Definitions

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. General Provisions
  6. Definitions

Checkout our iOS App for a better way to browser and research.

As used in this chapter, the term:

  1. "Corporation" includes, but is not limited to, all associations, professional associations organized pursuant to Chapter 10 of Title 14, and insurance companies.
  2. "Deficiency" means the amount by which the tax imposed by this chapter or any prior law exceeds the amount shown as the tax due by the taxpayer upon his return or, if no amount is shown as the tax due by a taxpayer upon his return or if no return is made by the taxpayer, the amount determined by the commissioner to be the correct amount of the tax.
  3. "Dividend," when used for the purpose of defining a taxable dividend, means any distribution made by a corporation out of its earnings or profits to its shareholders or members whether the distribution is made in cash, other property, or a stock different from the stock on which the dividend is paid. "Dividend" also includes, but is not limited to, the portion of the assets of a corporation distributed at the time of dissolution which is in effect a distribution of earnings.
  4. "Fiscal year" means an accounting period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has elected a year consisting of 52 to 53 weeks for federal income tax purposes, the term means the period so elected.
  5. "Income tax day" means December 31 of each calendar year or, if a person can show to the satisfaction of the commissioner that the person has already established the fiscal year as his taxable year for income tax reporting purposes, the last day of the person's fiscal year.
  6. "Nonresidents" means taxable nonresidents and nontaxable nonresidents.
  7. "Nontaxable nonresident" means every individual who is not otherwise a resident of this state or a taxable nonresident of this state.

    (7.1) "Owning property or doing business in this state" shall not include the following activities, either singularly or in the aggregate, with respect to any person that is not otherwise subject to income taxation in the State of Georgia that has contracted with a commercial printer for any printing, including printing related activities, and distribution services to be performed in Georgia:

