---
title: HB 8. Income tax credit; certain investments in qualified businesses; renew and revise
collection: bills
id: 2025-2026/hb8
cite_as: HB 8, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb8
md_url: https://georgiacommons.org/bills/2025-2026/hb8.md
text_url: https://georgiacommons.org/bills/2025-2026/hb8/text
source_url: https://www.legis.ga.gov/legislation/69288
date: 2025-01-15
status: introduced
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
up: https://georgiacommons.org/bills/2025-2026.md
previous: https://georgiacommons.org/bills/2025-2026/hb7.md
next: https://georgiacommons.org/bills/2025-2026/hb9.md
index: https://georgiacommons.org/bills/index.md
omitted: votes and history
omitted_chars: 129
omitted_url: https://georgiacommons.org/bills/2025-2026/hb8.md?full=1
bill_number: HB 8
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-01-13
last_action: House Second Readers
sponsors:
- Dar'shun Kendrick
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB8/2025
upstream_id: 1916667
summaries_model: claude-sonnet-5
topic_tags:
- income tax credits
- small business investment
- startup funding
- angel investor tax credit
- Georgia tax policy
---
# HB 8. Income tax credit; certain investments in qualified businesses; renew and revise
## Text
House Bill 8
By: Representative Kendrick of the 95th
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to
income taxes, so as to renew and revise an income tax credit for certain investments in
qualified businesses; to remove the requirement that the investment be made by a qualified
investor; to provide for an aggregate cap; to allow such credit to be transferred; to provide
a reporting requirement; to provide for definitions; to provide for sunset; to provide for an
effective date and applicability; to provide for related matters; to repeal conflicting laws; and
for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,
is amended by revising Code Section 48-7-40.30, relating to tax credits for certain qualified
investments for limited period of time, as follows:
"48-7-40.30.
(a) The General Assembly finds that entrepreneurial businesses significantly contribute
to the economy of this state. The intent of this Code section is to achieve the following:
(1) To encourage individual investors to invest in early stage, innovative, wealth-creating
businesses;
(2) To enlarge the number of high quality, high paying high-paying jobs within this state
both to attract qualified individuals to move to and work within this state and to retain
young people educated in Georgia's universities and colleges;
(3) To expand the economy of Georgia by enlarging its base of wealth-creating
businesses; and
(4) To support high-growth business and other businesses seeking to commercialize
technology invented in Georgia's universities and colleges.
(b) As used in this Code section, the term:
(1) 'Allowable credit' means the credit as it may be reduced pursuant to paragraph (3) of
subsection (i) of this Code section.
(2) 'Headquarters' means the principal central administrative office of a business located
in this state which conducts significant operations of such business.
(3) 'Investor' means:
(A) A person who is a resident of this state or a nonresident who is obligated to pay
taxes imposed by this chapter; or
(B) A pass-through entity which is formed for investment purposes, has no business
operations, has committed capital under management of equal to or less than $5 million,
and is not capitalized with funds raised or pooled through private placement
memoranda directed to institutional investors. A venture capital fund or commodity
fund with institutional investors or a hedge fund shall not qualify as an investor.
(3)(4) 'Net income tax liability' means income tax liability reduced by all other credits
allowed under this chapter.
(4)(5) 'Pass-through entity' means a partnership, an S-corporation, or a limited liability
company taxed as a partnership.
(5)(6) 'Professional services' means those services of a profession specified in
paragraph (2) of Code Section 14-7-2 or any service which requires as a condition
precedent to the rendering of such service the obtaining of a license from a state licensing
board pursuant to Title 43.
