Deduction for Payments to Minority Subcontractors; Certification as Minority Subcontractor

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. Deduction for Payments to Minority Subcontractors; Certification as Minority Subcontractor

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  1. As used in this Code section, the term:
    1. "Member of a minority" means an individual who is:
      1. Black;
      2. Hispanic;
      3. Asian-Pacific American;
      4. Native American; or
      5. Asian-Indian American.
    2. "Minority subcontractor" means any business which is owned by:
      1. An individual who is a member of a minority who reports as his or her personal income for Georgia income tax purposes the income of such business;
      2. A partnership in which a majority of the ownership interest is owned by one or more members of a minority who report as their personal income for Georgia income tax purposes more than 50 percent of the income of the partnership; or
      3. A corporation organized under the laws of this state in which a majority of the common stock is owned by one or more members of a minority who report as their personal income for Georgia income tax purposes more than 50 percent of the distributed earnings of the corporation.
    3. "State contract" means a contract for the purchase by the state of goods, property, or services or for the construction of any building or structure for the state, which contract is executed by any department, board, bureau, commission, or agency of state government, by any state authority, or by any officer, official, employee, or agent of any of the foregoing.
  2. In computing Georgia taxable net income of a corporation, partnership, or individual, there shall be subtracted from federal taxable income or federal adjusted gross income 10 percent of the amount of qualified payments to minority subcontractors. A payment to a minority subcontractor shall be a qualified payment if:
    1. The payment is for goods, personal property, or services furnished by the minority subcontractor to the taxpayer and delivered by the taxpayer to the state in furtherance of a state contract to which the taxpayer is a party; and the payment does not exceed the value of the goods, property, or services to the taxpayer;
    2. The payment is made during the taxable year for which the subtraction from federal taxable income or federal adjusted gross income is claimed; and
    3. The payment is made to a subcontractor who at the time of the payment is certified as a minority subcontractor pursuant to subsection (d) of this Code section.
  3. The total amount which may be subtracted under this Code section from federal taxable income or federal adjusted gross income of any taxpayer shall be limited to $100,000.00 per taxable year.
  4. The commissioner of administrative services shall certify individuals, partnerships, and corporations which are within the definition of the term "minority subcontractor" specified in subsection (a) of this Code section. The department may disclose to the commissioner of administrative services the income tax returns of taxpayers applying for certification as minority subcontractors. The commissioner of administrative services shall maintain and periodically revise a list of certified minority subcontractors and shall make such list available to the department and to the general public.
  5. Any individual, partnership, or corporation certified pursuant to subsection (d) of this Code section and any small business concern which is at least 51 percent owned by one or more minorities, or, in the case of a publicly owned business, at least 51 percent of all classes or types of the stock of which is owned by one or more minorities, whose management and daily business operations are controlled by one or more minorities, and which is authorized to do and is doing business under the laws of this state paying all taxes duly assessed and domiciled within this state shall be eligible for certification as a minority business enterprise under Code Section 50-5-132; and, for purposes of such certification pursuant to this subsection, "minority" shall be defined as a member of a minority. Such certification shall be subject to the provisions of Code Section 50-5-133.

(Code 1981, §48-7-38, enacted by Ga. L. 1984, p. 1644, § 3; Ga. L. 1987, p. 191, § 2; Ga. L. 2001, p. 105, § 1; Ga. L. 2013, p. 141, § 48/HB 79.)

Editor's notes.

- Ga. L. 1984, p. 1644, § 4, not codified by the General Assembly, provided that the Act would apply to taxable years beginning on or after January 1, 1985.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, provides that this Act is applicable to taxable years ending on or after March 11, 1987, and that a taxpayer with a taxable year ending on or after January 1, 1987, and before March 11, 1987, may elect to have the provisions of that Act apply.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by that Act.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that provisions of the federal Tax Reform Act of 1986 and of the Internal Revenue Code of 1986 which as of January 1, 1987, were not yet effective become effective for purposes of Georgia taxation on the same dates as they become effective for federal purposes.

Ga. L. 2001, p. 105, § 4, not codified by the General Assembly, provides that the 2001 amendment shall be applicable to all taxable years ending on or after January 1, 2001.

Law reviews.

- 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).


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