Taxes / Incentives:

Business in Newton County, as well as the entire state of Georgia, are subject to a number of state and local taxes.  The table below summarizes tax liabilities and is followed by more detailed descriptions of each tax.

Tax	Type of Tax	Rate	Who Collects	Exemptions or Credits Available
Corporate Net Income	Income	6 percent	Georgia Department of Revenue	Yes, through state incentive programs
Real and Personal Property Tax	Property	Local millage rate appliced to assessed value (40% of fair market value)	Local Governments	Yes, through state incentive programs and local tax exemptions
Sales and Use Tax	Sales and Use	4% statewide, with an additional 3 percent for county, city and SPLOST	Georgia Dept. of Revenue and local governments	Yes, through state incentive programs and statutory tax exemptions
Corporate Networth (Franchise Tax)	License	Graduated maximum tax $5,000	Georgia Dept. of Revenue	None
Workers' Compensation	Insurance	Georgia has some of the lowest rates in the nation	Businesses may self-insure or purchase a policy through private insurance companies.	7.5% credit for companies with Certified Drug Free Workforce
Peronal Income Tax	Income	Graduated from 1% to 6%	Georgia Dept. of Revenue	Federal income tax credits where applicable
Unemployment Insurance	Insurance	Initially 2.7% on each employee's first $8,500 in earnings	Georgia Dept. of Labor	None.  Rate is evaluated after 26 months
Payroll taxes	State income tax withholding.  Additional federal taxes include income tax withholding, social security and Medicare.	Georgia's rate for withholding is graduated between 0 and 6 %	Georgia Dept. of Revenue and the U.S. Internal Revenue Service	Exemptions are available for state withholding, depending on company's ability to qualify for state incentives.

Corporate Net Income Tax 
Georgia's moderate corporate income tax rate (6 percent) has not changed since 1969.  This tax applies only to the portion of income that is earned in Georgia.  Earnings in Georgia have in the past been calculated using weightings of gross receipts, property and payroll. 

Beginning in 2006, tax liability calcualtions became more heavily wieghted on gross receipts in Georgia.  The other component weightings that currently have bearing on tax liability, property and payroll, will decrease each year and by 2008 will be eliminated from the calculation.  A schedule of tax liability weighting is shown below. 

	2005	2006	2007	2008
Gross receipts	50%	80%	90%	100%
Property	25%	10%	5%	0%
Payroll	25%	10%	5%	0%

Real and Personal Property
Taxes on real and tangible personal property are levied by the city, county, school district and state. All rates are set at the local level, except the state portion, which is fixed by Georgia law at 10 cents for each $1,000 of fair market value. 

These taxes are stated in terms of millage rates, the dollars of taxes to be paid for each $1,000 of the real property's assessed value.  The assessed value rate, in most cases, is 40 percent of the property's fair market value. 

Unemployment Insurance
Every industry in Georgia pays an unemployment insurance tax as required by federal law. Currently, Georgia's tax rate for employers newly operating in the state is 2.7% of each employee's first $8,500 of earnings. After an employment record is established in Georgia (36 months), a new rate is developed based on the business' history of employee separations.

Workers' Compensation
Georgia law requires employers, with 3 or more regular employees,  to insure their workers against job-related accidents. This insurance is carried with private companies unless the employer prefers to be self-insured.

Insurance that is handled through private companies with the premium based on the expereince of industry in which the company is operating.

Self-insured employers must provide proof of financial ability to the State Workers' Compensation Board. The Board may require posting of a bond.

Qualified businesses with a Certified Drug Free Work F orce Program are entitled to a 7.5% credit on premiums.  Businesses using a certified Workers Comp Managed Care Organization (WC/MCO) may be eligible for a premium discount.  The eligibility and the amount of discount vary by individual insurance companies.  

Sales Tax
Georgia companies pay a 4% state sales tax at the time of purchase. This applies to purchases (other than real estate) delivered or stored in Georgia to be used or consumed in the business (not for resale). This includes natural gas, oil, gasoline, telephone, artificial gas, steam, electricity and rentals.

In order to reduce property taxes, all Georgia counties have adopted an additional local 1% sales tax.  Some local jurisdictions levy an additional special purpose sales tax of up to 3%.   

Newton County's sales tax rate is 7%.

Personal Income Tax
Individual personal income tax rates are graduated from 1% (net income not over $750) to 6% (net income over $7,000) for residents in Georgia.  Income and deductions generally follow federal regulations.

Corporate Net-Worth (Franchise Tax)
The annual tax based on net worth (capital stock plus retained earnings) is called a license or occupation tax in Georgia.  Most states refer to the tax on net worth either as a franchise or a privilege tax.

Domestic operations are taxed on 100% of net worth.  Foreign (out of state) corporations are taxed on net worth apportioned to Georgia, determined by the following formula:  

Payroll or Employment Taxes 
Payroll taxes are levied at the federal and state levels.  If a company has employees, it is responsible for several taxes that must be withheld from an employee's paycheck.  Tax include: 

• Federal income tax withholding 
• State income tax withholding 
• Social Security and Medicare taxes

 
For a more complete listing and description on Payroll or Employment taxes at the federal level, visit http://www.irs.gov . 

For a more complete listing and description on Payroll or Employment taxes at the state level, visit http:/www2.state.ga.us.