Income/Franchise:
Georgia: New Law Provides for Elective Passthrough Entity-Level Taxation
H.B. 149, signed by gov. 5/4/21. Available for tax years beginning on or after January 1, 2022, new law provides an annual irrevocable election for S corporations and partnerships to pay tax at the entity-level, which must be made on or before the due date for filing the applicable income tax return, including extensions. Electing entities (PTEs) must pay income tax at a 5.75% rate on their Georgia-source net income (i.e., under the corporate allocation and/or apportionment rules of O.C.G.A. § 48-7-31). Under the new law, electing PTEs and their respective shareholders and partners must forego some otherwise applicable state tax deductions and credits. For instance, in computing their net income, electing PTEs will “not be allowed any deduction for taxes that are based on or measured by gross or net income or any variant thereof.”
See forthcoming Multistate Tax Alert for more details on these law changes, and please contact us with any questions in the meantime.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.
