies can apply for and receive a credit for 20 percent of eligible production expenditures with an additional 10 percent available to companies that offer Georgia marketing opportunities.
Non-profit Hospital Exemptions
Non-profit hospitals (NPHs) are 501(c)(3) entities exempt from federal income tax. Federal nonprofit status requires these private hospitals to provide benefits to their community, including charity care and community health improvements. In Georgia, NPHs are exempt from three state and local taxes: income tax, sales and use tax, and property tax. The exemptions are intended to incentivize the hospitals to invest in the healthcare needs of low-income individuals. Every state allows at least one of these exemptions, and 29 other states allow all three.
Social Security Benefit Exemption
Since the federal government began taxing a portion of Social Security benefits in 1984, Georgia has provided an exclusion of those benefits from any state income taxes. Under federal law, monthly retirement, survivor, and disability payments are subject to taxation. Federal taxation (and therefore the state exemption) begins at benefits exceeding $25,000 for a single individual and $32,000 for those married filing jointly. Georgia is one of 32 states that fully exempts Social Security benefits from state income tax (another eight states have no state income tax).
The Other State Tax Credit (O.C.G.A. § 48-7-28) allows Georgia residents to claim a credit against their state income tax liability in proportion to the amount of their income earned and taxed in another state. Residents can claim the lesser of either a) the amount of tax paid to the other state(s) or b) the prorated share of the resident’s income earned in the other state compared to the resident’s Georgia taxable income. Similar provisions to prevent double taxation of income are common in most states. The credit has existed in its current form since 1987, though similar provisions have existed in Georgia law since 1933.
