Georgia House Bill HB1180 Latest Draft

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The Senate Committee on Finance offered the following 
substitute to HB 1180:
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to1
income taxes, so as to revise the definition of "taxable nonresident"; to provide for taxation2
of certain nonresidents; to separate into a new Code section provisions related to tax credits3
for qualified interactive entertainment production companies; to provide for base investment4
requirements for a qualified production company to qualify for a credit; to provide for a5
maximum amount of credits that may be transferred each year; to provide for the6
implementation of such maximum; to provide for an exemption from such maximum; to7
provide for conditions related to transferability of credits; to provide for the circumstances8
under which a company qualifies for an additional credit; to authorize certain fees; to require9
companies to pay court costs if the denial of certification is upheld by a court on appeal; to10
provide for an application requirement; to provided for rules and regulations; to remove11
outdated and unnecessary language; to provide a short title; to provide for definitions; to12
provide for related matters; to provide for an effective date and applicability; to repeal13
conflicting laws; and for other purposes.14
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:15
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SECTION 1.16
Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,17
is amended in paragraph (11) of Code Section 48-7-1, relating to definitions, by deleting18
"and" at the end of subparagraph (D), by deleting the period at the end of subparagraph (E)19
and inserting in lieu thereof "; and", and by adding a new subparagraph to read as follows:20
"(F)(i)  Every person that is not otherwise a resident of this state for income tax21
purposes that receives income which is, at any time, derived from residual or royalty22
payments due to a performing arts activity, including employment, trade, business,23
profession, or other activity performed or carried on within this state, with respect to24
a state certified production as defined in Code Sections 48-7-40.26.25
(ii) For the purposes of this subparagraph and subsection (b) of Code Section26
48-7-30, the term:27
(I)  'Performing arts activity' means any activity performed or completed as a part28
of a state certified production as defined in Code Sections 48-7-40.26.29
(II)  'Residual payments' means payments to writers, directors, or actors from30
rebroadcast or exploitation in a secondary market of a recorded production.31
(III) 'Royalty payments' means payments to an author or composer from the32
proceeds of a sale or performance of his or her work."33
SECTION 2.34
Said chapter is further amended by revising subsection (b) of Code Section 48-7-30, relating35
to taxation of nonresident's entire net income derived from activities within state, separate36
accounting possible, applicability, allowed deductions, and applicability of provisions for37
corporations to nonresidents, as follows:38
"(b)  A taxable nonresident whose income is derived from employment, trade, business,39
professional, or other activity, including but not limited to performing arts activity,40
performed or carried on within and outside this state shall be taxed only upon the income41
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derived from carrying on the activity within this state; provided, however, that all income42
derived from residual or royalty payments to a taxable nonresident due to employment,43
trade, business, profession, or other performing arts activity performed or carried on within44
this state, with respect to a state certified production as defined in Code Section 48-7-40.26,45
shall be taxable income whether such income is received within or outside of this state. 46
The amount of taxable income may be determined by a separate accounting of the income47
if the commissioner is satisfied that the separate accounting reflects correctly the income48
fairly attributable to this state. Otherwise, the amount of taxable income shall be49
determined in the manner prescribed by this chapter for the allocation and apportionment50
of income of corporations engaged in business within and outside this state."51
SECTION 3.52
Said chapter is further amended by revising Code Section 48-7-40.26, relating to income tax53
credits for film, gaming, video, or digital production, as follows:54
"48-7-40.26.55
(a)  This Code section shall be known and may be cited as the 'Georgia Entertainment56
Industry Investment Act.'57
(b)  As used in this Code section, the term:58
(1)  'Affiliates' means those entities that are included in the production company's or59
qualified interactive entertainment production company's affiliated group as defined in60
Section 1504(a) of the Internal Revenue Code and all other entities that are directly or61
indirectly owned 50 percent or more by members of the affiliated group.  For purposes62
of this Code section, notwithstanding its form of organization, a production company63
shall be deemed a member of an affiliated group if it is directly or indirectly owned 5064
percent or more by one or more members of an affiliated group.65
(2)  'Base investment' means the aggregate funds actually invested and expended by a66
production company or qualified interactive entertainment production company as67
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production expenditures incurred in this state that are directly used in a state certified68
production or productions.69
(3)  'Game platform' means the electronic delivery system used to launch or play an70
interactive game.71
(4) 'Game sequel' means an interactive game which builds upon the theme of a72
previously released interactive game, is distinguished by a new title, and features73
objectives or characters that are recognizably different from the original game.74
(5)(3) 'Multimarket commercial distribution' means paid commercial distribution with75
media buys which extend to markets outside the State of Georgia.76
(6)  'Prereleased interactive game' means a new game, the offering of an existing game77
on a new game platform, or a game sequel that is in the developmental stages of78
production, which may be available to individuals for testing purposes but is not79
generally made available or distributed to consumers or to the general public.80
(7)(4) 'Production company' means a company, other than a qualified interactive81
entertainment production company, primarily engaged in qualified production activities82
which have been approved by the Department of Economic Development.  This Such83
term shall not mean or include any form of business owned, affiliated, or controlled, in84
whole or in part, by any company or person which is in default on any tax obligation of85
the state, or a loan made by the state or a loan guaranteed by the state.86
(8)(5) 'Production expenditures' means:87
(A)  Preproduction, production, and postproduction expenditures incurred in this state88
that are directly used in a qualified production activity, including, but not limited to, the89
following: set construction and operation; wardrobes, make-up, accessories, and related90
services; costs associated with photography and sound synchronization; expenditures91
excluding license fees incurred with Georgia companies for sound recordings and92
musical compositions; sound recording projects used in feature films, series, pilots, or93
movies; lighting and related services and materials; editing and related services; rental94
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of facilities and equipment; leasing of vehicles; costs of food and lodging; digital or95
tape editing; film processing; transfers of film to tape or digital format; sound mixing;96
computer graphics services; special effects services; visual effects services; animation97
services; total aggregate payroll; airfare, if purchased through a Georgia travel agency98
or travel company; insurance costs and bonding, if purchased through a Georgia99
insurance agency; and other direct costs of producing the project in accordance with100
generally accepted entertainment industry practices.;101
(B)  This Such term shall not include:102
(i)  Postproduction expenditures for footage shot outside the State of Georgia this103
state, marketing, story rights, or distribution;104
(ii)  Any expenditure for work or services not conducted or rendered in Georgia this105
state.  Expenditures for services not performed at the filming site shall only qualify106
if the vendor is a Georgia vendor.  Expenditures for services conducted or rendered107
both in Georgia and outside Georgia this state shall only qualify to the extent the108
service is conducted or rendered in Georgia;109
(iii)  Expenditures for goods that were not purchased or rented or leased in this state110
from a Georgia vendor.  Expenditures for goods shall only qualify to the extent such111
goods are used in this state.  A vendor that acts as a conduit to enable purchases or112
rentals to qualify that would not otherwise qualify shall not be considered a Georgia113
vendor with respect to such purchases, rentals, or leases; or114
(iv)  Any transaction subject to taxation imposed by Chapter 8 or 13 of this title for115
which taxes have not been demonstrably paid.;116
(C)  This Such term includes payments to a loan-out company by a production company117
or qualified interactive entertainment production company that has met its withholding118
tax obligations as set out below provided in this paragraph.  The production company119
or qualified interactive entertainment production company shall withhold Georgia120
income tax at the rate imposed by subsection (a) of Code Section 48-7-21 on all121
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payments to loan-out companies for services performed in Georgia.  Any amounts so122
withheld shall be deemed to have been withheld by the loan-out company on wages123
paid to its employees for services performed in Georgia pursuant to Article 5 of this124
chapter notwithstanding the exclusion provided in subparagraph (K) of paragraph (10)125
of Code Section 48-7-100.  The amounts so withheld shall be allocated to the loan-out126
company's employees based on the payments made to the loan-out company's127
employees for services performed in Georgia.  For purposes of this chapter, loan-out128
company nonresident employees performing services in Georgia shall be considered129
taxable nonresidents and the loan-out company shall be subject to income taxation in130
the taxable year in which the loan-out company's employees perform services in131
Georgia, notwithstanding any other provisions in this chapter.  Such withholding132
liability shall be subject to penalties and interest in the same manner as the employee133
withholding taxes imposed by Article 5 of this chapter and the commissioner shall134
provide by regulation the manner in which such liability shall be assessed and135
