The Tax Cost of Doing Business in Georgia

Date: September 10, 2015

State ranks No. 2 for call centers in recent Tax Foundation report

Tax Foundation teamed up with the tax and auditing firm of KPMG
LLP to conduct an extensive study of corporate tax costs in all 50 states. The
purpose of the study, The State Tax Costs
of Doing Business
, was to develop a “bottom-line measure of the tax costs
of each of the 50 U.S. states for a select number of model corporations.”

Among the results of the study is a measure of the total state
and local tax burden borne by both mature firms and new investments the effects
of state tax incentives compared to a state’s core tax system. 

Georgia measured
favorably for its manufacturing operations environment. Tax burdens for mature
labor- and capital-intensive manufacturing firms both ranked in the top-10 because of a friendly income apportionment
formula and relatively low unemployment insurance tax burdens.

The state ranks No. 2 overall for mature call centers thanks to
the state’s sourcing rules for similarly advantage operations that sell their
services out of state.

The type of firm that performs the worst compared to its peers
in other states is new corporate headquarters, which get hit with a 13.5
percent tax rate. Georgia’s single sales factor apportionment rules don’t apply
to new corporate headquarters.

Although Georgia exempts manufacturing machinery from the sales
tax, it imposes a tax on equipment used for research and development. New
R&D firms receive tax incentives of 10 percent of in-state R&D
expenses. 

Related Content: Small Business News | Georgia

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