2019 Georgia Code
Title 48 - Revenue and Taxation
Chapter 7 - Income Taxes
Article 2 - Imposition, Rate, and Computation; Exemptions
§ 48-7-40.36. Income tax credits for timber producers incurring losses from Hurricane Michael
(a)
(1) The General Assembly finds and determines that Hurricane Michael has had a catastrophic impact on the citizens and the economy of southwest Georgia, has particularly devastated the timber industry on which the citizens of southwest Georgia are heavily dependent for their livelihood, and has created both a public fire hazard and a danger of insect infestations due to the massive amounts of downed timber caused by the severity of this natural disaster.
(2) The General Assembly further finds and declares that it is appropriate and advisable to provide relief to the timber industry in the form of a tax credit targeted to those taxpayers that have suffered substantial economic losses and that will have to incur significant expenses for salvaging downed timber, site clearance, restoration, and reforestation of timber over the coming years.
(b) As used in this Code section, the term:
(1) "Disaster area" means the real property encompassed by the borders of the 28 counties included in the renewal of the State of Emergency pronounced in the Executive Order of the Governor dated November 6, 2018, and filed in the official records of the office of the Governor as Executive Order 11.06.18.01.
(2) "Eligible timber property" means timber which on October 8, 2018, was being grown by a taxpayer in a disaster area as part of a trade or business or a transaction entered into for profit.
(3) "Timber" means trees grown for the primary purpose of commercial production of food or wood or wood fiber products.
(4) "Timber casualty loss" means the amount of the diminution of value included in the computation of the casualty loss deduction for such casualty losses claimed and allowed pursuant to Section 165 of the Internal Revenue Code of 1986 as casualty losses incurred by a taxpayer between October 9, 2018, and December 31, 2018, as a result of damage to or destruction of eligible timber property caused by Hurricane Michael.
(c)
(1) A taxpayer shall be allowed tax credits against the tax imposed by this article in an amount equal to 100 percent of such taxpayer's timber casualty loss; provided, however, that the credit amount shall not exceed the number of the taxpayer's affected acres of eligible timber property in such disaster areas multiplied by $400.00.
(2) To claim such tax credits, a taxpayer shall submit an application for preapproval of such credits based on timber casualty losses incurred by such taxpayer. A taxpayer shall either submit its preapproval application between January 1, 2019, and May 31, 2019, for a first round of preapprovals or between July 1, 2019, and December 31, 2019, for a second round of preapprovals, if applicable.
(d)
(1) The commissioner shall require preapproval applications to contain such information as is necessary to substantiate a taxpayer's eligibility for tax credits allowed pursuant to this Code section.
(2) The commissioner is authorized to require electronic submission of preapproval applications in the manner specified by the commissioner.
(3) The commissioner shall review completed preapproval applications in the order in which such applications were submitted and shall provide notice to each taxpayer that submitted an application within 30 days of receipt stating whether such taxpayer's application is complete or incomplete.
(4) In no event shall the commissioner preapprove tax credits pursuant to this Code section in an amount that exceeds $200 million in aggregate.
(5) In the event that properly completed and timely submitted preapproval applications are submitted for an amount that exceeds the amount of funds available to fully fund the tax credits requested, the commissioner shall prorate the available funds between or among the applicants.
(6) The commissioner shall approve properly completed and timely submitted preapproval applications and issue a preapproval certificate to the taxpayer by June 30, 2019, certifying the amount of credits such taxpayer is eligible to claim if the taxpayer meets the conditions of this Code section.
(d.1)
(1) If, on July 1, 2019, the commissioner has not preapproved tax credits in the amount of $200 million in aggregate pursuant to this Code section, a second round of preapproval applications shall be reviewed by the commissioner. Preapproval applications for the second round shall be submitted on or after July 1, 2019, and on or before December 31, 2019.
(2) In the event that properly completed and timely submitted preapproval applications are submitted during the second round for an amount that exceeds the amount of funds available to fully fund the tax credits requested, the commissioner shall prorate the available funds between or among the applicants.
(3) The commissioner shall approve all properly completed and timely submitted preapproval applications during the second round and issue a preapproval certificate to the taxpayer by January 31, 2020, certifying the amount of credits such taxpayer is eligible to claim if the taxpayer meets the conditions of this Code section.
(e) In no event shall the amount of the tax credits allowed pursuant to this Code section exceed $200 million in aggregate.
(f) (1) (A) Tax credits allowed pursuant to this Code section shall be eligible to be claimed only by the taxpayer to which a preapproval certificate was issued by the commissioner.