collected.; and136
(D) Production expenditures by a production company shall be subject to any137
limitations or reductions imposed by subsection (l) (k) of this Code section.138
(9)(6) 'Qualified Georgia promotion' means a qualified promotion of this state approved139
by the Department of Economic Development consisting of a:140
(A)  Qualified movie production which includes a five-second long static or animated141
logo that promotes Georgia in the end credits before the below-the-line crew crawl for142
the life of the project and which includes a link to Georgia on the project's web page;143
(B)  Qualified TV production which includes an embedded five-second long Georgia144
promotion during each broadcast worldwide for the life of the project and which145
includes a link to Georgia on the project's web page; or146
(C)  Qualified music video which includes the Georgia logo at the end of each video147
and within online promotions; or148
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(D)  Qualified interactive game which includes a 15 second long Georgia advertisement149
in units sold and embedded in online promotions.150
(10)  'Qualified interactive entertainment production company' means a company that:151
(A)  Maintains a business location physically located in Georgia;152
(B)(i)  Through December 31, 2017, in the calendar year directly preceding the start153
of the taxable year of the qualified interactive entertainment production company, had154
a total aggregate payroll of $500,000.00 or more for employees working within the155
state; or156
(ii)  On or after January 1, 2018, had a total aggregate payroll of $250,000.00 or more157
for employees working within the state in the taxable year the qualified interactive158
entertainment production company claims the tax credits;159
(C)  Has gross income less than $100 million for the taxable year; and160
(D) Is primarily engaged in qualified production activities related to interactive161
entertainment which have been approved by the Department of Economic162
Development.163
This term shall not mean or include any form of business owned, affiliated, or controlled,164
in whole or in part, by any company or person which is in default on any tax obligation165
of the state, or a loan made by the state or a loan guaranteed by the state.166
(11)(7) 'Qualified production activities' means the production of new film, video, or167
digital projects produced in this state and approved by the Department of Economic168
Development as state certified productions, including only the following: feature films,169
series, pilots, movies for television, televised commercial advertisements, and music170
videos, interactive entertainment, or prereleased interactive games.  Such activities term171
shall include projects recorded in this state, in whole or in part, in either short or long172
form, animation and music, fixed on a delivery system which includes without limitation173
film, videotape, computer disc, laser disc, and any element of the digital domain, from174
which the program is viewed or reproduced, and which is intended for multimarket175
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commercial distribution via theaters, video on demand, direct to DVD, digital platforms176
designed for the distribution of interactive games, licensing for exhibition by individual177
television stations, groups of stations, networks, advertiser supported sites paid178
subscription based platform, cable television stations, or public broadcasting stations. 179
Such term shall not include the coverage of news or athletic events, local interest180
programming, instructional videos, corporate videos, any project that is not intended for181
multimarket commercial distribution, or any project not shot, recorded, or originally182
created in Georgia.183
(12)(8) 'Resident' means an individual as designated pursuant to paragraph (10) of Code184
Section 48-7-1, as amended.185
(13)(9) 'State certified production' means a production engaged in qualified production186
activities which have been approved by the Department of Economic Development in187
accordance with regulations promulgated pursuant to this Code section.  In the instance188
of a 'work work for hire' hire in which one production company or qualified interactive189
entertainment production company hires another production company or qualified190
interactive entertainment production company to produce a project or contribute elements191
of a project for pay, the hired company shall be considered a service provider for the192
hiring company, and the hiring company shall be entitled to the film tax credit allowed193
under this Code section.194
(14)(10) 'Total aggregate payroll' means the total sum expended by a production195
company or qualified interactive entertainment production company on salaries paid to196
employees working within this state in a state certified production or productions.  For197
purposes of this paragraph:198
(A)  With respect to a single employee, the portion of any salary which exceeds199
$500,000.00 for a single production shall not be included when calculating total200
aggregate payroll; and201
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(B)  All payments to a single employee and any legal entity in which the employee has202
any direct or indirect ownership interest shall be considered as having been paid to the203
employee and shall be aggregated regardless of the means of payment or distribution.204
(c) For any production company or qualified interactive entertainment production205
company and its affiliates that invest in a state certified production approved by the206
Department of Economic Development and whose average annual total production207
expenditures in this state did not exceed $30 million for 2002, 2003, and 2004, there shall208
be allowed an income tax credit against the tax imposed under this article.  The tax credit209
under this subsection shall be allowed if the base investment by a production company and210
its affiliates that invest in state certified productions in this state equals or exceeds211
$500,000.00 $750,000.00 for qualified production activities a single state certified212
production or $8 million for all state certified productions, except that any qualified213
interactive entertainment production company shall be allowed the tax credit under this214
subsection if the base investment in this state equals or exceeds $250,000.00 for qualified215
production activities on or after January 1, 2018, and shall be calculated as follows:216
(1)  The production company or qualified interactive entertainment production company217
shall be allowed a tax credit equal to 20 percent of the base investment in this state; and218
(2)(A)  The production company or qualified interactive entertainment production219
company shall be allowed an additional tax credit equal to 10 percent of such base220
investment if, as determined as a result of the audit required by subsection (k) of this221
Code section, the qualified production activity includes a qualified Georgia promotion. 222
Such additional tax credit shall be allowed for any qualified production that includes223
a qualified Georgia promotion upon its release to the general public.  In lieu of the224
inclusion of the Georgia promotional logo, the production company or qualified225
interactive entertainment production company may offer alternative marketing226
opportunities to be evaluated by the Department of Economic Development to ensure227
that they offer equal or greater promotional value to the State of Georgia. The228
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Department of Economic Development shall electronically certify to the Department229
of Revenue when the requirements of this subparagraph and paragraph (2) of subsection230
(d) of this Code section have been met. state certified production meets at least four of231
the following criteria:232
(i)  At least 50 percent of the number of crew members performing services in this233
state are Georgia residents;234
(ii)  At least 50 percent of the total number of vendors providing goods or services in235
this state are Georgia vendors;236
(iii)  It incurs at least $30 million of production expenditures in this state;237
(iv)  At least 50 percent of its principal photography days occur in one or more238
counties that have been underutilized by production companies as listed by the239
Department of Economic Development as of January 1, 2026;240
(v)  At least 50 percent of its principal photography days in studio facilities are in241
studio facilities in this state, including, but not limited to, soundstages and backlots,242
or the company or its affiliates:243
(I)   Make capital improvements to a studio facility in this state that are in a form244
and manner approved by the Department of Economic Development based on the245
value of the capital improvements relative to the amount of tax credit sought; or 246
(II)  Owns a studio facility in this state or enters into a lease of at least five years in247
duration with a studio facility in this state with at least 100,000 square feet of248
production space, including, but not limited to, soundstages, backlots, and249
production offices;250
(vi)  The company contracts with Georgia vendors for 20 percent of such production's251
postproduction expenditures or contracts with Georgia vendors for 20 percent of such252
production's visual effects expenditures;253
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(vii) The company participates in or supports at least one Georgia workforce254
development program, including, but not limited to, a Georgia Film Academy255
program;256
(viii) It includes a qualified Georgia promotion, or the company engages in257
alternative marketing opportunities approved by the Department of Economic258
Development based on a determination that such activities offer promotional value259
to the state  equal to or greater than the promotional value of a qualified Georgia260
promotion; or261
(ix)  The company contracts for the recording in Georgia of elements of the state262
certified production's music score or one or more songs included in the state certified263
production's soundtrack, licenses music from a Georgia resident or company doing264
business in Georgia, or contracts with one or more Georgia residents for the265
composition or performance of music for incorporation into the state certified266
production's music score or one or more songs included into the state certified267
production's soundtrack.268
(B)  The Department of Economic Development shall prepare an annual report detailing269
the alternative marketing opportunities it has approved under the provisions of270
subparagraph (A) of this paragraph.  The report shall include, but not be limited to:271
(i)  The goals and strategy behind each alternative marketing opportunity approved272
pursuant to the provisions of subparagraph (A) of this paragraph;273
(ii)  The names of all production companies approved by the Department of Economic274
Development to provide alternative marketing opportunities;275
