Tax exemptions save money, and Georgia tax exemptions can save lots of money. If you’re in the business of manufacturing or distribution, or if you have a data center or certain kind of high-tech company, you may qualify for state tax exemptions from Georgia and its communities.
Contact Info: To get help expanding or relocating a business in Georgia, contact the Georgia Department of Economic Development or call 404.962.4000.
To get help with specific tax questions for a business in Georgia, contact the Georgia Department of Revenue
Georgia exempts sales and use taxes on a wide range of expenditures made by manufacturers. These include purchases of the following if they are integral to the manufacturing process:
- Machinery and equipment
- Repair and replacement parts
- Molds, dies and waxes
- Raw materials
- Packaging for sale or shipment
- Other needed supplies.
The purchase of energy — again, when it’s necessary and integral to the manufacturing process – is also exempt, except for the portion dedicated to education (1% in almost all counties).
Many Georgia counties and municipalities exempt local property tax at 100% for manufacturers’ in-process or finished goods inventory held for 12 months or less. Georgia’s companies pay no state property tax on inventory or any other real or personal property.
Distribution centers investing a minimum of $5 million in a new or expanded facility are eligible for sales and use tax exemptions on machinery and equipment used to handle, move or store tangible personal property.
If your distribution center has inventory (of finished goods) that you plan to ship within the next year, most counties and cities in Georgia won’t charge you any property tax.
Data Centers and High-Tech Companies
Georgia offers two possible ways for data centers to qualify for sales and use tax exemptions on qualifying purchases.
1. New (signed into law May 2018): Co-located data centers and single-user data centers that invest $100 million to $250 million in a new facility may qualify for a full sales and use tax exemption on eligible expenses, which include
- equipment under current data center exemption (explained below) and
- computers, emergency backup generators, air handling units, cooling towers, energy storage or energy efficiency technology and many other items.
(Note: The minimum required investment in the new facility is tied to the population of the county in which the data center locates.)
2. Georgia also has a full sales and use tax exemption on certain computer equipment purchased by high-tech companies that invest a minimum of $15 million in qualifying equipment.
- To be eligible, the company must be classified under certain relevant North American Industry Classification System (NAICS) codes, which include single-user data centers (but not co-located data centers), software publishers, computer systems design, certain telecommunications firms, financial transaction processing facilities and R&D centers.