Starting a Business in Georgia
Over 1 million small businesses call the Peach State their home. These businesses are the life-force driving the Georgia economy despite companies like Delta, UPS, and the Home Depot calling it home. Many Georgia companies are able to thrive due to factors such as a strong labor market, local communities that support their businesses, a common sense regulatory environment (no unnecessary business licenses), and a multitude of diverse industries. Some of the largest industries in Georgia are in Insurance, Education, Financial products, Aerospace, Health services, Logistics, Construction, and Agribusiness. Companies that make Georgia their home will benefit from a vast assortment of incentives. The most common incentives are given through tax credits and exemptions.
STEPS TO STARTING A BUSINESS IN GEORGIA
Once you start a business in Georgia, some of the first things you will need to do before looking into incentive programs are performing a Georgia business name search and forming a company with the Georgia Secretary of State. Administrative policies governing the rules of entity formation are set by the Georgia Secretary of State. The Georgia Department of Revenue regulates tax collection through the GTC system. After you have formed a company, there are some other important tasks you will want to complete. In order to avoid mistakes by filing a form ST-5 by hand, registering for a Georgia Sales and Use Tax Number online is a better option. It will allow you to collect and remit sales tax by looking up your local Georgia sales tax rate. The last major compliance issue you will have to deal with is getting the correct Georgia Business Licenses you need to operate. With all of these activities, doing your due diligence beforehand is crucial.
Many brick and mortar businesses in Georgia have expanded their operations to include online sales. This has given them the ability to reach customers outside of the state, but also given them the added burden of multi-state sales tax collection. If you fall in this category you should be aware that sales made into other states may classify you as a remote seller, in which case you may be responsible for sales tax liabilities. If so, you can register for an SST streamlined sales tax certificate for Georgia. Once you have completed all other legal requirements, you can look at the following enticing incentives that businesses can take advantage of in Georgia:
- Georgia offers various types of job credit programs aimed at incentivizing companies to create jobs in the state. The Employers Job Tax Credit program is available to businesses in many industries such as warehousing and distribution, tourism, and manufacturing. With this program:
- The company can receive up to $4,000 in credits per year for up to 5 years for every qualified job created.
- The amount of the credit received is awarded on a tier system and is based on the company’s geographic location.
- The credit can be taken against a company’s income tax or withholding tax.
- Any unused credit can be carried forward for up to 10 years.
- A separate credit that can be used in conjunction with the Employer’s Job Credit is the Port Credit. It allows a Georgia company that can increase its merchandise volume by at least 10% through Georgia ports to take an additional $1,250 credit.
- Another job program that Georgia offers is the Employee Retraining Program. It allows the employer to take the 50% of the direct costs of training with a cap of $1,250 per employee for a successfully completed retraining program.
- The Quality Jobs Tax Credit is a program allowing companies to take the credit based on the percentage pay above the average wage in whatever county they are located in. The credit amount is $2500-$5000 based on a tiered system for every qualified job per year.
- In order to stimulate growth for Georgia’s film industry, the state offers the Film Tax Credit which allows production companies to deduct up to 30% of production costs spent in Georgia. A minimum investment of $500,000 is required.
- Georgia offers a Sales Tax Exemption to qualified agricultural and manufacturing companies. The agricultural exemption applies to State Sales Tax as well as some local taxes. An agricultural company should apply for a Georgia Sales Tax Exemption Certificate through the commissioner of agriculture. The agricultural exemption applies to State Sales Tax as well as some local taxes. A certificate of exemption can be applied for through the Georgia Department of Revenue.
- The Georgia Sales Tax Exemption for manufacturing incentive offers qualified manufacturing businesses an exemption on machinery or equipment used in the manufacturing process. All of this equipment is exempt from Sales and Use Tax with the use of an exemption certificate. In order to get the exemption certificate, you must first register for a sales tax number. Data centers can also qualify for sales tax abatement by investing at least $15 million.