Georgia Passes Bill to Conform with Federal Income Tax Changes

Recent Georgia legislation updates Georgia’s tax code to match the federal tax code, including the new Section 179 deduction limit and filing due dates.

By Denisse Beldin, SALT associate

On Feb. 23, 2016, Georgia Governor Nathan Deal signed House Bill 742 (the “Bill”), Georgia’s annual Internal Revenue Code (“IRC”) conformity legislation. The legislation updates Georgia’s income tax code to conform to the changes in the federal tax law that were enacted on or before Jan. 1, 2016, and is effective for tax years beginning on or after Jan. 1, 2015.

There are a couple of points worth noting with regard to Georgia’s conformity with the IRC: (1) any changes to the IRC enacted by Congress after Jan. 1, 2016, will not be adopted by Georgia (absent additional legislation), even if the federal changes are effective retroactively for the 2015 tax year, and (2) any changes to the IRC enacted by Congress before Jan. 1, 2016, that are not yet effective shall become effective for Georgia tax purposes on the same date they become effective for federal tax purposes.

Of particular note, Georgia now conforms to the federal §179 deduction limit of $500,000 and the related phase-out of $2,000,000, which were made permanent by federal legislation in December of last year. There are many provisions to which Georgia still does not conform, including certain depreciation and bonus depreciation provisions as well as the §179 deduction for certain qualified real property under §179(f). [1]

The Bill also changed the due dates for filing corporate and partnership returns. In conformity with the changes to federal law, calendar-year Georgia corporate returns must now be filed on or before April 15 (previously March 15). Fiscal-year Georgia corporate returns must now be filed on or before the 15th day of the fourth month following the close of the fiscal year. Calendar-year Georgia S-corporation and partnership returns must be filed on or before March 15 (previously April 15). Fiscal-year Georgia S-corporation and partnership returns must now be filed on or before the 15th day of the third month following the close of the fiscal year. The due date for tax payments, if any, follows the aforementioned deadlines.

Finally, the Bill changed the due date for employers to file their annual withholding tax returns. For calendar years beginning after Dec. 18, 2015, the due date is now Jan. 31 following the close of the year (previously it was Feb. 28). This also applies to Form 1099s where Georgia withholding occurred and which are required to be filed to report nonemployee compensation.

The SALT team at Aprio strives to make taxpayers aware of legislative changes that may have a significant impact on their business operations and/or compliance processes. Understanding how these rules may impact your tax liability will allow you and your company to budget and plan accordingly. We will continue to monitor state tax legislation around the country, and we will report on significant developments in future issues of the Aprio SALT Newsletter.

Contact Denisse Beldin, SALT associate, at denisse.beldin@aprio.com or Jeff Glickman, partner-in-charge of Aprio’s SALT practice, at jeff.glickman@aprio.com for more information.

This article was featured in the March 2016 SALT Newsletter. To view the newsletter, click here.

[1] For a listing published by the Georgia Department of Revenue of IRC sections that are not adopted by Georgia, see Georgia Department of Revenue “Income Tax Federal Changes.

Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding this matter.

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