(iii) The estimated value to the state of each approved alternative marketing276
opportunity compared to the estimated value of the Georgia promotional logo; and277
(iv)  The names of all production companies who that chose to include the Georgia278
promotional logo in their its final production instead of offering the state an279
alternative marketing proposal.280
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The report required under this paragraph subparagraph shall be completed no later than281
January 1 of each year and presented to each member of the House Committee on Ways282
and Means, the Senate Finance Committee, the Senate Economic Development and283
Tourism Committee, the House Committee on Economic Development and Tourism,284
and the Governor.285
(C)  The additional percentage of tax credit allowed by this paragraph and by paragraph286
(2) of subsection (d) of this Code section shall not be allowed to a production company287
for any qualified production activity or state certified production that has not been288
commercially distributed in multiple markets.289
(D)  The additional percentage of tax credit that is allowed by this paragraph and by290
paragraph (2) of subsection (d) of this Code section shall not be issued final291
certification pursuant to subsection (l) (k) of this Code section unless and until the state292
certified production has been commercially distributed in multiple markets within five293
years of the date that the project was first certified by the Department of Economic294
Development.; and295
(3)  The base investment and the amount of the credit allowed by this subsection and by296
subsection (d) of this Code section with respect to a production company shall be subject297
to the limitations of and any reductions required by subsection (l) (k) of this Code section.298
(d) For any production company or qualified interactive entertainment production299
company and its affiliates that invest in a state certified production approved by the300
Department of Economic Development and whose average annual total production301
expenditures in this state exceeded $30 million for 2002, 2003, and 2004, there shall be302
allowed an income tax credit against the tax imposed under this article.  For purposes of303
this subsection, the excess base investment in this state is computed by taking the current304
year production expenditures in a state certified production and subtracting the average of305
the annual total production expenditures for 2002, 2003, and 2004.  The tax credit shall be306
calculated as follows:307
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(1)  If the excess base investment by a production company and its affiliates that invest308
in state certified productions in this state equals or exceeds $500,000.00 $750,000.00 for309
a single state certified production or $8 million for all state certified productions, or310
$250,000.00 for qualified interactive entertainment production activities on or after311
January 1, 2018, the production company or qualified interactive entertainment312
production company and its affiliates shall be allowed a tax credit of 20 percent of such313
excess base investment; and314
(2)(A) The production company or qualified interactive entertainment production315
company and its affiliates shall be allowed an additional tax credit equal to 10 percent of316
the excess base investment if, as determined as a result of the audit required by subsection317
(k) of this Code section, the qualified production activities include a qualified Georgia318
promotion.  Such additional tax credit shall be allowed for any qualified production that319
includes a qualified Georgia promotion upon its release to the general public.  In lieu of320
the inclusion of the Georgia promotional logo, the production company or qualified321
interactive entertainment production company may offer marketing opportunities to be322
evaluated by the Department of Economic Development to ensure that they offer equal323
or greater promotional value to the State of Georgia state certified production meets at324
least four of the criteria provided in divisions (c)(2)(A)(i) through (c)(2)(A)(ix).325
(B)  The Department of Economic Development shall prepare an annual report detailing326
the marketing opportunities it has approved under the provisions of subparagraph (A)327
of this paragraph.  The report shall include, but not be limited to:328
(i)  The goals and strategy behind each marketing opportunity approved pursuant to329
the provisions of subparagraph (A) of this paragraph;330
(ii)  The names of all production companies approved by the Department of Economic331
Development to provide alternative marketing opportunities;332
(iii) The estimated value to the state of each approved alternative marketing333
opportunity compared to the estimated value of the Georgia promotional logo; and334
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(iv)  The names of all production companies who chose to include the Georgia335
promotional logo in their final production instead of offering the state an alternative336
marketing proposal.337
The report required under this paragraph shall be completed no later than January 1 of338
each year and presented to each member of the House Committee on Ways and Means,339
the Senate Finance Committee, the Senate Economic Development and Tourism340
Committee, the House Committee on Economic Development and Tourism, and the341
Governor.342
(e)(1)  In no event shall the aggregate amount of tax credits allowed under this Code343
section for qualified interactive entertainment production companies and affiliates exceed344
$25 million for taxable years beginning on or after January 1, 2013, and before January345
1, 2014.  The maximum credit for any qualified interactive entertainment production346
company and its affiliates shall be $5 million for such taxable year.  When the $25347
million cap is reached, the tax credit for qualified interactive entertainment production348
companies shall expire for such taxable years.349
(2)  For taxable years beginning on or after January 1, 2014, and before January 1, 2015,350
the amount of tax credits allowed under this Code section for qualified interactive351
entertainment production companies and affiliates shall not exceed $12.5 million.352
(3)  For taxable years beginning on or after January 1, 2015, and before January 1, 2016,353
the amount of tax credits allowed under this Code section for qualified interactive354
entertainment production companies and affiliates shall not exceed $12.5 million.355
(4)  For taxable years beginning on or after January 1, 2016, and before January 1, 2018,356
the amount of tax credits allowed under this Code section for qualified interactive357
entertainment production companies and affiliates shall not exceed $12.5 million for each358
taxable year.359
(5)(A)  For taxable years beginning on or after January 1, 2018, the amount of tax360
credits allowed under this Code section for qualified interactive entertainment361
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production companies and affiliates shall not exceed $12.5 million for each taxable362
year.363
(B) Beginning on or after January 1, 2018, qualified interactive entertainment364
production companies are eligible for tax credits for prereleased interactive game365
production; provided, however, that such credits shall not be available for a period366
which exceeds three years.367
(6)  The maximum allowable credit claimed for any qualified interactive entertainment368
production company and its affiliates shall not exceed $1.5 million in any single year.369
(7)  Qualified interactive entertainment production companies seeking to claim a tax370
credit under the provisions of this Code section shall submit an application to the371
commissioner for preapproval of such tax credit.  The commissioner shall be authorized372
to promulgate any rules and regulations and forms necessary to implement and administer373
the provisions of this Code section.  The commissioner shall preapprove the tax credits374
based on the order in which properly completed applications were submitted.  In the375
event that two or more applications were submitted on the same day and the amount of376
funds available will not be sufficient to fully fund the tax credits requested, the377
commissioner shall prorate the available funds between or among the applicants.378
(8)  No qualified interactive entertainment production company shall be allowed to claim379
an amount of tax credits under this Code section for any single year in excess of its total380
aggregate payroll expended to employees working within this state for the calendar year381
that the qualified interactive entertainment production company claims the tax credits. 382
Any amount in excess of such limit shall not be eligible for carry forward to the383
succeeding years' tax liability, nor shall such excess amount be eligible for use against384
the qualified interactive entertainment production company's quarterly or monthly385
payment under Code Section 48-7-103, nor shall such excess amount be assigned, sold,386
or transferred to any other taxpayer.387
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(9)  Before the Department of Economic Development issues its approval to the qualified388
interactive entertainment production company for the qualified production activities389
related to interactive entertainment, the qualified interactive entertainment production390
company must certify to the department that:391
(A)  The qualified interactive entertainment production company maintains a business392
location physically located in this state; and393
(B)  The qualified interactive entertainment production company had expended a total394
aggregate payroll of $500,000.00 or more, or $250,000.00 or more on or after January395
1, 2018, for employees working within this state during the taxable year of the qualified396
interactive entertainment production company.397
The department shall issue a certification that the qualified interactive entertainment398
production company meets the requirements of this paragraph; provided, however, that399
the department shall not issue any certifications before July 1, 2014.  The qualified400
interactive entertainment production company shall provide such certification to the401
Department of Economic Development.  The Department of Economic Development402
shall not issue its approval until it receives such certification.403
(10)(A) For taxable years beginning on or after January 1, 2016, the qualified404
interactive entertainment production company shall report to the Department of405
Revenue on its Georgia income tax return the monthly average number of full-time406
employees subject to Georgia income tax withholding for the taxable year as provided407
in subparagraphs (B) and (C) of this paragraph.  For purposes of this paragraph, a408
full-time employee shall mean a person who performs a job that requires a minimum409
of 35 hours a week, and pays at or above the average wage earned in the county with410
