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

25 LC 39 4528 House Bill 365 By: Representatives Jasperse of the 11 th, McDonald III of the 26 th, Smith of the 138 th, Campbell of the 171st, and Hagan of the 156th A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to the imposition, rate, and computation of and exempt ions and credits from state2 income taxes, so as to create a temporary income tax credit for certain expenditures relating3 to projects promoting industrial infrastructure enhancement and connectivity; to provide for4 definitions; to provide for eligibility approval by the Department of Community Affairs; to5 provide for limitations upon such tax credit; to authorize the sale or transfer of unused6 credits; to provide for an aggregate annual limit; to provide f or terms and conditions; to7 provide for rules and regulations; to provide for automatic rep eal; to provide for related8 matters; to provide for a short title; to provide for an effect ive date and applicability; to9 repeal conflicting laws; and for other purposes.10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:11 SECTION 1.12 The Act shall be known and may be cited as the "Strategic Indus trial Development13 Enhancement (SIDE) Tax Credit Act."14 H. B. 365 - 1 - 25 LC 39 4528 SECTION 2.15 Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the16 imposition, rate, and computation of and exemptions and credits from state income taxes, is17 amended by revising Code Section 48-7-40.35, which is reserved, as follows:18 "48-7-40.35.19 (a) As used in this Code section, the term:20 (1) 'Eligible entity' means an entity incorporated and located in this state with a qualified21 project which has been approved by the Department of Community Affairs.22 (2) 'Qualified economic development expenditures' means expend itures made by an23 eligible entity for costs for improvements to land and construction costs for a qualified24 project and the purchase of machinery and any equipment necessa ry for such25 improvements or construction.26 (3) 'Qualified initial infrastructure expenditures' means expenditures made by an eligible27 entity for new rail infrastructure and improvements for the provision of rail service to a28 qualified project, including, but not limited to, right-of-way acquisition, engineering29 services, rehabilitation of existing inactive tracks to reinstate operation, construction of30 new tracks, loading dock improvements, and transloading structures.31 (4) 'Qualified project' means a project that:32 (A) Is expected to provide substantial economic benefits and result in job creation;33 (B) Is located within an industrial park or economic development zone or adjacent to34 a terminal or switching of a railroad; and35 (C) Has been approved by the Department of Community Affairs in accordance with36 rules and regulations promulgated pursuant to this Code section.37 (5) 'Railroad' means a common carrier classified as a railroad by the United States38 Surface Transportation Board in accordance with Section 1-1 of 49 C.F.R. 1201, as it39 existed on January 1, 2025.40 H. B. 365 - 2 - 25 LC 39 4528 (b) An eligible entity shall be allowed a credit against the tax imposed by this article for41 a taxable year in an amount equal to 10 percent of its qualifie d economic development42 expenditures and 50 percent of its qualified initial infrastructure expenditures. The credit43 given under this subsection shall be available for each taxable year beginning on or after44 January 1, 2026, and ending on or before December 31, 2031.45 (c) The tax credit allowed under subsection (b) of this Code section shall be subject to the46 following conditions and limitations:47 (1) The aggregate amount for qualified economic development ex penditures shall not48 exceed $8 million per qualified project;49 (2) The aggregate amount for qualified initial infrastructure expenditures shall not50 exceed $4 million per qualified project; and51 (3) The aggregate amount for a combination of qualified econom ic development52 expenditures and qualified initial infrastructure expenditures shall not exceed $8 million53 per qualified project.54 (d) In no event shall the amount of tax credits allowed pursua nt to this Code section55 exceed $75 million in aggregate for a taxable year.56 (e)(1) The total amount of the tax credits allowed pursuant to this Code section for a57 taxable year shall not exceed the taxpayer's income tax liability.58 (2) Tax credits claimed pursuant to this Code section but not used in any taxable year59 may be carried forward for three years from the close of the ta xable year in which the60 credits are claimed.61 (3) Any tax credits earned by a taxpayer under this Code section and previously claimed62 but not used by such taxpayer against its income tax may be transferred or sold in whole63 or in part by such taxpayer to another Georgia taxpayer up to three years from the date64 the credit was earned and subject to the maximum total limits provided by subsection (c)65 of this Code section.66 H. B. 365 - 3 - 25 LC 39 4528 (f) The Department of Community Affairs shall develop rules an d regulations for67 application and approval of a project as a qualified project el igible for the tax credits68 authorized under this Code section, provided that applications for approval as a qualified69 project shall include a description of the project, project location, detailed project costs, and70 a summary of expected economic benefits and job creation. Applications approved by the71 Department of Community Affairs shall be submitted to the state revenue commissioner.72 (g) The state revenue commissioner shall develop such rules an d regulations as are73 necessary to implement and administer this Code section.74 (h) This Code section shall stand repealed and reserved on January 1, 2032. Reserved."75 SECTION 3.76 This Act shall become effective upon its approval by the Governor or upon its becoming law77 without such approval and shall be applicable to taxable years beginning on or after78 January 1, 2026.79 SECTION 4.80 All laws and parts of laws in conflict with this Act are repealed.81 H. B. 365 - 4 -