Georgia Extends Exemption for Competitive Projects of Regional Significance

Georgia has enacted legislation that extends the sunset date from June 30, 2019 to June 30, 2021 for the state’s sales and use tax exemption for the construction of a “competitive project of regional significance.” The exemption originally took effect on January 1, 2012. The exemption applies to sales of tangible personal property:

  • Used exclusively for and in the construction of a competitive project of regional significance.
  • Purchased prior to completion of the construction of the competitive project of regional significance.

Property used exclusively for and in the construction of a competitive project of regional significance includes only tangible personal property that:

  • Remains tangible personal property at a project’s location after the completion of construction;
  • Is incorporated into the real property structures at a project’s location; or
  • Is used by contractors for the sole purpose of constructing a Project’s real property structures.

The exemption applies to purchases made during the entire time of construction of the project so long as such project meets the definition of a “competitive project of regional significance” within the effective dates of exemption. Per the legislation, “competitive project of regional significance” is defined as the location or expansion of some or all of a business enterprise’s operations in Georgia where the commissioner of economic development determines that the project would have a significant regional impact.

Following notification from the commissioner of economic development that a project has been certified as a competitive project of regional significance, the Georgia Department of Revenue may issue a letter of authorization. The letter of authorization can be provided to contractors to make exempt purchases.  Annually by January 31, the Project must provide a list of all contractors authorized to use the exemption to the Department of Revenue. Sellers are required to collect sales tax unless they take in good faith a letter of authorization. (H.B. 352, Laws 2019)

Posted on August 19, 2019