the lowest average wage earned in this state, as reported in the most recently available411
annual issue of the Georgia Employment and Wages Averages Report of the412
Department of Labor.413
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(B)  For taxable years beginning on or after January 1, 2016, and before January 1,414
2017, the qualified interactive entertainment production company shall report such415
number for such taxable year and separately for each of the prior two taxable years.416
(C)  For taxable years beginning on or after January 1, 2017, the qualified interactive417
entertainment production company shall report such number for each respective taxable418
year.419
(D)  Notwithstanding Code Sections 48-2-15, 48-7-60, and 48-7-61, for such taxable420
years, the commissioner shall report yearly to the House Committee on Ways and421
Means and the Senate Finance Committee.  The report shall include the name, tax year422
beginning, and monthly average number of full-time employees for each qualified423
interactive entertainment production company.  The first report shall be submitted by424
June 30, 2016, and each year thereafter by June 30.425
(f)(1)(e)(1) Where If the amount of such credit or credits tax credits allowed under this426
Code section exceeds the production company's or qualified interactive entertainment427
production company's liability for such taxes owed pursuant to this article in a taxable428
year, the excess may be taken as a credit against such production company's or qualified429
interactive entertainment production company's quarterly or monthly payment under430
Code Section 48-7-103.  Each employee whose employer receives credit against such431
production company's or qualified interactive entertainment production company's432
quarterly or monthly payment under Code Section 48-7-103 shall receive credit against433
his or her income tax liability under Code Section 48-7-20 for the corresponding taxable434
year for the full amount which would be credited against such liability prior to the435
application of the credit provided for in this subsection.  Credits against quarterly or436
monthly payments under Code Section 48-7-103 and credits against liability under Code437
Section 48-7-20 established by this subsection shall not constitute income to the438
production company or qualified interactive entertainment production company.439
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(2)  If a production company and its affiliates, or a qualified interactive entertainment440
production company and its affiliates, claim the a credit authorized under Code Section441
48-7-40, 48-7-40.1, 48-7-40.17, or 48-7-40.18, then the production company and its442
affiliates, or the qualified interactive entertainment production company and its affiliates,443
will shall only be allowed to claim the credit authorized under this Code section to the444
extent that the Georgia resident employees included in the credit calculation authorized445
under this Code section and taken by the production company and its affiliates, or the446
qualified interactive entertainment production company and its affiliates, on such tax447
return under this Code section have been permanently excluded from the credit448
authorized under Code Section 48-7-40, 48-7-40.1, 48-7-40.17, or 48-7-40.18.449
(g)(f) Any tax credits with respect to a state certified production earned by a production450
company or qualified interactive entertainment production company and previously451
claimed but not used by such production company or qualified interactive entertainment452
production company against its income tax liability may be transferred or sold in whole or453
in part by such production company or qualified interactive entertainment production454
company to another Georgia taxpayer,; provided, however, that such transfers and sales455
shall be subject to the following conditions:456
(1)(A)  The total amount of all transfers or sales in a calendar year shall not exceed an457
amount equal to 2.3 percent of the total budget in the General Appropriations Act as458
passed and signed into law for the corresponding fiscal year.459
(B)  The Department of Revenue shall issue tax credit certificates that identify the460
calendar year in which the credit may first be transferred or sold.  Such tax credit461
certificates shall identify the current calendar year as the first year such certificates may462
be transferred or sold for the amount of credits allowed to be transferred or sold463
pursuant to subparagraph (A) of this paragraph.464
(C)  Any tax credit certificates available to be issued by the Department of Revenue in465
the current calendar year in excess of the amount of credits allowed to be transferred466
- 18 - 24 LC 50 0918S
or sold pursuant to subparagraph (A) of this paragraph shall be issued and available to467
be transferred or sold in the next calendar year for which such amount has not been468
reached in the order in which final certificates were available to be issued by the469
department but for reaching the annual limit, and the amount of such credit certificates470
shall count toward the amount of credits allowed to be transferred or sold pursuant to471
subparagraph (A) of this paragraph for that year.472
(D)  A production company may elect to not transfer or sell in whole or in part tax473
credits with respect to a state certified production to another Georgia taxpayer pursuant474
to subsection (f) of this Code section and may use such tax credit in the taxable year in475
which it is issued final certification.  Tax credits that a production company makes an476
election to not sell or transfer shall not count toward the maximum amount allowed to477
be transferred or sold pursuant to subparagraph (A) of this paragraph.  The production478
company shall make the election on a form and in a manner provided by the479
department.480
(E)   A tax credit certificate issued pursuant to subparagraph (B) or subparagraph (C)481
of this paragraph shall count toward the amount of credits allowed to be transferred or482
sold pursuant to subparagraph (A) of this paragraph only in the year such certificate483
was issued by the Department of Revenue;484
(1)(2) Such production company or qualified interactive entertainment production485
company may make only a single transfer or sale of tax credits earned in a taxable year;486
provided, however, that the transfer or sale may involve one or more transferees;487
(2)(3) Such production company or qualified interactive entertainment production488
company shall submit to the Department of Economic Development and to the489
Department of Revenue a written notification of any transfer or sale of tax credits within490
30 days after the transfer or sale of such tax credits.  The notification shall include such491
production company's or qualified interactive entertainment production company's tax492
credit balance prior to transfer, the credit certificate number, the remaining balance after493
- 19 - 24 LC 50 0918S
transfer, all tax identification numbers for each transferee, the date of transfer, the amount494
transferred, and any other information required by the Department of Economic495
Development or the Department of Revenue;496
(3)(4) Failure to comply with this subsection shall result in the disallowance of the tax497
credit until the production company or qualified interactive entertainment production498
company is in full compliance;499
(4)(5) The transfer or sale of this tax credit does not extend the time in which such tax500
credit can be used.  The carry-forward period for a tax credit that is transferred or sold501
shall begin on the date on which the tax credit was originally earned or for a tax credit502
subject to the provisions of subsection (l) (k) of this Code section, the date on which the503
final certification for such tax credit was issued pursuant to said subsection;504
(5)(6) A transferee shall have only such rights to claim and use the tax credit that were505
available to such production company or qualified interactive entertainment production506
company at the time of the transfer, except for the use of the credit in paragraph (l) (k)507
of subsection (f) (e) of this Code section.  To the extent that such production company508
or qualified interactive entertainment production company did not have rights to claim509
or use the tax credit at the time of the transfer, the Department of Revenue shall either510
disallow the tax credit claimed by the transferee or recapture the tax credit from the511
transferee; provided, however, that the Department of Revenue shall not recapture a tax512
credit from the transferee if the tax credit was issued a valid final certification pursuant513
to subsection (l) (k) of this Code section.  The transferee's recourse is against such514
production company or qualified interactive entertainment production company515
transferor; and516
(6)(7) The transferee must shall acquire the tax credits in this Code section for a517
minimum of 60 percent of the amount of the tax credits so transferred.518
- 20 - 24 LC 50 0918S
(h)  The credit granted under this Code section shall be subject to the following conditions519
and limitations; provided, however, that this subsection shall not apply to a production520
company subject to the requirements of subsection (h.1) or (l) of this Code section:521
(1)  The credit may be taken beginning with the taxable year in which the production522
company or qualified interactive entertainment production company has met the523
investment requirement.  For each year in which such production company or qualified524
interactive entertainment production company either claims or transfers the credit, the525
production company or qualified interactive entertainment production company shall526
attach a schedule to the production company's or qualified interactive entertainment527
production company's Georgia income tax return which will set forth the following528
information, as a minimum:529
(A)  A description of the qualified production activities, along with the certification530
from the Department of Economic Development;531
(B)  A detailed listing of the employee names, social security numbers, and Georgia532
wages when salaries are included in the base investment;533
(C)  The amount of tax credit claimed for the taxable year;534
(D)  Any tax credit previously taken by the production company or qualified interactive535
entertainment production company against Georgia income tax liabilities or the536
production company's or qualified interactive entertainment production company's537
quarterly or monthly payments under Code Section 48-7-103;538
(E)  The amount of tax credit carried over from prior years;539
(F) The amount of tax credit utilized by the production company or qualified540
interactive entertainment production company in the current taxable year; and541
(G)  The amount of tax credit to be carried over to subsequent tax years;542
(2) In the initial year in which the production company or qualified interactive543