(6)(7) 'Qualified business' means a registered business that:
(A) Is either a corporation, limited liability company, or a general or limited
partnership located in this state;
(B) Was organized no more than three years before the qualified investment was made;
(C) Has its headquarters located in this state at the time the investment was made and
has maintained such headquarters for the entire time the qualified business benefited
from the tax credit provided for pursuant to this Code section;
(D) Employs 20 or fewer people in this state at the time it is registered as a qualified
business;
(E) Has had in any complete fiscal year before registration gross annual revenue as
determined in accordance with the Internal Revenue Code of $500,000.00 or less on a
consolidated basis;
(F) Has not obtained during its existence more than $1 million in aggregate gross cash
proceeds from the issuance of its equity or debt investments, not including commercial
loans from chartered banking or savings and loan institutions;
(G) Has not utilized the tax credit described in Code Section 48-7-40.26;
(H) Is primarily engaged in manufacturing, processing, online and digital warehousing,
online and digital wholesaling, software development, information technology services,
or research and development or is a high-growth business providing services other than
those described in subparagraph (I) of this paragraph; and
(I) Does not engage substantially in:
(i) Retail sales;
(ii) Real estate or construction;
(iii) Professional services;
(iv) Gambling;
(v) Natural resource extraction;
(vi) Financial, brokerage, or investment activities or insurance; or
(vii) Entertainment, amusement, recreation, or athletic or fitness activity for which
an admission or membership is charged.
A business shall be substantially engaged in one of the above activities listed in
subparagraph (H) or (I) of this paragraph if its gross revenue from such activity exceeds
25 percent of its gross revenues in any fiscal year or it is established pursuant to its
articles of incorporation, articles of organization, operating agreement, or similar
organizational documents to engage in such activity as one of its primary purposes.
(7)(8) 'Qualified investment' means an investment by a qualified an investor of cash in
a qualified business for common or preferred stock or an equity interest or a purchase for
cash of qualified subordinated debt in a qualified business; provided, however, that funds
constituting a qualified investment cannot have been raised or be raised as a result of
other tax incentive programs. Furthermore, no investment of common or preferred stock
or an equity interest or purchase of subordinated debt shall qualify as a qualified
investment if a broker fee or commission or a similar remuneration is paid or given
directly or indirectly for soliciting such investment or purchase. Investment of common
or preferred stock or an equity interest or a purchase of qualified subordinated debt that
contains or involves a broker fee or commission or a similar remuneration paid or given,
directly or indirectly, for soliciting such investment or purchase shall qualify as a
qualified investment. However, the investor shall be allowed the tax credit under this
Code section only on the amount of the direct investment in the qualified investment and
not on the broker fees or commissions or similar remunerations paid or given, directly or
indirectly, for soliciting such investment or purchase.
(8) 'Qualified investor' means an accredited investor as that term is defined by the United
States Securities and Exchange Commission who is:
(A) An individual person who is a resident of this state or a nonresident who is
obligated to pay taxes imposed by this chapter; or
(B) A pass-through entity which is formed for investment purposes, has no business
operations, has committed capital under management of equal to or less than $5 million,
and is not capitalized with funds raised or pooled through private placement
memoranda directed to institutional investors. A venture capital fund or commodity
fund with institutional investors or a hedge fund shall not qualify as a qualified investor.
(9) 'Qualified subordinated debt' means indebtedness that is not secured, that may or may
not be convertible into common or preferred stock or other equity interest, and that is
subordinated in payment to all other indebtedness of the qualified business issued or to
be issued for money borrowed and no part of which has a maturity date less than five
years after the date such indebtedness was purchased.
(10) 'Registered' or 'registration' means that a business has been certified by the
commissioner as a qualified business at the time of application to the commissioner.
(c) A qualified business shall register with the commissioner for purposes of this Code
section. Approval of such registration shall constitute certification by the commissioner
for 12 months after being issued. A business shall be permitted to renew its registration
with the commissioner so long as, at the time of renewal, the business remains a qualified
business.
(d) Any individual person making a qualified investment directly in a qualified business
in the 2011, 2012, 2013, 2014, 2015, 2016, 2017, or 2018 calendar year shall be allowed
a tax credit of 35 percent of the amount invested against the tax imposed by this chapter
commencing on January 1 of the second for the taxable year following the year in which
the qualified investment was made as provided in this Code section.
