HB1472: HB1472 Income tax; term "small business"; revise definition

26 LC 44 3499 House Bill 1472 By: Representative Lim of the 98th 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 imposition, rate, computation, exemptions, and credits for state income tax, so as2 to revise the definition of the term "small business"; to provide for related matters; to provide3 for an effective date and applicability; to repeal conflicting laws; and for other purposes.4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:5 SECTION 1.6 Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to7 imposition, rate, computation, exemptions, and credits for state income tax, is amended by8 revising Code Section 48-7-38, relating to deduction for paymen ts to classified9 subcontractors, disclosure of tax returns, and maintenance of list of classified subcontractors,10 as follows:11 "48-7-38.12 (a) As used in this Code section, the term:13 (1) 'Classified subcontractor' means a small business certifie d as a minority business14 enterprise, women owned business, or veteran owned business und e r C o d e S e c t i o n15 50-5-132.16 H. B. 1472 - 1 - 26 LC 44 3499 (2) 'Small business' shall have the same meaning as provided in Code Section 50-5-12117 means a business that is independently owned and operated and h as 300 or fewer18 employees or $30 million or less in gross receipts per year.19 (3) 'State contract' means a contract for the purchase by the state of goods, property, or20 services or for the construction of any building or structure for the state, which contract21 is executed by any department, board, bureau, commission, or ag ency of state22 government, by any state authority, or by any officer, official, employee, or agent of any23 of the foregoing.24 (b) In computing Georgia taxable net income of a corporation, partnership, or individual,25 there shall be subtracted from federal taxable income or federal adjusted gross income 1026 percent of the amount of qualified payments to classified subcontractors. A payment to a27 classified subcontractor shall be a qualified payment if:28 (1) The payment is for goods, personal property, or services furnished by the classified29 subcontractor to the taxpayer and delivered by the taxpayer to the state in furtherance of30 a state contract to which the taxpayer is a party; and the paym ent does not exceed the31 value of the goods, property, or services to the taxpayer;32 (2) The payment is made during the taxable year for which the subtraction from federal33 taxable income or federal adjusted gross income is claimed; and34 (3) The payment is made to a small business which, at the time of the payment, is35 certified as a minority business enterprise, women owned busine ss, or veteran owned36 business under Code Section 50-5-132.37 (c) The total amount which may be subtracted under this Code section from federal taxable38 income or federal adjusted gross income of any taxpayer shall be limited to $100,000.0039 per taxable year.40 (d) The department may disclose to the commissioner of adminis trative services the41 income tax returns of taxpayers applying for certification as minority business enterprises,42 women owned businesses, and veteran owned businesses under Code Section 50-5-132. 43 H. B. 1472 - 2 - 26 LC 44 3499 The commissioner of administrative services shall maintain and periodically revise a list44 of classified subcontractors and shall make such list available to the department no later45 than December 31 of each year and to the general public."46 SECTION 2.47 This Act shall become effective on July 1, 2026, and shall be applicable to all taxable years48 beginning on or after January 1, 2027.49 SECTION 3.50 All laws and parts of laws in conflict with this Act are repealed.51 H. B. 1472 - 3 -