entertainment production company claims the credit granted in this Code section, the544
production company or qualified interactive entertainment production company shall545
- 21 - 24 LC 50 0918S
include in the description of the qualified production activities required by subparagraph546
(A) of paragraph (1) of this subsection information which demonstrates that the activities547
included in the base investment or excess base investment equal or exceed $500,000.00548
during such year, or $250,000.00 on or after January 1, 2018, for qualified interactive549
entertainment production companies; and550
(3)  In no event shall the amount of the tax credit under this Code section for a taxable551
year exceed the production company's or qualified interactive entertainment production552
company's income tax liability.  Any unused credit amount shall be allowed to be carried553
forward for five years from the close of the taxable year in which the investment554
occurred. No such credit shall be allowed the production company or qualified555
interactive entertainment production company against prior years' tax liability.556
(h.1)(1)  For any projects certified by the Department of Economic Development on or557
after January 1, 2021, the558
(f.1)(1)  As used in this subsection, the term 'Georgia based qualified production facility'559
means a facility consisting of purpose-built studio sound stages:560
(A)  That was substantially completed between January 1, 2023, and June 30, 2027, and561
in which the construction investment for such facility was in excess of $100 million562
dollars for such purpose-built studio sound stages; or563
(B)  That has more than 1.5 million square feet of stage space.564
(2)  The conditions provided in paragraph (1) of subsection (f) shall not apply to tax565
credits for state certified productions that meet one of the following criteria:566
(A) The state certified production filmed at least 50 percent of its principal567
photography days in a Georgia based qualified production facility; or568
(B) The state certified production filmed at least 50 percent of its principal569
photography days in one or more counties that have been underutilized by production570
companies as listed by the Department of Economic Development as of January 1,571
2026.572
- 22 - 24 LC 50 0918S
(3)  To qualify for the exemption from the conditions provided in paragraph (1) of573
subsection (f) pursuant to this subsection, the Georgia based qualified production facility574
shall submit such documentation as required by the Department of Economic575
Development to show that the criteria of paragraph (2) of this subsection have been met. 576
The Department of Economic Development shall certify each state certified production577
that meets such requirements and submit such certification to the Department of Revenue.578
(g)(1)  The tax credit provided for in this Code section if covered under the schedule579
provided in paragraph (1) of subsection (l) of this Code section shall not be allowed,580
claimed, assigned, sold, transferred, or utilized in any manner by a production company581
until final certification is issued pursuant to subsection (l) (k) of this Code section and582
except under the following conditions and limitations of provided in this subsection.583
(2)  A production company seeking the tax credit allowed by this Code section shall584
apply for the tax credit in the manner provided by the Department of Revenue within one585
year from the date that it completes a state certified production. The following586
information shall be submitted with the application or prior to the commencement of an587
audit required by subsection (l) (k) of this Code section:588
(A)  A description of the state certified production, along with its certification as a state589
certified production by the Department of Economic Development;590
(B)  A detailed accounting of all qualified production activities and the attendant591
production expenditures included in the base investment for the state certified592
production;593
(C)  A detailed listing of the employee names, social security numbers, and Georgia594
wages when salaries are included in the base investment;595
(D) Receipts for tangible personal property included in the base investment as596
requested by the Department of Revenue or the eligible auditor hired to conduct the597
audit for the state certified production;598
- 23 - 24 LC 50 0918S
(E)  Contracts for goods or services included in the base investment as requested by the599
Department of Revenue or the eligible auditor hired to conduct the audit for the state600
certified production;601
(F)  An Internal Revenue Service Form W-9 completed and issued by each vendor for602
which expenditures are included in the base investment as requested by the Department603
of Revenue or the eligible auditor hired to conduct the audit for the state certified604
production;605
(G)  Notification as provided for in paragraph (7) of subsection (l) (k) of this Code606
section of any intent to utilize an eligible auditor;607
(H)  A description of the status of the distribution of the state certified production and608
information related to any qualified Georgia promotion connected with such609
production;610
(I)  For any projects certified by the Department of Economic Development on or after611
January 1, 2026, a description of the status of satisfying the requirements of612
subparagraph (c)(2)(A) or paragraph (2) of subsection (d) if the total amount of the tax613
credit sought for the state certified production includes the additional credit allowed in614
subparagraph (c)(2)(A) or paragraph (2) of subsection (d);615
(I)(J) The total amount of the tax credit sought for the state certified production; and616
(J)(K) A statement affirming that the contents of the application are true and correct.617
(3)  If a production company is issued final certification of a tax credit pursuant to618
subsection (l) (k) of this Code section, such tax credit shall be considered earned in the619
taxable year in which it is issued final certification.620
(4)  For each year in which the production company either claims or transfers the tax621
credit, the production company shall attach a schedule to the production company's622
Georgia income tax return which will shall set forth the following information, as a623
minimum:624
(A)  The amount of tax credit claimed for the taxable year;625
- 24 - 24 LC 50 0918S
(B)  Any tax credit previously taken by the production company against Georgia626
income tax liabilities or the production company's quarterly or monthly payments under627
Code Section 48-7-103;628
(C)  The amount of tax credit carried over from prior years;629
(D)  The amount of tax credit utilized by the production company in the current taxable630
year; and631
(E)  The amount of tax credit to be carried over to subsequent tax years.632
(5)  In no event shall the amount of the tax credit subject to subsection (l) (k) of this Code633
section for a taxable year exceed the production company's income tax liability.  Any634
unused credit amount shall be allowed to be carried forward for three years from the close635
of the taxable year in which the tax credit was issued its final certification pursuant to636
subsection (l) (k) of this Code section.  No such credit shall be allowed the production637
company against prior years' tax liability.638
(6)  This subsection shall not apply to qualified interactive entertainment production639
companies.640
(i)(h)(1) The Department of Economic Development shall:641
(A)  Certify each production that qualifies determine through the promulgation of rules642
and regulations what projects qualify for the tax credits authorized under paragraph (1)643
of subsection (c) of this Code section and paragraph (1) of subsection (d) of this Code644
section.;645
(B)  Establish an approval process for any criteria that require approval from the646
Department of Economic Development as provided in divisions (c)(2)(A)(v) and647
(c)(2)(A)(viii) of this Code section;648
(C) Submit such certifications and approvals Certification shall be submitted to the state649
revenue commissioner; and650
(D)  Promulgate rules and regulations as are necessary to implement this subsection.651
- 25 - 24 LC 50 0918S
(2)  The Department of Economic Development may charge reasonable fees associated652
with the certification process established pursuant to this paragraph.653
(3) If the Department of Economic Development prevails in court in an appeal of the654
denial of certification, the production company shall pay all court costs.655
(j)(i) The state revenue commissioner shall promulgate such rules and regulations as are656
necessary to implement and administer this Code section.657
(k)(j) Any production company, except as provided in subsection (l) (k) of this Code658
section, or qualified interactive entertainment production company claiming, transferring,659
or selling the tax credit shall be required to reimburse the Department of Revenue for any660
department initiated audits relating to the tax credit.  This subsection shall not apply to661
routine tax audits of a taxpayer which may include the review of the credit provided in this662
Code section.663
(l)(k)(1)(A)  For any project certified by the Department of Economic Development on664
or after January 1, 2021, a tax credit allowed by this Code section to a production665
company shall not be claimed, assigned, sold, transferred, or utilized in any manner until666
the production company applies for the tax credit as provided in subsection (h.1) of this667
Code section and the department issues a final certification of the tax credit pursuant to668
this subsection if the total amount of such tax credit sought for the project exceeds $2.5669
million.670
(B)  For any project certified by the Department of Economic Development on or after671
January 1, 2022, a tax credit allowed by this Code section to a production company672
shall not be claimed, assigned, sold, transferred, or utilized in any manner until the673
production company applies for the tax credit as provided in subsection (h.1) of this674
Code section and the department issues a final certification of the tax credit pursuant675
to this subsection if the total amount of such tax credit sought for the project exceeds676
$1.25 million.677
- 26 - 24 LC 50 0918S
(C)  For any project certified by the Department of Economic Development on or after678
January 1, 2023, a No tax credit allowed by this Code section to a production company679
shall not be claimed, assigned, sold, transferred, or utilized in any manner until the680
production company applies for the tax credit as provided in subsection (h.1) (g) of this681
Code section and the department issues a final certification of the tax credit pursuant682
to this subsection.683
(2)  In accordance with the schedule provided in paragraph (1) of this subsection, prior684
Prior to certifying a tax credit pursuant to this Code section, the Department of Revenue685
shall conduct or cause to be conducted an audit of each tax credit allowed by this Code686