(e) Any pass-through entity making a qualified investment directly in a qualified business
in the 2011, 2012, 2013, 2014, 2015, 2016, 2017, or 2018 calendar year shall be allowed
a tax credit of 35 percent of the amount invested against the tax imposed by this chapter
commencing on January 1 of the second for the taxable year following the year in which
the qualified investment was made as provided in this Code section. Each individual who
is a shareholder, partner, or member of an entity shall be allocated the credit allowed the
pass-through entity in an amount determined in the same manner as the proportionate
shares of income or loss of such pass-through entity would be determined. If an
individual's share of the pass-through entity's credit is limited due to the maximum
allowable credit under this Code section for a taxable year, the pass-through entity and its
owners may not reallocate the unused credit among the other owners.
(f) Tax credits claimed pursuant to this Code section shall be subject to the following
conditions and limitations:
(1) The qualified investor shall not be eligible for the credit for the taxable year in which
the qualified investment is made but shall be eligible for the credit for the second taxable
year beginning after the qualified investment is made as provided in subsection (d) or (e)
of this Code section;
(2) The aggregate amount of credit allowed an individual for one or more qualified
investments in a single taxable year under this Code section, whether made directly or by
a pass-through entity and allocated to such individual, shall not exceed $50,000.00;
(3)(2) In no event shall the amount of the tax credit allowed an individual under this
Code section for a taxable year exceed such individual's net income tax liability. Any
unused credit amount shall be allowed to be carried forward for three years from the close
of the taxable year in which the qualified investment was made. No such credit shall be
allowed against prior years' tax liability;
(4)(3) The qualified investor's basis in the common or preferred stock, equity interest,
or qualified subordinated debt acquired as a result of the qualified investment shall be
reduced for purposes of this chapter by the amount of the allowable credit; and
(5) The credit shall not be transferrable transferable by the qualified investor except to
the heirs and legatees of the qualified investor upon his or her death and to his or her
spouse or incident to divorce.
(4) Any tax credit earned and previously claimed but not used against its income tax may
be transferred or sold, in whole or in part, by the investor to another Georgia taxpayer.
(g) The registration of a business as a qualified business shall be subject to the following
conditions and limitations:
(1) If the commissioner finds that any of the information contained in an application of
a business for registration under this Code section is false, the commissioner shall revoke
the registration of such business. The commissioner shall not revoke the registration of
a business solely because it ceases business operations for an indefinite period of time,
as so long as the business renews its registration;
(2) A registration as a qualified business may not be sold or otherwise transferred, except
that, if a qualified business enters into a merger, conversion, consolidation, or other
similar transaction with another business and the surviving company would otherwise
meet the criteria for being a qualified business, the surviving company retains the
registration for the 12 month registration period without further application to the
commissioner. In such a case, the qualified business must shall provide the
commissioner with written notice of the merger, conversion, consolidation, or similar
transaction and such other information as required by the commissioner; and
(3) The commissioner shall report to the House Committee on Ways and Means and the
Senate Finance Committee each year all of the businesses that have registered with the
commissioner as a qualified business. The Such report shall include the name and
address of each business, the location of its headquarters, a description of the types of
business in which it engages, the number of jobs created by the business during the period
covered by the report, and the average wages paid by these such jobs.
(h) Any credit claimed under this Code section shall be recaptured in the following
situations and shall be subject to the following conditions and limitations:
(1) If within two years after the qualified investment was made, the qualified investor
transfers any of the securities or qualified subordinated debt received in the qualified
investment to another person or entity, other than a transfer resulting from one of the
following:
(A) The death of the qualified investor;
(B) A transfer to the spouse of the qualified investor or incident to divorce; or
(C) A merger, conversion, consolidation, sale of the qualified business's assets, or
similar transaction requiring approval by the owners of the qualified business under
applicable law, to the extent the qualified investor does not receive cash or tangible
property in such merger, conversion, consolidation, sale, or other similar transaction;
(2) Except as provided in paragraph (1) of this subsection, if within five years after the
qualified investment was made, the qualified business makes a redemption with respect
to the securities received or pays any principal of the qualified subordinated debt;
(3) If within two years after the qualified investment was made, the qualified investor
participates in the operation of the qualified business. For the purpose purposes of this
paragraph, a qualified an investor participates in the operation of a qualified business if
the qualified investor, or the qualified investor's spouse, parent, sibling, or child, or a
business controlled by any of these individuals, provides services of any nature to the
qualified business for compensation, whether as an employee, a contractor, or otherwise.
