Georgia can conduct an independent analysis of its tax credits under a bill signed into law Tuesday by Gov. Brian Kemp.
Senate Bill 6, dubbed the Tax Credit Return on Investment Act of 2021, allows the chairs of the House Ways and Means Committee and the Senate Finance Committee to each request up to five economic analyses each year of existing or proposed Georgia laws that deal with tax exemptions, credits, deferrals, rebates, abatements or preferential rates.
SB 6 also extends sales tax exemptions for economic development projects in specific manufacturing industries. It exempts sales tax on tickets for fine arts performances from nonprofits and museums.
“Despite an unprecedented global pandemic, Georgia continues to create jobs, spur investment, and create economic development in every corner of our state,” Kemp said Tuesday during a bill signing ceremony at the Cobb Chamber of Commerce. “Senate Bill 6 is the logical next step in our efforts to support businesses producing life-saving medical devices and supplies here in the Peach State.”
The new law, which takes effect on July 1, adds job tax credits for pharmaceutical companies and tax breaks for high-impact aerospace defense projects.
Representatives for Georgia Bio, a life sciences advocacy and business leadership organization, said the law would create jobs and strengthen the industry.
“The COVID-19 pandemic drew national attention to drug shortages in the U.S., which have become more frequent over the past decade due to an overreliance on pharmaceutical ingredients from overseas,” Georgia Bio President and CEO Maria Thacker-Goethe said in a statement.
Critics of Georgia’s tax credits say the incentive programs need to be reevaluated to eliminate waste and ensure tax equity. Some argue they allow the government to pick winners and losers.
Kemp also signed House Bill 451 into law Tuesday. The measure allows manufacturers to extend any freeport exemption they claimed in 2020 through the remainder of 2021. The exemption allows cities and counties to choose, with the approval of their voters, to exempt manufacturers from taxes on certain inventory or stock-in-trade for one year.
“This laser-focus on jobs, economic development, and conservative budgeting has resulted in Georgia’s unemployment rate falling for 11 straight months and remaining below the national average,” Kemp said.