section by either the department or an independent third party certified by the department687
in accordance with paragraph (3) of this subsection as an eligible auditor.688
(3)(A) The Department of Revenue shall provide for the certification and689
decertification of certified public accountants as eligible auditors.690
(B)  To obtain certification as an eligible auditor, an accountant shall:691
(i)  Register with the department;692
(ii)  Maintain its registration with the Georgia State Board of Accountancy;693
(iii)  Agree to and be capable of completing audits related to this Code section in694
accordance with this Code section and procedures developed by the department;695
(iv)  Successfully complete all training required by the department;696
(v)  Pay to the department a registration fee that the department shall set in an amount697
that reflects the expenses incurred by the department as a result of this paragraph; and698
(vi)  Post and maintain any bond that the department establishes may require for each699
eligible auditor.700
(C)  The Department of Revenue shall decertify an eligible auditor if such auditor:701
(i)  Fails to meet the conditions or comply with the provisions of subparagraph (B) of702
this paragraph; or703
- 27 - 24 LC 50 0918S
(ii) Completes an audit and violates the requirements of subparagraph (E) of704
paragraph (4) of this subsection.705
(D)  The Department of Revenue may decertify an eligible auditor if such auditor fails706
to complete an audit in accordance with subparagraph (A), (B), (C), (D), (F), or (G) of707
paragraph (4) of this subsection or meets any other grounds for decertification as708
provided in regulations promulgated by the department.709
(4)  Each audit shall:710
(A)  Be completed in accordance with this Code section and procedures developed by711
the department;712
(B)  Utilize sampling methods that the department may adopt;713
(C) Follow regulations that shall be published by the department regarding714
expenditures incurred with related persons or related members as such terms are715
defined in Code Section 48-7-28.3;716
(D)  Verify each reported expenditure that is included in the audit and identify and717
exclude each such expenditure that does not fully meet the conditions of this Code718
section;719
(E) Exclude any expenditure not submitted with or that was incurred after the720
application required by subsection (h.1) (g) of this Code section was submitted;721
(F)  Not be performed by an eligible accounting entity that is not determined to be722
independent as provided in the American Institute of Certified Public Accountants Code723
of Professional Conduct with respect to the production company or any of its related724
persons or related members as such terms are defined in Code Section 48-7-28.3 or as725
otherwise provided by the Department of Revenue; and726
(G)  Be submitted to the department which shall review the audit, make adjustments as727
necessary, and issue a final certification to the production company.728
(5)  The Department of Revenue shall:729
(A)  Promulgate rules and regulations and implement this subsection;730
- 28 - 24 LC 50 0918S
(B) Publish and regularly update a list of all eligible auditors that a production731
company may hire to conduct the audit required by this subsection;732
(C)  Publish on its public website the application for certification of eligible auditors733
as well as all requirements related to certification and conducting an audit pursuant to734
this subsection;735
(D)  Publish the registration fee required by division (3)(B)(v) of this subsection and736
any bond required pursuant to division (3)(B)(vi) of this subsection;737
(E)  Determine whether a sampling method shall be used for the audits required by this738
subsection, the appropriate sample method and size, and if a sampling method is used,739
ensure that it accurately captures a truly representative sample of all ineligible740
expenditures across all submitted expenditures and projects the type, rate, and amount741
of ineligible expenditures across all submitted expenditures;742
(F)  Perform the audit of expenditures when, due to confidentiality of information, the743
eligible auditor is unable to access necessary information that the department is able744
access;745
(G)  Review each audit conducted by an eligible auditor, conduct the portions of the746
audit described in subparagraph (F) of this paragraph, perform additional auditing as747
necessary, adjust the value of the tax credit as necessary, finalize the audit, and issue748
the final certification of the tax credit to the taxpayer; and749
(H)  For an audit that it conducts without an eligible auditor, complete the audit, adjust750
the value of the tax credit as necessary, and issue the final certification of the tax credit751
to the taxpayer.752
(6)  The production company applying for a final certification of a tax credit pursuant to753
this subsection shall agree and be required to reimburse the department for all costs754
incurred by the performance of a related audit, or any portion thereof, including for755
review of an audit conducted by an eligible auditor, prior to the issuance of such final756
certification.757
- 29 - 24 LC 50 0918S
(7)  The cost of any such audit whether conducted in whole or in part by the department,758
an eligible auditor, or a combination of the two shall be borne by the production company759
and shall not be included as an expenditure claimed pursuant to this Code section.760
(8)  This subsection shall not apply to qualified interactive entertainment production761
companies."762
SECTION 4.763
Said chapter is further amended by adding a new Code section to read as follows:764
"48-7-40.37.765
(a)  This Code section shall be known and may be cited as the 'Georgia Interactive766
Entertainment Industry Investment Act.'767
(b)  As used in this Code section, the term:768
(1) 'Affiliates' means those entities that are included in the qualified interactive769
entertainment production company's affiliated group as defined in Section 1504(a) of the770
Internal Revenue Code and all other entities that are directly or indirectly owned 50771
percent or more by members of the affiliated group.772
(2)  'Base investment' means the aggregate funds actually invested and expended by a773
qualified interactive entertainment production company as production expenditures774
incurred in this state that are directly used in a state certified production or productions.775
(3)  'Game platform' means the electronic delivery system used to launch or play an776
interactive game.777
(4) 'Game sequel' means an interactive game which builds upon the theme of a778
previously released interactive game, is distinguished by a new title, and features779
objectives or characters that are recognizably different from the original game.780
(5)  'Multimarket commercial distribution' means paid commercial distribution with781
media buys which extend to markets outside the State of Georgia.782
- 30 - 24 LC 50 0918S
(6)  'Prereleased interactive game' means a new game, the offering of an existing game783
on a new game platform, or a game sequel that is in the developmental stages of784
production, which may be available to individuals for testing purposes but is not785
generally made available or distributed to consumers or to the general public.786
(7)  'Production expenditures' means:787
(A)  Preproduction, production, and postproduction expenditures incurred in this state788
that are directly used in a qualified production activity, including, but not limited to, the789
following: set construction and operation; wardrobes, make-up, accessories, and related790
services; costs associated with photography and sound synchronization; expenditures791
excluding license fees incurred with Georgia companies for sound recordings and792
musical compositions; lighting and related services and materials; editing and related793
services; rental of facilities and equipment; leasing of vehicles; costs of food and794
lodging; digital or tape editing; sound mixing; computer graphics services; special795
effects services; animation services; total aggregate payroll; airfare, if purchased796
through a Georgia travel agency or travel company; insurance costs and bonding, if797
purchased through a Georgia insurance agency; and other direct costs of producing the798
project in accordance with generally accepted interactive entertainment industry799
practices;800
(B)  Such term shall not include:801
(i)  Postproduction expenditures for footage shot outside this state, marketing, story802
rights, or distribution;803
(ii)  Any expenditure for work or services not conducted or rendered in this state. 804
Expenditures for services not performed at the filming site shall only qualify if the805
vendor is a Georgia vendor.  Expenditures for services conducted or rendered both in806
and outside this state shall only qualify to the extent the service is conducted or807
rendered in Georgia;808
- 31 - 24 LC 50 0918S
(iii)  Expenditures for goods that were not purchased or rented or leased in this state809
from a Georgia vendor.  Expenditures for goods shall only qualify to the extent such810
goods are used in this state.  A vendor that acts as a conduit to enable purchases or811
rentals to qualify that would not otherwise qualify shall not be considered a Georgia812
vendor with respect to such purchases, rentals, or leases; or813
(iv)  Any transaction subject to taxation imposed by Chapter 8 or 13 of this title for814
which taxes have not been demonstrably paid; and815
(C) Such term includes payments to a loan-out company by a qualified interactive816
entertainment production company that has met its withholding tax obligations as817
provided in this paragraph. The qualified interactive entertainment production818
company shall withhold Georgia income tax at the rate imposed by subsection (a) of819
Code Section 48-7-21 on all payments to loan-out companies for services performed820
in Georgia.  Any amounts so withheld shall be deemed to have been withheld by the821
loan-out company on wages paid to its employees for services performed in Georgia822
pursuant to Article 5 of this chapter notwithstanding the exclusion provided in823
subparagraph (K) of paragraph (10) of Code Section 48-7-100. The amounts so824
withheld shall be allocated to the loan-out company's employees based on the payments825
made to the loan-out company's employees for services performed in Georgia.  For826
purposes of this chapter, loan-out company nonresident employees performing services827
in Georgia shall be considered taxable nonresidents and the loan-out company shall be828
subject to income taxation in the taxable year in which the loan-out company's829
employees perform services in Georgia, notwithstanding any other provisions in this830
chapter.  Such withholding liability shall be subject to penalties and interest in the same831
manner as the employee withholding taxes imposed by Article 5 of this chapter, and the832
commissioner shall provide by regulation the manner in which such liability shall be833
