Last month the Public Finance Research Cluster’s Fiscal Research Center (FRC) completed three 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:
Georgia’s bank tax credit offsets special occupation taxes levied on financial institutions by cities and counties. Local governments may impose a tax of up to 0.25 percent on gross receipts, as well as a minimum annual tax of no more than $1,000 a year. O.C.G.A. § 48-7-29.7 provides a credit against the banks’ state income tax liability that is equal to 100% of these local taxes. The credit is not refundable, but unused portions can be carried forward up to five years.
Georgia exempts purchases of jet fuel from state sales and use taxes (O.C.G.A. § 28-5-41.1). The jet fuel exemption began as a temporary suspension by executive order in July 2018, but the tax was suspended indefinitely by General Assembly action in a November 2018 special session.
Global Intangible Low-taxed Income (GILTI)
GILTI is a tax on the foreign earnings of U.S. multinational corporations that exceed a certain threshold. It targets income derived from intangible assets such as intellectual property and business processes. GILTI was established as part of the federal Tax Cuts and Jobs Act of 2017, and Georgia opted not to tax GILTI. This exclusion is considered a tax expenditure.
