Georgia Port Activity Credit: What Your Business Needs to Know

by: Matt Crine
Verified by: CPA

June 25, 2024

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Georgia offers many state tax incentives to manufacturing and distribution businesses, but there’s one that many eligible businesses fail to take advantage of: the Georgia Port Activity Credit. More well-known credits, including the Georgia Job Tax Credit and the Manufacturers Investment Tax Credit, provide attractive benefits to manufacturing and distribution businesses, stimulating economic growth and boosting job creation across the state. 

But the Port Tax Credit Bonus, which can provide significant tax savings for companies that import goods through Georgia’s ports, is often overlooked. 

This valuable add-on credit is designed to reward businesses that increase their import activity, further strengthening the state’s logistics and trade infrastructure. In this overview, we’ll explain how the credit works, how to determine if your business qualifies, and what the potential tax benefits could look like. 

What is the Georgia Port Tax Credit Bonus?

Georgia’s Port Tax Credit Bonus is an additional incentive on top of either the Job Tax Credit or the Georgia Investment Tax Credit

To claim this bonus, your company must first qualify for one of those two primary credits related to job creation or manufacturing investment. 

Once eligible, the Port Bonus provides a bonus credit per eligible employee or job created when claimed with the Jobs Tax Credit. When the Port Bonus is claimed with the Georgia Investment Credit, it allows for up to an additional 5% of the investment to be claimed as a credit.

How the Port Tax Credit Bonus Works

To qualify for the Port Tax Credit Bonus, your company must:

  1. Qualify for either the Job Tax Credit or the Manufacturers Investment Tax Credit.
  2. Demonstrate that you have increased your import activity in Georgia over the previous year.

This increase is measured by metrics such as:

  • Number of shipping containers handled
  • Twenty-foot Equivalent Units (TEUs) of cargo
  • Net tons

For example, if your manufacturing facility imported 1,200 TEUs through the Port of Savannah in 2022 and increased that volume to 1,400 TEUs in 2023, you would likely qualify for the bonus credit, provided you qualified for either the Job Tax Credit or the Investment Tax Credit. 

When claimed with the Job Tax Credit, the Port Tax Credit Bonus provides an additional $1,250 credit per eligible job on top of the amount you have already qualified for. 

Let’s illustrate with an example: Suppose your company created 50 new jobs in a Tier 2 county, qualifying for the Job Tax Credit of $3,000 per job, totaling $150,000. If you also demonstrated the required increase in import volumes through Georgia ports, you could claim an additional Port Tax Credit Bonus of: 

50 jobs x $1,250 per job bonus = $62,500 

This $62,500 bonus would be claimed in conjunction with the $150,000 Job Tax Credit, significantly reducing your overall tax liability for that year.

When claimed with the Investment Tax Credit, the Port Tax Credit Bonus allows the taxpayer to use Tier 1 credit percentages regardless of what Tier the taxpayer qualifies for based on their location. In Georgia, the Investment Tax credit is calculated in part using the ‘Tier’ of the county the activity is based in, ranging from Tier 1 counties (the most economically depressed), to Tier 4 counties (the most prosperous). A taxpayer in a Tier 4 county can increase their allowable Investment Tax Credit from 1% to 5% for construction and equipment expenses and from 3% to 8% for pollution control equipment expenses. 

Here’s an example:  Suppose your company is located in a Tier 4 county and invested $10,000,000 in a manufacturing facility of which $1,000,000 was for pollution control. To calculate your Investment Tax Credit, you would do the following math:

$9,000,000 Manufacturing Facility x 1% + $1,000,000 Pollution Control x 3% = $120,000 Tax Credit

If you also demonstrated the required increase in import volumes through Georgia ports, your Investment Tax Credit would increase significantly, since you could recognize an Investment Tax Credit at the equivalent level of a company in a Tier 1 county: 

$9,000,000 Manufacturing Facility x 5% + $1,000,000 Pollution Control x 8% = $530,000 Tax Credit

In this example, leveraging the Port Activity Credit, assuming the business qualifies, would allow the business to more than quadruple its tax credit. While the bonus credit calculation may seem straightforward, identifying and accurately claiming these opportunities can be challenging without the guidance of experienced tax advisors.

At Smith + Howard, our team of experts has a deep understanding of Georgia’s tax landscape and regularly assists clients to qualify for available incentives like the Port Tax Credit Bonus.

Benefits of Claiming the Georgia Port Activity Credit Bonus

The tax savings from the Port Tax Credit Bonus can benefit eligible companies in several key ways. 

First, it helps lower overall business costs. With the bonus credit reducing their tax obligations, companies can invest more funding back into growing their operations. This could mean expanding facilities, buying new equipment, enhancing logistics, or developing new products and services. 

Having lower costs can also grant a competitive edge. For example, such savings might enable companies to offer more competitive pricing to customers or improve productivity and efficiency. 

The Port Tax Credit Bonus also rewards companies that increase imports through Georgia’s ports. Increases in import activity help stimulate economic activity for Georgia’s transportation, logistics, and related businesses. This bonus essentially rewards any company that supports this key state industry. 

Claiming the Port Tax Credit Bonus also demonstrates that a business actively pursues available incentives and tax benefits. This fiscally responsible approach can appeal to investors and help build a reputation for overall financial responsibility. 

Overall, the Port Tax Credit Bonus provides financial flexibility, competitive advantages, recognition for utilizing state resources, an appealing fiscal approach for investors, and alignment with Georgia’s economic priorities—-benefits that extend far beyond just tax liability reduction.

Smith + Howard: Maximizing Your Tax Credit Opportunities

The Port Tax Credit Bonus presents a valuable opportunity for manufacturers and other businesses importing goods through Georgia’s ports to significantly reduce their tax liability. 

By understanding the requirements, calculating the potential savings, and working with the experienced tax advisors at Smith + Howard, your company can maximize this incentive and gain a competitive edge in the market. 

Contact Smith + Howard today to ensure your business is taking full advantage of Georgia’s tax incentive landscape.

How can we help?

If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.