    1. The ownership by that person of tangible or intangible property located at the Georgia premises of the commercial printer for use by the printer in performing its services for the owner;
    2. The sale and distribution by that person of printed material produced at and shipped or distributed from the Georgia premises of the commercial printer;
    3. The activities performed by or on behalf of that person at the Georgia premises of the commercial printer which are directly related to the services provided by that commercial printer; or
    4. The printing, including printing related activities and distribution related activities, performed by the commercial printer in Georgia for or on behalf of that person.
  8. "Paid," for the purpose of the deductions under this chapter, means "paid or accrued" or "paid or incurred." The terms "paid or accrued," "paid or incurred," and "incurred" shall be construed according to the method of accounting upon the basis of which the net income is computed under this chapter.
  9. "Received," for the purpose of the computation of the net income under this chapter, means "received or accrued." The term "received or accrued" shall be construed according to the method of accounting upon the basis of which the net income is computed under this chapter.
    1. "Resident" means:
      1. Every individual who is a legal resident of this state on income tax day;
      2. Every individual who, though not necessarily a legal resident of this state, nevertheless resides within this state on a more or less regular or permanent basis and not on the temporary or transitory basis of a visitor or sojourner and who so resides within this state on income tax day; and
      3. Every individual who on income tax day has been residing within this state for 183 days or part-days or longer, in the aggregate, of the immediately preceding 365 day period.
    2. Every individual who, having become a resident of this state for income tax purposes under divisions (i) and (ii) of subparagraph (A) of this paragraph, is deemed to continue to be a resident of this state until the person shows to the satisfaction of the commissioner that he or she has become a legal resident or domiciliary of another state and that he or she does not come within division (iii) of subparagraph (A) of this paragraph. Upon such a showing with respect to any 12 month period immediately preceding income tax day, the person shall be taxable as a resident of this state only to the date of becoming a nonresident on an apportionment basis as prescribed in Code Section 48-7-85.
    3. Every individual who becomes a resident of this state for income tax purposes under divisions (i) and (ii) of subparagraph (A) of this paragraph for the first time during the 12 month period immediately preceding income tax day and who does not otherwise come within division (iii) of subparagraph (A) of this paragraph shall be taxable as a resident only from the date of becoming a resident on an apportionment basis as prescribed in Code Section 48-7-85.
  11. "Taxable nonresident" means:
    1. Every individual who is not otherwise a resident of this state for income tax purposes and who regularly and not casually or intermittently engages within this state, by himself or herself or by means of employees, agents, or partners, in employment, trade, business, professional, or other activity for financial gain or profit, including, but not limited to, the rental of real or personal property located within this state or for use within this state. "Taxable nonresident" does not include a legal resident of another state whose only activity for financial gain or profit in this state consists of performing services in this state for an employer as an employee when the remuneration for the services does not exceed the lesser of 5 percent of the income received by the person for performing services in all places during any taxable year or $5,000.00;
    2. Every individual who is not otherwise a resident of this state for income tax purposes and who sells, exchanges, or otherwise disposes of tangible property which at the time of the sale, exchange, or other disposition has a taxable situs within this state or who sells, exchanges, or otherwise disposes of intangible personal property which has acquired at the time of the sale, exchange, or other disposition a business or commercial situs within this state;
    3. Every individual who is not otherwise a resident of this state for income tax purposes and who receives the proceeds of any lottery prize awarded by the Georgia Lottery Corporation;
    4. Every individual who is not a resident of this state for income tax purposes and who makes a withdrawal as provided for in paragraph (10) of subsection (b) of Code Section 48-7-27; and
      1. For purposes of this subparagraph, the term:
    6. "Deferred compensation" means deferred compensation received from a nonqualified deferred compensation plan.
    7. "Nonqualified deferred compensation plan" means the same as it is defined in Section 3121(v)(2) of the Internal Revenue Code.
      1. Every individual who is not otherwise a resident of this state for income tax purposes and who regularly and not casually or intermittently engaged in a prior year within this state, by himself or herself, in activity for financial gain or profit and who receives income from such activity in the form of deferred compensation or income from the exercise of stock options and such income exceeds the lesser of 5 percent of the income received by the person in all places during the taxable year or $5,000.00; provided, however, that this subparagraph shall not apply in the case of an individual who receives such income when the state is prohibited from taxing such income pursuant to federal law. For stock options granted and deferred compensation plans established before January 1, 2011, this subparagraph shall apply only to the portion earned on or after January 1, 2011. The commissioner shall by rule and regulation provide the method of determining the amount earned in Georgia using a "days worked in Georgia" method. Such earned amount shall be included in the Georgia income of the taxable nonresident.
      2. Employers shall withhold Georgia income tax as provided in Article 5 of this chapter on all deferred compensation and stock options which are required to be included in Georgia income of the taxable nonresident. For purposes of withholding only:
    8. The employer shall use records that are available to them. However, if the records are not available, the employer may reasonably rely upon a written representation, signed under penalties of perjury, from the employee of the number of days worked in Georgia. The employer shall only be held liable if the employer had actual or constructive knowledge that the employee's written representation was false or contained erroneous information; and
    9. The employer may elect to determine the number of days worked in Georgia by assuming the employee worked in Georgia only during the time the employee was a resident of Georgia.
      1. The commissioner shall be authorized to promulgate any rules and regulations necessary to implement and administer the tax provisions of this paragraph.
  12. "Taxable year" means the calendar year or the fiscal year ending during the calendar year upon the basis of which the net income is computed under this chapter.

