Georgia State and Local Tax (SALT) Alerts – October 2021

• The Georgia Tax Tribunal has affirmed assessments against taxpayers arising from disallowed net operating loss (NOL) deductions and interest. The Tribunal determined that the statute of limitations properly bars the remainder of the taxpayers’ refund that could have resulted if the taxpayers had carried an NOL back to 2013 within the allotted time. Initially, the taxpayers didn’t carry back the NOL on their Georgia tax return, even though they did so on their federal return. They’re required to carry back the NOL because they carried it back on their federal return, but the statute of limitations had expired when the amended state return was filed. (Dkt. No. 2034378)
• The Georgia Tax Tribunal has ruled that a Georgia-based nonprofit is eligible to claim the Georgia Quality Jobs Tax Credit (QJTC) and that the credit could apply to new quality jobs that don’t produce unrelated business income. In this case, the taxpayer didn’t file corporate income tax returns or pay corporate income tax. As a nonprofit, the taxpayer filed state exempt organization business tax returns and claimed the QJTC on its state income tax return. The Tax Tribunal noted that the statute allowing the QJTC doesn’t contain limitation language that requires the filing of corporate income tax returns to be eligible for the QJTC. (Dkt. No. TAX-CIT-200300)
• The Georgia Dept. of Revenue has posted its 2022 Employer’s Tax Guide, which includes new withholding tax tables to be used in 2022. The guide notes that the supplemental wage rate on bonuses and other compensation is: 2% (under $8,000), 3% ($8,001 to $10,000), 4% ($10,001 to $12,000), 5% ($12,001 to $15,000) and 5.75% (over $15,000). Georgia residents are subject to withholding tax laws of the state in which they work. If that state doesn’t require withholding, tax should be withheld and paid to Georgia. Employers should honor properly completed Forms G-4, “Employee’s Withholding Allowance” unless notified by the department.
• The Georgia Tax Tribunal has affirmed assessments against a taxpayer for sales and use tax liability. However, the tribunal ruled that it had no jurisdiction to set aside the assessment because of the alleged violation of the Due Process Clause and Commerce Clause of the U.S. Constitution for transactions printed and shipped from outside Georgia and into Georgia. Under the Georgia Tax Tribunal rules, a tribunal judge isn’t authorized to resolve constitutional challenges, but a tribunal judge may, in his or her discretion, make findings of fact relating to such challenges. (Dkt. No. 1823543)
• Georgia Governor Brian Kemp announced that Georgia’s September 2021 net tax collections totaled nearly $2.82 billion, an increase of $655 million, or 30.3%, compared to last year when net tax collections totaled $2.16 billion. Year-to-date and through the end of one quarter, net tax revenue collections totaled $7.10 billion, for an increase of $903.7 million, or 14.6%, compared to fiscal year 2021.
• The Georgia Dept. of Revenue has issued guidance on the reporting requirements for high-technology companies that have claimed a computer equipment exemption. High-technology companies must provide a list to the department of the amount of taxes exempted during the preceding year. The report is due by March 31 of each year following the year the high-technology company used a certificate of exemption. The department won’t issue a certificate of exemption for the calendar year following the reporting year to any high-technology company that has failed to comply with the reporting required.
• For the month of September, the Georgia Dept. of Revenue reports that individual income tax collections totaled $1.42 billion, an increase of $165.9 million, or 13.2%, compared to fiscal year 2021. Notably, individual income tax refunds issued (net of voided checks) fell by $15 million, or 17%, from fiscal year 2021. In addition, individual income tax return payments increased by $30.2 million, or 88.1%, from fiscal year 2021.
• Gross sales and use tax collections totaled nearly $1.3 billion in September, for an increase of $198.5 million, or 18.1%, over fiscal year 2021. Net sales and use tax increased by $334.6 million, or 104.8%, compared to fiscal year 2021, when net sales tax revenue totaled just $319.2 million. Note that fiscal year 2021 net sales tax collections were lower due to a one-time audit adjustment to restate previously incorrect sales tax allocations for returns captured during an extensive audit review period completed last fall.

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