assessed and collected.834
- 32 - 24 LC 50 0918S
(8)  'Qualified Georgia promotion' means a qualified promotion of this state approved by835
the Department of Economic Development consisting of a qualified interactive game836
which includes a 15 second long Georgia advertisement in units sold and embedded in837
online promotions.838
(9)  'Qualified interactive entertainment production company' means a company that:839
(A)  Maintains a business location physically located in this state;840
(B)  Has a total aggregate payroll of $250,000.00 or more for employees working841
within the state in the taxable year the qualified interactive entertainment production842
company claims the tax credits;843
(C)  Has gross income of less than $100 million for the taxable year; and844
(D) Is primarily engaged in qualified production activities related to interactive845
entertainment.846
Such term shall not mean or include any form of business owned, affiliated, or controlled,847
in whole or in part, by any company or person which is in default on any tax obligation848
of the state or a loan made by the state or a loan guaranteed by the state.849
(10) 'Qualified production activities' means the production of new digital projects850
produced in this state and approved by the Department of Economic Development as851
state certified productions, including only the following: interactive entertainment or852
prereleased interactive games.  Such term shall include projects created in this state, in853
whole or in part, animation, and music fixed on a delivery system which includes without854
limitation computer disc, laser disc, and any element of the digital domain and which is855
intended for multimarket commercial distribution via digital platforms designed for the856
distribution of interactive games.  Such term shall not include any project that is not857
intended for multimarket commercial distribution or any project not originally created in858
this state.859
(11)  'Resident' means an individual as designated pursuant to paragraph (10) of Code860
Section 48-7-1.861
- 33 - 24 LC 50 0918S
(12)  'State certified production' means a production engaged in qualified production862
activities which have been approved by the Department of Economic Development in863
accordance with regulations promulgated pursuant to this Code section.  In the instance864
of a work for hire in which one qualified interactive entertainment production company865
hires another qualified interactive entertainment production company to produce a project866
or contribute elements of a project for pay, the hired company shall be considered a867
service provider for the hiring company, and the hiring company shall be entitled to the868
tax credit under this Code section.869
(13)  'Total aggregate payroll' means the total sum expended by a qualified interactive870
entertainment production company on salaries paid to employees working within this871
state in a state certified production or productions.  For purposes of this paragraph:872
(A)  With respect to a single employee, the portion of any salary which exceeds873
$500,000.00 for a single production shall not be included when calculating total874
aggregate payroll; and875
(B)  All payments to a single employee and any legal entity in which the employee has876
any direct or indirect ownership interest shall be considered as having been paid to the877
employee and shall be aggregated regardless of the means of payment or distribution.878
(c)  For any qualified interactive entertainment production company and its affiliates that879
invest in a state certified production and whose average annual total production880
expenditures in this state did not exceed $30 million for 2002, 2003, and 2004, there shall881
be allowed an income tax credit against the tax imposed under this article.  The tax credit882
under this subsection shall be allowed if the base investment in this state equals or exceeds883
$250,000.00, and shall be calculated as follows:884
(1)  The qualified interactive entertainment production company shall be allowed a tax885
credit equal to 20 percent of the base investment in this state; and886
(2)(A)  The qualified interactive entertainment production company shall be allowed887
an additional tax credit equal to 10 percent of such base investment if the qualified888
- 34 - 24 LC 50 0918S
production activity includes a qualified Georgia promotion.  Such additional tax credit889
shall be allowed for any qualified production that includes a qualified Georgia890
promotion upon its release to the general public.  In lieu of the inclusion of the Georgia891
promotional logo, the qualified interactive entertainment production company may892
offer alternative marketing opportunities to be evaluated by the Department of893
Economic Development to ensure that they offer equal or greater promotional value to894
the State of Georgia.  The Department of Economic Development shall electronically895
certify to the Department of Revenue when the requirements of this paragraph and896
paragraph (2) of subsection (d) of this Code section have been met.897
(B)  The Department of Economic Development shall prepare an annual report detailing898
the marketing opportunities it has approved under the provisions of subparagraph (A)899
of this paragraph.  The report shall include, but not be limited to:900
(i)  The goals and strategy behind each marketing opportunity approved pursuant to901
the provisions of subparagraph (A) of this paragraph;902
(ii) The names of all qualified interactive entertainment production companies903
approved by the Department of Economic Development to provide alternative904
marketing opportunities;905
(iii) The estimated value to the state of each approved alternative marketing906
opportunity compared to the estimated value of the Georgia promotional logo; and907
(iv)  The names of all qualified interactive entertainment production companies that908
chose to include the Georgia promotional logo in its final production instead of909
offering the state an alternative marketing proposal.910
The report required under this subparagraph shall be completed no later than January 1911
of each year and presented to each member of the House Committee on Ways and912
Means, the Senate Finance Committee, the Senate Economic Development and913
Tourism Committee, the House Committee on Economic Development and Tourism,914
and the Governor.915
- 35 - 24 LC 50 0918S
(d)  For any qualified interactive entertainment production company and its affiliates that916
invest in a state certified production and whose average annual total production917
expenditures in this state exceeded $30 million for 2002, 2003, and 2004, there shall be918
allowed an income tax credit against the tax imposed under this article.  For purposes of919
this subsection, the excess base investment in this state is computed by taking the current920
year production expenditures in a state certified production and subtracting the average of921
the annual total production expenditures for 2002, 2003, and 2004.  The tax credit shall be922
calculated as follows:923
(1)  If the excess base investment in this state equals or exceeds $250,000.00, the924
qualified interactive entertainment production company and its affiliates shall be allowed925
a tax credit of 20 percent of such excess base investment; and926
(2)(A)  The qualified interactive entertainment production company and its affiliates927
shall be allowed an additional tax credit equal to 10 percent of the excess base928
investment if the qualified production activities include a qualified Georgia promotion. 929
Such additional tax credit shall be allowed for any qualified production that includes930
a qualified Georgia promotion upon its release to the general public.  In lieu of the931
inclusion of the Georgia promotional logo, the qualified interactive entertainment932
production company may offer marketing opportunities to be evaluated by the933
Department of Economic Development to ensure that they offer equal or greater934
promotional value to the State of Georgia.935
(B)  The Department of Economic Development shall prepare an annual report detailing936
the marketing opportunities it has approved under the provisions of subparagraph (A)937
of this paragraph.  The report shall include, but not be limited to:938
(i)  The goals and strategy behind each marketing opportunity approved pursuant to939
the provisions of subparagraph (A) of this paragraph;940
- 36 - 24 LC 50 0918S
(ii) The names of all qualified interactive entertainment production companies941
approved by the Department of Economic Development to provide alternative942
marketing opportunities;943
(iii) The estimated value to the state of each approved alternative marketing944
opportunity compared to the estimated value of the Georgia promotional logo; and945
(iv)  The names of all qualified interactive entertainment production companies that946
chose to include the Georgia promotional logo in its final production instead of947
offering the state an alternative marketing proposal.948
The report required under this subparagraph shall be completed no later than January949
1 of each year and presented to each member of the House Committee on Ways and950
Means, the Senate Finance Committee, the Senate Economic Development and951
Tourism Committee, the House Committee on Economic Development and Tourism,952
and the Governor.953
(e)(1)  In no event shall the aggregate amount of tax credits allowed under this Code954
section for qualified interactive entertainment production companies and affiliates exceed955
$12.5 million for each taxable year.956
(2)  Qualified interactive entertainment production companies are eligible for tax credits957
for prereleased interactive game production; provided, however, that such credits shall958
not be available for a period which exceeds three years.959
(3)  The maximum allowable credit claimed for any qualified interactive entertainment960
production company and its affiliates shall not exceed $1.5 million in any single year.961
(4)  Qualified interactive entertainment production companies seeking to claim a tax962
credit under the provisions of this Code section shall submit an application to the963
commissioner for preapproval of such tax credit.  The commissioner shall preapprove the964
tax credits based on the order in which properly completed applications were submitted. 965
In the event that two or more applications were submitted on the same day and the966
- 37 - 24 LC 50 0918S
amount of funds available will not be sufficient to fully fund the tax credits requested, the967
commissioner shall prorate the available funds between or among the applicants.968
(5)  No qualified interactive entertainment production company shall be allowed to claim969
an amount of tax credits under this Code section for any single year in excess of its total970
aggregate payroll expended to employees working within this state for the calendar year971
that the qualified interactive entertainment production company claims the tax credits. 972