However, a person who provides uncompensated professional advice to a qualified
business, whether as an officer, a member of the board of directors or managers or
otherwise, or participates in a stock or membership option or stock or membership plan,
or both, shall be eligible for the credit;
(4) The amount of the credit recaptured shall apply only to the qualified investment in
the particular qualified business in which the investment was made;
(5) The amount of the recaptured tax credit determined under this subsection shall be
added to the qualified investor's income tax liability for the taxable year in which the
recapture occurs under this subsection; and
(6) In the event the credit is recaptured because the qualified business ceases business
operations, dissolves, or liquidates, the qualified investor may claim either the credit
authorized under this Code section or any capital loss the qualified investor otherwise
would be able to claim regarding that qualified business, but shall not be authorized to
claim and be allowed both.
(i)(1) A qualified An investor seeking to claim a tax credit provided for under this Code
section shall submit an application to the commissioner for tentative approval of such tax
credit between September 1 and October 31 of the year for which the tax credit is claimed
or allowed. The commissioner shall promulgate the rules and forms on which the
application is to be submitted. Amounts specified on such application shall not be
changed by the qualified investor after the application is approved by the commissioner.
The commissioner shall review such application and shall tentatively approve such
application upon determining that it meets the requirements of this Code section.
(2) The commissioner shall provide tentative approval of the applications by the date
provided in paragraph (3) of this subsection as follows:
(A) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2011 calendar year and claimed and
allowed in the 2013 taxable year shall not exceed $10 million in such year;
(B) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2012 calendar year and claimed and
allowed in the 2014 taxable year shall not exceed $10 million in such year;
(C) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2013 calendar year and claimed and
allowed in the 2015 taxable year shall not exceed $10 million in such year;
(D) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2014 calendar year and claimed and
allowed in the 2016 taxable year shall not exceed $5 million in such year;
(E) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2015 calendar year and claimed and
allowed in the 2017 taxable year shall not exceed $5 million in such year;
(F) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2016 calendar year and claimed and
allowed in the 2018 taxable year shall not exceed $5 million in such year;
(G) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2017 calendar year and claimed and
allowed in the 2019 taxable year shall not exceed $5 million in such year; and
(H) The total aggregate amount of all tax credits allowed to qualified investors or
pass-through entities for investments made in the 2018 calendar year and claimed and
allowed in the 2020 taxable year shall not exceed $5 million in such year.
The aggregate amount of tax credits allowed pursuant to this Code section shall not
exceed $5 million in a calendar year.
(3) The commissioner shall notify each qualified investor of the tax credits tentatively
approved and allocated to such qualified investor by December 31 of the year in which
the application was submitted. In the event that the credit amounts on the tax credit
applications filed with the commissioner exceed the maximum aggregate limit of tax
credits under this subsection, then the tax credits shall be allocated among the qualified
investors who filed a timely application on a pro rata basis based upon the amounts
otherwise allowed by this Code section. Once the tax credit application has been
approved and the amount approved has been communicated to the applicant, the qualified
investor may then apply the amount of the approved tax credit to its tax liability for the
tax year for which the approved application applies.
(j) The commissioner shall report annually to the House Committee on Ways and Means
and the Senate Finance Committee on the percentage of tax credits for the previous taxable
year utilized under this Code section.
(k) The commissioner shall promulgate any rules and regulations necessary to implement
and administer this Code section.
(l) This Code section shall stand repealed and reserved on December 31, 2031."