(Ga. L. 1931, Ex. Sess., p. 24, §§ 2, 35; Ga. L. 1931, p. 7, § 85; Code 1933, §§ 92-3002, 92-3302(f); Ga. L. 1937, p. 109, § 1; Ga. L. 1937-38, Ex. Sess., p. 150, § 1; Ga. L. 1941, p. 221, § 1; Ga. L. 1957, p. 397, §§ 1, 2; Ga. L. 1962, p. 454, § 1; Ga. L. 1962, p. 703, § 1; Ga. L. 1963, p. 16, § 1; Ga. L. 1975, p. 858, § 1; Ga. L. 1976, p. 980, § 1; Code 1933, § 91A-3501, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 61; Ga. L. 1994, p. 597, § 1; Ga. L. 1998, p. 124, § 2; Ga. L. 2002, p. 372, § 1; Ga. L. 2005, p. 60, § 48/HB 95; Ga. L. 2005, p. 159, § 7/HB 488; Ga. L. 2008, p. 159, § 6/HB 1014; Ga. L. 2009, p. 8, § 48/SB 46; Ga. L. 2010, p. 525, § 1/HB 1198; Ga. L. 2011, p. 297, § 2/HB 346.)

Editor's notes.

- Ga. L. 2002, p. 372, § 15(b), not codified by the General Assembly, provides that §§ 1-4, 6, and 8-14 of this Act shall be applicable to all taxable years beginning on or after January 1, 2002.

Ga. L. 2005, p. 159, § 1/HB 488, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'State and Local Tax Revision Act of 2005.'"

Ga. L. 2005, p. 159, § 27(c)/HB 488, not codified by the General Assembly, provides that § 7 of this Act applies to all taxable years beginning on or after January 1, 2005.

Ga. L. 2010, p. 525, § 2/HB 1198, not codified by the General Assembly, provides that this Act shall be applicable to all taxable years beginning on or after January 1, 2011.

Ga. L. 2011, p. 297, § 5(b)/HB 346, not codified by the General Assembly, provides that the amendment of this Code section by that Act shall be applicable to all taxable years beginning on or after January 1, 2011.

Law reviews.

- For article, "Foreign Corporations in Georgia," see 10 Ga. St. B. J. 243 (1973). For article discussing taxation of foreign businesses in Georgia, see 27 Mercer L. Rev. 629 (1976). For article surveying Georgia cases in the area of business associations from June 1977 through May 1978, see 30 Mercer L. Rev. 1 (1978). For article, "Revenue and Taxation: Amend Titles 48, 2, 28, 33, 36, 46, and 50 of the Official Code of Georgia Annotated, Relating Respectively to Revenue and Taxation, Agriculture, the General Assembly, Insurance, Local Government, Public Utilities, and State Government," see 28 Georgia St. U.L. Rev. 217 (2011).

JUDICIAL DECISIONS

ANALYSIS

  • In General
  • Dividends

In General

Nature of income tax.

- General view is that an income tax is not a property tax, but more in the nature of an excise tax. However, an income tax is not an occupation or a poll tax, nor is it a franchise tax or a sales tax, but the very antithesis thereof. Interstate Bond Co. v. State Revenue Comm'n, 50 Ga. App. 744, 179 S.E. 559 (1935).

Income tax relates to product or income from property or business.

- An income tax may be described as one relating to the product or income from property or from business pursuits, and has been defined as a tax on the yearly profits arising from property, professions, trades, or offices, or as a tax on a person's income, emoluments, profits, and the like, or the excess thereof over a certain amount. Interstate Bond Co. v. State Revenue Comm'n, 50 Ga. App. 744, 179 S.E. 559 (1935).

Legislative intent as to income earned outside state before becoming resident.

- Former Code 1933, §§ 92-3002, 92-3101, 92-3112, and 92-3302 (see now O.C.G.A. §§ 48-7-1,48-7-20, and48-7-30), when construed together, authorize, if they do not compel, the interpretation that the General Assembly did not intend to impose a tax upon such portion of the income of a resident as was derived by the resident from sources outside the state before the date on which the individual became a resident of this state. Forrester v. Culpepper, 194 Ga. 744, 22 S.E.2d 595, answer conformed to, 68 Ga. App. 382, 23 S.E.2d 106 (1942).

Dividends

Legislative intent as to assets distributed at time of dissolution.

