HB 8: Income tax credit; certain investments in qualified businesses; renew and revise

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.

• 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.

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.

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.

• 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.

1. 2025-01-15House Second Readers (Cámara de Representantes)
2. 2025-01-14House First Readers (Cámara de Representantes)
3. 2025-01-13House Hopper (Cámara de Representantes)

• Dar'shun Kendrick (D, HD-095)Patrocinador principal

• income tax credits
• small business investment
• startup funding
• angel investor tax credit
• Georgia tax policy