SECTION 2.
This Act shall become effective on July 1, 2025, and shall be applicable to taxable years
beginning on or after such date.
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.
## Summaries written by Georgia Commons
The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.
House Bill 8 would renew and rework Georgia's tax credit for investors who put money into small, early-stage companies, dropping the requirement that investors be wealthy 'accredited' investors and letting the credit be sold to other taxpayers.
### Plain-language summary
Georgia currently has an income tax credit under O.C.G.A. § 48-7-40.30 meant to encourage investment in small, early-stage 'qualified businesses,' but the credit's rules were tied to specific years (2011-2018) and have effectively expired. This bill rewrites that Code section to revive the credit going forward. It removes the old requirement that an investor be a 'qualified investor' (an SEC-defined accredited investor), replacing it with a broader definition of 'investor' that includes any Georgia resident or nonresident taxpayer, or certain small investment pass-through entities.
The bill keeps the 35 percent tax credit for cash investments in qualifying small businesses, but changes when it can be claimed (the same taxable year the investment is made rather than two years later), caps total statewide credits at $5 million per calendar year instead of the old year-by-year sliding caps, and allows investors to transfer or sell unused credits to other Georgia taxpayers instead of only to family. It also adds annual reporting to the legislature on credit usage and sets the whole program to expire on December 31, 2031. The changes take effect July 1, 2025, and apply to taxable years beginning on or after that date.
### What it does
- Removes the requirement that an investor be an SEC-defined 'accredited investor,' replacing it with a broader definition covering any Georgia taxpayer or qualifying small investment entity.
- Caps the total amount of tax credits allowed statewide under this program at $5 million per calendar year, replacing the old declining year-by-year caps from $10 million down to $5 million.
- Allows investors to transfer or sell unused, previously claimed tax credits to any other Georgia taxpayer, instead of only to a spouse or heirs.
- Changes the timing of the credit so investors can claim it for the same taxable year the investment was made, instead of waiting until the second following year.
- Requires the state revenue commissioner to report annually to the House Ways and Means Committee and Senate Finance Committee on how much of the credit was used.
- Sets the entire tax credit program to expire (sunset) on December 31, 2031.
### Who it affects
Individual investors and small pass-through investment entities who put money into early-stage Georgia companies, the small businesses seeking that investment (especially manufacturing, software, and technology firms), and state agencies including the Department of Revenue and legislative finance committees that track and report on the credit.
### Why it matters
Georgians who invest in small startups would no longer need to qualify as wealthy accredited investors to get the tax break, potentially opening the credit to more everyday investors. Being able to sell unused credits could also make the incentive more valuable, while the new $5 million annual cap limits total state revenue lost to the program.
### Key provisions
- Section 1 rewrites O.C.G.A. § 48-7-40.30, replacing the 'qualified investor' (accredited investor) requirement with a new, broader 'investor' definition covering Georgia taxpayers and small qualifying pass-through entities.
- Subsection (d) and (e) let investors claim the 35 percent credit for the same taxable year the investment is made, rather than waiting two years, and remove the old list of eligible years (2011-2018).
- Subsection (f) replaces the old rule barring credit transfers (except to family) with a new rule letting investors sell or transfer earned, unused credits to any other Georgia taxpayer.
- Subsection (i)(2) replaces the previous year-by-year sliding aggregate caps (starting at $10 million and dropping to $5 million) with a flat $5 million annual cap on all credits statewide.
- A new subsection (j) requires the commissioner to report annually to the House Ways and Means and Senate Finance Committees on what percentage of the credit was used the prior year.
- A new subsection (l) sets the credit to automatically repeal on December 31, 2031.
- Section 2 makes the changes effective July 1, 2025, applying to taxable years beginning on or after that date.
## Status
- Status: Introduced (2025-01-13)
- Last action: House Second Readers (2025-01-15)
- Sponsors: Dar'shun Kendrick
- Official page: https://www.legis.ga.gov/legislation/69288
> The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb8.md?full=1