- General Assembly's intention in enacting this section is to ensure the taxation of those portions of a corporation's assets distributed at the time of dissolution as would in effect be a distribution of earnings by not allowing corporations to liquidate at depression values and take losses on the difference between the value on the date of liquidation and the sole stockholder's cost or original basis for the stock. Chilivis v. Cleveland Elec. Co., 142 Ga. App. 751, 236 S.E.2d 872 (1977).

Construction of definition of "dividend" with other provisions.

- In light of the legislative history of former Code 1933, § 91A-3501 (see now O.C.G.A. § 48-7-1) and Oxford v. Carter, 216 Ga. 821, 120 S.E.2d 298 (1961), the Court of Appeals is not willing to say that the term "dividend" as used in paragraph (b)(10) of former Code 1933, § 92-3102 (see now O.C.G.A. § 48-7-21(b)(8)), incorporates the definition in this section or that "dividend" as used in this section clearly and distinctly includes a final distribution in liquidation. Chilivis v. Cleveland Elec. Co., 142 Ga. App. 751, 236 S.E.2d 872 (1977).

Construction with Internal Revenue Code.

- Words "the portion of the assets of a corporation distributed at the time of dissolution which is in effect a distribution of earnings" in the definition of "dividend" mean such portion of the assets as would be "essentially equivalent to the distribution of a taxable dividend" under 26 U.S.C. § 302 and the regulations interpreting that section. Carter v. Oxford, 102 Ga. App. 762, 118 S.E.2d 216 (1960), aff'd, 216 Ga. 821, 120 S.E.2d 298 (1961).

OPINIONS OF THE ATTORNEY GENERAL

Taxation of stock distributed to shareholders pursuant to divestiture ruling.

- Stock held by a corporation which stock is distributed to the corporation's stockholders in accordance with divestiture ruling of federal courts is taxable as a dividend under state income tax laws. 1962 Op. Att'y Gen. p. 521.

Becoming legal resident or domiciliary of another state.

- To become a legal resident or domiciliary of another state one must not only reside there but must do so with the intention of giving up one's legal residence or domicile in Georgia. 1969 Op. Att'y Gen. No. 69-171.

Effect on status as a resident of temporary absence from state.

- If a citizen is a resident of this state, the citizen will remain a resident of this state and subject to the income tax laws, even though absent and temporarily living in another jurisdiction, until the citizen is legally qualified to become a resident of another state. 1954-56 Op. Att'y Gen. p. 763.

What activity gives rise to classification as taxable nonresidents.

- This section does not attach merely because a nonresident happens to be administratively assigned to, and paid from, an office located in this state. However, if employment takes place within this state beyond the extent specified in this section, then these obligations do attach, irrespective of the fact of nonresidency, or other factors. 1960-61 Op. Att'y Gen. p. 502.

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, § 470, 471.

C.J.S.

- 84 C.J.S., Taxation, §§ 142 et seq., 482 et seq, 568. 85 C.J.S., Taxation, §§ 1976, 2051, 2052, 2053.

ALR.

- Inhabitancy or residence, within provisions of income tax law as equivalent of domicile, 82 A.L.R. 982.

Validity and construction of state statutes imposing tax on income derived from dividends on stock of foreign corporations, 102 A.L.R. 77; 143 A.L.R. 147.

Meaning of association or joint stock company within statutes taxing associations or joint stock companies as corporations ("Massachusetts" or business trusts), 108 A.L.R. 340; 144 A.L.R. 1050; 166 A.L.R. 1461.

Income tax in respect of salaries of public officers and employees, 125 A.L.R. 1421.

Income tax on income of taxpayer who dies during taxable year, 142 A.L.R. 213.

Income tax on nonresident or on foreign corporation, 156 A.L.R. 1370.

Income tax in relation to stock dividends (including character of corporate distributions as stock dividends), 167 A.L.R. 554.


Download our app to see the most-to-date content.