HB365: HB365 Strategic Industrial Development Enhancement (SIDE) Tax Credit Act; enact

Georgia law currently has no tax credit for companies that invest in rail connections and infrastructure to support industrial projects. This bill fills in a previously reserved section of Georgia's tax code (O.C.G.A. § 48-7-40.35) to create the Strategic Industrial Development Enhancement (SIDE) Tax Credit. An approved company, called an eligible entity, could claim a credit equal to 10 percent of qualified economic development expenses like land improvements, construction, and machinery, and 50 percent of qualified rail infrastructure expenses like new track construction or right-of-way purchases. Projects must be approved by the Department of Community Affairs and generally must sit in an industrial park, economic development zone, or near a railroad terminal. The credit applies to tax years from January 1, 2026 through December 31, 2031, after which the program automatically repeals. Unused credits can carry forward three years or be sold to another Georgia taxpayer, and the whole program is capped at $75 million per year statewide.

• Creates a new state income tax credit for approved industrial projects covering rail infrastructure and facility improvement costs.
• Requires the Department of Community Affairs to approve projects as 'qualified' before a company can claim the credit.
• Sets per-project caps of $8 million for economic development expenses and $4 million for rail infrastructure expenses, with a combined $8 million cap.
• Caps the total credits available statewide at $75 million per tax year.
• Allows unused credits to be carried forward for three years or sold/transferred to another Georgia taxpayer.
• Automatically repeals the entire tax credit program on January 1, 2032.

Companies that build or expand industrial facilities and rail connections in Georgia, particularly those located in industrial parks, economic development zones, or near railroad terminals; the Department of Community Affairs, which must approve projects; and the state revenue commissioner, who administers the credit and any credit transfers.

Companies investing in rail lines, loading docks, or facility construction for qualifying industrial projects could significantly lower their state tax bills, potentially making Georgia more attractive for such investments, while the state limits its total exposure to $75 million per year through 2031.

• Section 1 names the bill the 'Strategic Industrial Development Enhancement (SIDE) Tax Credit Act.'
• Section 2 rewrites O.C.G.A. § 48-7-40.35 to define 'eligible entity,' 'qualified economic development expenditures,' 'qualified initial infrastructure expenditures,' 'qualified project,' and 'railroad.'
• Subsection (b) sets the credit at 10 percent of economic development expenditures and 50 percent of rail infrastructure expenditures for tax years 2026 through 2031.
• Subsection (c) caps credits at $8 million for economic development costs, $4 million for infrastructure costs, and $8 million combined per project.
• Subsection (d) sets a $75 million annual statewide cap on total credits allowed.
• Subsection (e) limits credits to a taxpayer's tax liability for the year, allows a three-year carryforward, and permits selling or transferring unused credits to another Georgia taxpayer.
• Subsection (f) directs the Department of Community Affairs to create rules for project applications, including project descriptions, costs, and expected economic benefits.
• Subsection (h) repeals the entire Code section on January 1, 2032, and Section 3 makes the Act effective upon the Governor's approval, applying to tax years beginning on or after January 1, 2026.

1. 2025-02-12House Second Readers (House)
2. 2025-02-11House First Readers (House)
3. 2025-02-10House Hopper (House)

• Rick Jasperse (R, HD-011)Primary sponsor
• Lauren McDonald (R, HD-026)
• Vance Smith (R, HD-138)
• Joe Campbell (R, HD-171)
• Leesa Hagan (R, HD-156)

• tax credits
• economic development
• rail infrastructure
• industrial development
• Georgia income tax