SALT Report 2436 – Georgia Governor Nathan Deal has signed legislation that amends procedures under the Georgia Tourism Development Act, an act that provides sales tax incentives for approved companies. The bill allows sales tax exemptions for certain approved projects in order to stimulate the creation of tourism attractions or the expansion of existing attractions. The provisions of House Bill 318 follow.
Georgia Tourism Development Act
The Tourism Act will allow approved companies that build new attractions, or expand an existing attraction, to keep a portion of their sales tax revenues for 10 years. Under the amended law, each project is required to meet the follow criteria:
- Must cost a minimum of $1 million
- Must attract at least 25% of its visitors from out of state by its third year, and
- Must not directly compete with existing Georgia businesses
The definition of an “approved company” has been amended to mean an entity that has submitted an application to undertake a tourism attraction project. The project must have the approval of the Commissioner of Economic Development and the Commissioner of Community Affairs. Only one company will be approved for each tourism attraction project.
All project applications must be filed with the Department of Community Affairs and must include an endorsement from the governing authority of the county or city, in which the tourism attraction will be located. When applicable, the applications should also include any clauses regarding permitting, land use, local incentives, and the provision of local public infrastructure.
Additionally, the Bill now provides that the state will not reimburse application fees. Therefore, approved companies must pay all costs associated with the application; this includes the cost of the analysis of the proposed project that will be conducted by an independent consultant.
The 10-year term tourism agreements will begin on the date the tourism attraction opens for business and starts collecting sales and use taxes. Or, if the agreement is for an expansion, it will begin on the date that the construction is completed.
All approved agreement will be subject to a compliance review by the DCA. If an approved company breaches the terms of its agreement, the agreement will be void and any sales and use taxes that were refunded will be immediately due and payable back to the state.
Approved companies that comply with the terms of their agreement will be granted a sales and use tax refund for all approved new projects; or an incremental sales and use tax refund for an approved expansion of an existing tourism attraction. However, the legislation now states that refunds will be made without interest.
During the term of the agreement, all approved companies must file a claim for refund with the Department for a sales and use tax refund or an incremental sales and use tax refund by March 31 of the following year.
Finally, no sales and use tax refunds will be provided to an approved company that is, during the same tax year, receiving any other state tax incentive associated with another tourism attraction project.
The provisions in this Bill were effective April 29, 2013.
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