Affiliated Entity Defined; Assignment of Corporate Income Tax Credit; Carryover of Unused Credit; Joint and Severable Liability

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. Affiliated Entity Defined; Assignment of Corporate Income Tax Credit; Carryover of Unused Credit; Joint and Severable Liability

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  1. As used in this Code section, the term "affiliated entity" means:
    1. A corporation that is a member of the taxpayer's "affiliated group" within the meaning of Section 1504(a) of the Internal Revenue Code; or
    2. An entity affiliated with a corporation, business, partnership, or limited liability company taxpayer, which entity:
      1. Owns or leases the land on which a project is constructed;
      2. Provides capital for construction of the project; and
      3. Is the grantor or owner under a management agreement with a managing company of the project.
  2. In lieu of claiming any Georgia income tax credit for which a taxpayer otherwise is eligible for the taxable year (such eligibility being determined for this purpose without regard to any limitation imposed by reason of the taxpayer's precredit income tax liability), the taxpayer may elect to assign such credit in whole or in part to one or more affiliated entities for such taxable year by attaching a statement to the taxpayer's return for the taxable year; provided, however, that no carryover attributable to the unused portion of any previously claimed or assigned credit may be assigned or reassigned, except as provided in subsection (d) of this Code section. Such election must be made on or before the due date for filing the applicable income tax return, including any extensions which have been granted. In the case of any credit that must be claimed in installments in more than one taxable year, the election under this subsection may be made on an annual basis with respect to each such installment, provided that the taxpayer shall notify the commissioner with respect to the assignment of each such installment by filing a separate copy of the election statement for such installment no later than the due date for filing the applicable income tax return, including any extensions which have been granted. Once made, an election under this subsection shall be irrevocable.
  3. The recipient of a tax credit assigned under subsection (b) of this Code section shall attach a statement to its return identifying the assignor of the tax credit, in addition to providing any other information required to be provided by a claimant of the assigned tax credit. With the exception of the transferable credits in Code Sections 48-7-29.8, 48-7-29.12, 48-7-40.26, and 48-7-40.26A, the recipient of a tax credit assigned under subsection (b) of this Code section shall also be eligible to take any credit against payments due under Code Section 48-7-103, subject to the same requirements as the assignor of such credit at the time of the assignment.
  4. If the assignor and the recipient of a tax credit assigned under subsection (b) of this Code section cease to be affiliated entities, any carryover attributable to the unused portion of such credit shall be transferred back to the assignor of the credit. Such assignor shall be permitted to use any such carryover itself, and also shall be permitted to assign such carryover to one or more affiliated entities, as if such carryover were an income tax credit for which the assignor became eligible in the taxable year in which the carryover was transferred back to the assignor.
  5. The assignor and recipient of a tax credit assigned under subsection (b) of this Code section shall be jointly and severally liable for any tax (plus interest and penalties, if any) attributable to the disallowance or recapture of the assigned credit.
  6. Notwithstanding the subsequent occurrence of any transaction, corporations that were treated as affiliated entities on December 31, 2001, shall continue to be so treated with respect to each other for purposes of this Code section for the taxable year during which they otherwise would cease to be affiliated entities (but for the modification contained in this subsection) and for the succeeding ten taxable years, but only if either the assignor or the recipient of the credit in question is a corporation as described in subparagraph (d)(2.2)(B) of Code Section 48-7-31 as it existed on December 31, 2001.
  7. For the purposes of all credits provided for by this chapter, the sale, merger, acquisition, or bankruptcy of any taxpayer shall not create new eligibility for the succeeding transferee in such transaction or event, but any unused credit eligible to be applied against income tax liability under this article may be transferred and continued by such transferee and applied against the transferee's income tax liability under this article.

(Code 1981, §48-7-42, enacted by Ga. L. 1999, p. 9, § 1; Ga. L. 2000, p. 1339, § 1; Ga. L. 2001, p. 4, § 48; Ga. L. 2001, p. 984, § 11; Ga. L. 2002, p. 954, § 2; Ga. L. 2005, p. 60, § 48/HB 95; Ga. L. 2005, p. 159, § 17/HB 488; Ga. L. 2018, p. 8, § 1-9/HB 918.)

The 2018 amendment, effective March 2, 2018, added the second sentence of subsection (c); and added subsection (g). See Editor's note for applicability.

Editor's notes.

- The former provisions of this Code section, relating to tax credits for AFDC recipients, was based on Code 1981, § 48-7-42, enacted by Ga. L. 1995, p. 1155, § 1 and was repealed by Ga. L. 1997, p. 1021, § 9, effective April 22, 1997.

Ga. L. 1999, p. 9, § 2, not codified by the General Assembly, makes this Code section applicable to all taxable years beginning on or after January 1, 1999.

Ga. L. 2000, p. 1339, § 2, not codified by the General Assembly, makes this Code section applicable to all taxable years beginning on or after January 1, 2000.

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. 2018, p. 8, § 3-1(e)/HB 918, not codified by the General Assembly, provides, in part, that this Act "shall become effective upon the approval of this Act by the Governor or upon this Act becoming law without such approval. The revisions to subsection (c) of Code Section 48-7-42 contained in Section 1-9 of this Act shall be applicable to tax credits that are assigned in taxable years beginning on or after January 1, 2018. New subsection (g) of Code Section 48-7-42 contained in Section 1-9 of this Act shall be applicable to sales, mergers, acquisitions, or bankruptcies occurring in taxable years beginning on or after January 1, 2018." This Act was signed by the Governor on March 2, 2018.

Law reviews.

- For note on the 2001 amendment to this Code section, see 18 Georgia St. U.L. Rev. 294 (2001).

ARTICLE 3 RETURNS AND FURNISHING OF INFORMATION

RESEARCH REFERENCES

ALR.

- Income tax: right to deduction in respect of obligations voluntarily assumed or paid, 79 A.L.R. 977.

Right of taxpayer to relief from his own errors in assessing his income tax or making out his income tax return, 80 A.L.R. 377.

Income tax: right of surviving spouse to make joint return where husband or wife dies during tax year, 99 A.L.R. 587.


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