Any amount in excess of such limit shall not be eligible for carry forward to the973
succeeding years' tax liability, nor shall such excess amount be eligible for use against974
the qualified interactive entertainment production company's quarterly or monthly975
payment under Code Section 48-7-103, nor shall such excess amount be assigned, sold,976
or transferred to any other taxpayer.977
(6)  Before the Department of Economic Development issues its approval to the qualified978
interactive entertainment production company for the qualified production activities, the979
qualified interactive entertainment production company shall certify to the department980
that:981
(A)  The qualified interactive entertainment production company maintains a business982
location physically located in this state; and983
(B)  The qualified interactive entertainment production company had expended a total984
aggregate payroll of $250,000.00 or more for employees working within this state985
during the taxable year of the qualified interactive entertainment production company.986
The department shall issue a certification that the qualified interactive entertainment987
production company meets the requirements of this paragraph.  The qualified interactive988
entertainment production company shall provide such certification to the Department of989
Economic Development.  The Department of Economic Development shall not issue its990
approval until it receives such certification.991
(7)(A)  The qualified interactive entertainment production company shall report to the992
Department of Revenue on its Georgia income tax return the monthly average number993
- 38 - 24 LC 50 0918S
of full-time employees subject to Georgia income tax withholding for the taxable year994
as provided in subparagraph (B) of this paragraph.  As used in this paragraph, the term995
'full-time employee' means a person who performs a job that requires a minimum of 35996
hours per week and receives compensation at or above the average wage earned in the997
county with the lowest average wage earned in this state as reported in the most998
recently available annual issue of the Georgia Employment and Wages Averages999
Report of the Department of Labor.1000
(B)  The qualified interactive entertainment production company shall report such1001
number for each respective taxable year.1002
(C)  Notwithstanding Code Sections 48-2-15, 48-7-60, and 48-7-61, for such taxable1003
years, the commissioner shall report yearly to the House Committee on Ways and1004
Means and the Senate Finance Committee.  Such report shall include the name, tax year1005
beginning, and monthly average number of full-time employees for each qualified1006
interactive entertainment production company and shall be submitted by June 30 of1007
each year.1008
(f)(1)  If the amount of  tax credits allowed under this Code section exceeds the qualified1009
interactive entertainment production company's liability for taxes owed under this article1010
in a taxable year, the excess may be taken as a credit against such qualified interactive1011
entertainment production company's quarterly or monthly payment under Code Section1012
48-7-103. Each employee whose employer receives credit against such qualified1013
interactive entertainment production company's quarterly or monthly payment under1014
Code Section 48-7-103 shall receive credit against his or her income tax liability under1015
Code Section 48-7-20 for the corresponding taxable year for the full amount which would1016
be credited against such liability prior to the application of the credit provided for in this1017
subsection.  Credits against quarterly or monthly payments under Code Section 48-7-1031018
and credits against liability under Code Section 48-7-20 established by this subsection1019
shall not constitute income to the qualified interactive entertainment production company.1020
- 39 - 24 LC 50 0918S
(2)  If a qualified interactive entertainment production company and its affiliates claim1021
the credit authorized under Code Section 48-7-40, 48-7-40.1, 48-7-40.17, or 48-7-40.18,1022
then the qualified interactive entertainment production company and its affiliates shall1023
only be allowed to claim the credit authorized under this Code section to the extent that1024
the Georgia resident employees included in the credit calculation authorized under this1025
Code section and taken by the qualified interactive entertainment production company1026
and its affiliates on such tax return under this Code section have been permanently1027
excluded from the credit authorized under Code Section 48-7-40, 48-7-40.1, 48-7-40.17,1028
or 48-7-40.18.1029
(g)  Any tax credits with respect to a state certified production earned by a qualified1030
interactive entertainment production company and previously claimed but not used by such1031
qualified interactive entertainment production company against its income tax may be1032
transferred or sold in whole or in part by such qualified interactive entertainment1033
production company to another Georgia taxpayer, subject to the following conditions:1034
(1)  Such qualified interactive entertainment production company may make only a single1035
transfer or sale of tax credits earned in a taxable year; provided, however, that the transfer1036
or sale may involve one or more transferees;1037
(2)  Such qualified interactive entertainment production company shall submit to the1038
Department of Economic Development and to the Department of Revenue a written1039
notification of any transfer or sale of tax credits within 30 days after the transfer or sale1040
of such tax credits.  The notification shall include such qualified interactive entertainment1041
production company's tax credit balance prior to transfer, the credit certificate number,1042
the remaining balance after transfer, all tax identification numbers for each transferee, the1043
date of transfer, the amount transferred, and any other information required by the1044
Department of Economic Development or the Department of Revenue;1045
- 40 - 24 LC 50 0918S
(3)  Failure to comply with this subsection shall result in the disallowance of the tax1046
credit until the qualified interactive entertainment production company is in full1047
compliance;1048
(4)  The transfer or sale of this tax credit does not extend the time in which such tax credit1049
can be used.  The carry-forward period for a tax credit that is transferred or sold shall1050
begin on the date on which the tax credit was originally earned;1051
(5)  A transferee shall have only such rights to claim and use the tax credit that were1052
available to such qualified interactive entertainment production company at the time of1053
the transfer, except for the use of the credit in paragraph (1) of subsection (f) of this Code1054
section.  To the extent that such qualified interactive entertainment production company1055
did not have rights to claim or use the tax credit at the time of the transfer, the1056
Department of Revenue shall recapture the tax credit from the transferor.  The transferee's1057
recourse is against such qualified interactive entertainment production company; and1058
(6)  The transferee shall acquire the tax credits in this Code section for a minimum of 601059
percent of the amount of the tax credits so transferred.1060
(h)  The credit granted under this Code section shall be subject to the following conditions1061
and limitations:1062
(1)  The credit may be taken beginning with the taxable year in which the qualified1063
interactive entertainment production company has met the investment requirement.  For1064
each year in which such qualified interactive entertainment production company either1065
claims or transfers the credit, the qualified interactive entertainment production company1066
shall attach a schedule to the qualified interactive entertainment production company's1067
Georgia income tax return which shall set forth the following information, as a minimum:1068
(A)  A description of the qualified production activities, along with the certification1069
from the Department of Economic Development;1070
(B)  A detailed listing of the employee names, social security numbers, and Georgia1071
wages when salaries are included in the base investment;1072
- 41 - 24 LC 50 0918S
(C)  The amount of tax credit claimed for the taxable year;1073
(D) Any tax credit previously taken by the qualified interactive entertainment1074
production company against Georgia income tax liabilities or the qualified interactive1075
entertainment production company's quarterly or monthly payments under Code Section1076
48-7-103;1077
(E)  The amount of tax credit carried forward from prior years;1078
(F) The amount of tax credit utilized by the qualified interactive entertainment1079
production company in the current taxable year; and1080
(G)  The amount of tax credit to be carried forward to subsequent tax years;1081
(2)  In the initial year in which a qualified interactive entertainment production company1082
claims the credit granted in this Code section, the qualified interactive entertainment1083
production company shall include in the description of the qualified production activities1084
required by subparagraph (A) of paragraph (1) of this subsection information which1085
demonstrates that the activities included in the base investment or excess base investment1086
equal or exceed $250,000.00; and1087
(3)  In no event shall the amount of the tax credit under this Code section for a taxable1088
year exceed the qualified interactive entertainment production company's income tax1089
liability.  Any unused credit amount shall be allowed to be carried forward for five years1090
from the close of the taxable year in which the investment occurred.  No such credit shall1091
be allowed the qualified interactive entertainment production company against prior1092
years' tax liability.1093
(i)(1)  The Department of Economic Development shall:1094
(A)  Certify each production that qualifies for the tax credits authorized under this Code1095
section;1096
(B)  Submit such certifications to the commissioner; and1097
(C)  Promulgate rules and regulations as are necessary to implement this subsection.1098
- 42 - 24 LC 50 0918S
(2)  The Department of Economic Development may charge reasonable fees associated1099
with the certification process established pursuant to this paragraph.1100
(j)  The commissioner shall promulgate such rules and regulations as are necessary to1101
implement and administer this Code section.1102
(k)  No qualified interactive entertainment production company shall be allowed a credit1103
under this Code section and Code Section 48-7-40.26 in the same year."1104
SECTION 5.1105
(a)  This Act shall become effective on January 1, 2026, and shall be applicable to taxable1106
years beginning on or after such date.1107
(b)  Section 3 of this Act shall apply to projects certified by the Department of Economic1108
Development on or after January 1, 2026.1109
SECTION 6.1110
All laws and parts of laws in conflict with this Act are repealed.1111
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