(B) Tax credits allowed under paragraph (1) of subsection (c) of this Code section shall only be claimed in the taxable year in which the taxpayer first completes:
(i) The restoration of each acre for which timber casualty losses were incurred to a condition that has an adequately stocked stand that is expected to result in forest products or ecological services in the foreseeable future; or
(ii) The replanting of timber in a quantity projected to yield at maturity at least 90 percent of the value of the timber casualty loss claimed. Such timber shall be planted within the same county in which the eligible timber property was being grown when the timber casualty loss was incurred. Timber market conditions as of October 8, 2018, shall be used for the purposes of establishing projected value.
(2) In order to claim such tax credits, a taxpayer shall attach to such taxpayer's state tax return certification from the taxpayer that the requirements of this Code section have been met and any other information required by the commissioner, including information which demonstrates that it has completed the replanting of timber or the salvaging, management, removal, or clearance of downed or destroyed timber required pursuant to paragraph (1) of this subsection.
(3) Any tax credits allowed pursuant to this Code section shall be claimed on or before December 31, 2024.
(g)
(1) The total amount of the tax credits allowed pursuant to this Code section for a taxable year may exceed the taxpayer's income tax liability. Such tax credits allowed in excess of a taxpayer's income tax liability shall be refundable to such taxpayer, provided that such taxpayer is the same taxpayer that incurred the timber casualty loss.
(2) Tax credits claimed pursuant to this Code section but not used in any taxable year may be carried forward for ten years from the close of the taxable year in which the credits are claimed.
(h) Tax credits claimed pursuant to this Code section but not used by the taxpayer against its income tax or refunded may be transferred or sold one time to a single other Georgia taxpayer, subject to the following conditions:
(1) Only the taxpayer that claimed tax credits allowed pursuant to this Code section shall make the transfer or sale of such tax credits;
(2) The taxpayer that claimed the tax credits allowed pursuant to this Code section shall submit to the commissioner written notification of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax credits. The notification shall include:
(A) Such taxpayer's credit balance prior to transfer;
(B) The credit certificate number;
(C) The remaining balance of credits after transfer;
(D) The tax identification numbers for the transferee;
(E) The date of transfer;
(F) The amount of credits transferred; and
(G) Other information as may be required by the department;
(3) Failure to comply with this subsection shall result in the disallowance of the tax credits allowed pursuant to this Code section until the taxpayer that claimed the credits is in full compliance;
(4) The transfer or sale of the tax credits does not extend the time during which such tax credits can be used. The carry-forward period for tax credits that are transferred or sold shall begin on the date on which such tax credits were originally claimed;
(5) A transferee shall have only such rights to claim and use the tax credits that were available to the transferor at the time of the transfer, provided that a transferee shall not be eligible to transfer or receive a refund of such tax credits. To the extent that the transferor did not have rights to claim or use the tax credits at the time of the transfer, the commissioner shall disallow the tax credits claimed by the transferee or recapture the tax credits from the transferee or transferor. The transferee's recourse shall not be against the commissioner; and
(6) The transferee must acquire the tax credits allowed pursuant to this Code section for a minimum of 60 percent of the amount of the tax credits so transferred.
(i)
(1) A taxpayer claiming, transferring, or selling tax credits allowed pursuant to this Code section shall be required to reimburse the department for any department initiated audits relating to the tax credits, provided that such amount shall not exceed the value of the credits claimed by the taxpayer. This paragraph shall not apply to routine tax audits of such taxpayer that may include the review of the tax credits provided in this Code section.
(2) The commissioner shall have access to timber property for the purpose of determining eligibility for both the preapproval and claiming of tax credits allowed and conducting audits pursuant to this Code section, provided that prior notice is given to any taxpayer that submitted an application for the preapproval of tax credits or that transferred or claimed such tax credits and the owner of the underlying real property.
(3) The commissioner may pursue all remedies available by law as necessary to recapture tax credits wrongfully preapproved, allowed, or claimed by a taxpayer or a taxpayer's transferee.
(4) The commissioner shall be authorized to consult with the Georgia Forestry Commission as necessary to administer and enforce this Code section.
(j) The commissioner shall be authorized to promulgate any rules and regulations necessary to implement and administer this Code section.
Code 1981, § 48-7-40.36, enacted by Ga. L. 2018, Ex. Sess., p. ES3, § 1/HB 4EX; Ga. L. 2019, p. 86, § 1/HB 446.
