HB 365: Strategic Industrial Development Enhancement (SIDE) Tax Credit Act; enact

This bill creates the Strategic Industrial Development Enhancement (SIDE) Tax Credit Act, adding a new tax credit to Georgia's income tax code (O.C.G.A. § 48-7-40.35). Companies that build or improve qualified industrial projects, ones expected to create jobs and located in industrial parks, economic development zones, or near rail terminals, could get a credit worth 10 percent of qualified economic development costs and 50 percent of qualified rail infrastructure costs, once the Department of Community Affairs approves the project. The credit is capped at $8 million per project for economic development costs and $4 million per project for rail infrastructure, with a combined per-project cap of $8 million. Statewide, no more than $75 million in credits could be claimed in any single year. Unused credits can be carried forward three years or sold to other Georgia taxpayers. The credit applies to tax years from January 1, 2026 through December 31, 2031, after which the law repeals itself.

• Creates a new Georgia income tax credit for companies that spend money improving land, buildings, or equipment for approved industrial projects.
• Adds a bigger tax credit, 50 percent of costs, for building or upgrading rail infrastructure connected to those projects.
• Requires the Department of Community Affairs to approve any project as 'qualified' before a company can claim the credit.
• Caps total credits at $75 million statewide per year and sets per-project dollar limits on both types of expenditures.
• Allows companies to carry forward unused credits for three years or sell/transfer them to other Georgia taxpayers.
• Automatically repeals the tax credit program on January 1, 2032.

Georgia-incorporated businesses developing industrial projects in industrial parks, economic development zones, or near railroad terminals; the Department of Community Affairs, which must approve projects and write rules; the Georgia Department of Revenue, which administers the credit; and other Georgia taxpayers who might buy transferred credits.

Companies building qualifying industrial or rail projects could significantly lower their state tax bills, potentially encouraging new construction and job creation near rail lines and industrial parks, while the state caps its total exposure at $75 million a year through 2031.

• Section 2 adds new Code Section 48-7-40.35 defining 'eligible entity,' 'qualified project,' and other terms tied to the credit.
• Subsection (b) sets the credit at 10 percent of qualified economic development expenditures and 50 percent of qualified initial infrastructure expenditures for tax years 2026 through 2031.
• Subsection (c) caps per-project credits at $8 million for economic development costs, $4 million for infrastructure costs, and $8 million combined.
• Subsection (d) limits total statewide credits to $75 million per tax year.
• Subsection (e) allows unused credits to carry forward three years or be sold/transferred to other Georgia taxpayers.
• Subsection (f) requires Department of Community Affairs approval of projects, including project description, costs, and expected job creation, before submission to the state revenue commissioner.
• Subsection (h) automatically repeals the entire Code section on January 1, 2032.
• Section 3 makes the law effective upon the Governor's signature and applicable 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 projects
• state income tax